On Tuesday, Hindenburg Research, a US short seller, announced that it has taken a short position against Carl Icahn’s Icahn Enterprises (IEP). Hindenburg’s research suggests that IEP units have been overvalued by more than 75%, and that IEP is trading at a 218% premium to its most recent net asset value. The report also highlights “clear evidence of inflated valuation marks for IEP’s less liquid and private assets”.
The conglomerate has not yet responded to the allegations. IEP shares have already fallen by 5.4% in premarket trading. Short sellers, such as Hindenburg Research, typically sell borrowed securities with the aim of buying them back at a lower price and making a profit.