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Oh, how the tables have turned. Short-seller Nathan Anderson’s Hindenburg Research put out its latest report targeting none other than Icahn Enterprises (IEP), the holding company owned by octogenarian corporate raider Carl Icahn. Hindenburg makes the case that IEP is an elaborate, overvalued company relative to its assets and its peers and features “Ponzi-like economic structures.” Icahn responded with a truism, labeling the report as self-serving and “intended solely to generate profits for Hindenburg’s short position.” Umm yes.
Indeed, short seller Dan David of Wolf Pack Research said about Icahn’s retort, “It was a weak, condescending and glib response. To simply say Hindenburg put out this report for self-serving reasons and to make money, Carl used to know that was a definition of investing when he was breaking up TWA for parts or short-squeezing Herbalife.”
As Reuters Breakingviews’ Lauren Silva Laughlin writes, “It’s not obvious the octogenarian’s typical bellicosity will keep it from going further down in flames.”
On Twitter, Icahn is facing a Greek Chorus of investors and executives who can hardly contain their schadenfreude. Bill Ackman, who has some infamous history with Icahn, relished the moment tweeting, “there is a karmic quality to this short report that reinforces the notion of a circle of life and death,” and called the report a must-read. Michael Dell, who has sparred with Icahn at least twice, called the Hindenburg report “pure gold.” IEP is down about 40% this week.
GPP headed west earlier this week and caught up with many clients and friends at the annual Milken Conference in Beverly Hills. Participants rubbed shoulders with titans of industry and members of Congress such as Sen. Joe Manchin to John Legend and Alex Rodriguez, aka A-Rod. Media was everywhere, including great interviews by Sonali Basak of Bloomberg, Brian Sozzi of Yahoo Finance and David Faber of CNBC.
We sat in on a number of great panels, including one on making capitalism more inclusive with Margaret Anadu, senior partner at impact firm Vistria Group, who noted that housing was a critical factor in making the model work for everyone. Citigroup CEO Jane Fraser and Apollo Global Management CEO Marc Rowan weighed in on the state of global capital markets, both echoing that the U.S. financial system is the envy of the world. Fraser emphasized her confidence in the banking system, telling Brian Sozzi that the First Republic situation was, “the last of the remaining uncertainty” amongst smaller banks but to expect “more consolidation.” Rowan similarly expects “a real shakeout as to what the business is of regional banking going forward.”
We also went to The M&A State of Play panel Tuesday morning hosted by Axios’s Dan Primack. He joked at the beginning of the panel looking out at the half empty room that “this is a sign of where the M&A market is.” Panelists included Mark McMaster, global head of M&A at Lazard, noted “market valuations are down but so are those of the potential targets. So, transactions can get done without leveraging up balance sheets.”
Have a great weekend,
GPP Team
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