Icahn Enterprises L.P. (IEP) continues to slide as US Attorney's office seeks information
Icahn Enterprises L.P. (NASDAQ: IEP) shares dropped more than 15% Wednesday after it disclosed that it had been contacted by the US Attorney's office for the Southern District of New York.
The US Attorney contacted IEP, founded and run by activist investor Carl Icahn, seeking information regarding the firm and some of its affiliates' corporate governance, capitalization, securities offerings, dividends, valuation, marketing materials, due diligence and other materials.
Last week, Hindenburg Research released a short report on IEP accusing Icahn of using money taken in from new investors to pay out dividends to old investors. The report sent IEP shares as low as $28.29.
"Such ponzi-like economic structures are sustainable only to the extent that new money is willing to risk being the last one 'holding the bag,'" Hindenburg said in the report.
IEP said in its statement Wednesday that it is "cooperating with the request and are providing documents in response to the voluntary request for information."
"The US Attorney's office has not made any claims or allegations against us or Mr. Icahn with respect to the foregoing inquiry," they added. "We believe that we maintain a strong compliance program and, while no assurances can be made and we are still evaluating the matter, we do not currently believe this inquiry will have a material impact on our business, financial condition, results of operations or cash flows."
By Sam Boughedda