Why Icahn Enterprises (IEP) Shares Are Falling Sharply

Icahn Enterprises LP Common Stock IEP shares are trading lower by 10.75% to $45.00 Tuesday morning after Hindenburg Research said it has taken a short position in units of the company.

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What Else?

Among several issues raised by Hindenburg in the report, the investment research firm highlights how Icahn Enterprises’ "current dividend yield is ~15.8%, making it the highest dividend yield of any U.S. large cap company by far, with the next closest at ~9.9%." Hindenburg is concerned this dividend yield may be unsustainable.

Additionally, Hindenburg says the research firm's research has found that IEP units are inflated by 75%+ due to three key reasons:

• IEP trades at a 218% premium to its last reported net asset value (NAV), vastly higher than all comparables.
• Hindenburg says it has uncovered clear evidence of inflated valuation marks for IEP’s less liquid and private assets.
• The company has suffered additional performance losses year to date following its last disclosure.

Traders and investors interested in reading the full research report can do so here.

According to data from Benzinga Pro, IEP has a 52-week high of $55.55 and a 52-week low of $47.17.