After Adani and Block, Hindenburg takes on billionaire Carl Icahn

After taking short positions on Adani Group and Jack Dorsey-owned Block, US short seller Hindenburg Research on Tuesday said its latest target in 2023 is Icahn Enterprises, a conglomerate in which activist investor Carl Icahn owns a majority stake.

In its research, Hindenburg showed that the valuation of IEP units was unfairly increased by over 75 per cent and that "IEP trades at a 218 per cent premium to its last reported net asset value (NAV), vastly higher than all comparables."

"We've uncovered clear evidence of inflated valuation marks for IEP's less liquid and private assets," it added.

Based in Sunny Isles Beach, Florida, Icahn Enterprises is one of the most successful activist investment firms and the chief investment vehicle of Icahn, who is known for his face-offs with several high-profile firms.

As of last close, shares were down marginally this year, giving Icahn Enterprises a valuation of roughly $18 billion.

This disclosure comes after Hindenburg Research's report last week revealed that former Block employees estimated 40 per cent to 75 per cent of accounts they reviewed were fake, involved in fraud or were additional accounts tied to a single individual.

Apart from taking a short position in Block, Hindenburg alleged in the report that the payments firm overstated its Cash App user numbers and understated its customer acquisition costs.

Hindenburg invests its own capital and takes short positions against companies. After finding potential wrongdoings, the company usually publishes a report explaining the case and bets against the target company, hoping to make a profit.

Short sellers typically sell borrowed securities and aim to buy these back at a lower price.

With inputs from Reuters

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