Icahn Enterprises Stock Is Spiraling Lower: What's Going On?

Icahn Enterprises LP IEP shares are trading lower Wednesday after the company disclosed it's under investigation by federal prosecutors. Icahn Enterprises also reported weak first-quarter earnings results and responded to a short report from last week.

What Happened: In a new regulatory filing, Icahn Enterprises said the U.S. Attorney’s office for the Southern District of New York contacted the company last week seeking information related to corporate governance, capitalization, securities offerings, dividends, valuation, marketing materials and due diligence.

"We are cooperating with the request and are providing documents in response to the voluntary request for information. The U.S. Attorney’s office has not made any claims or allegations against us or Mr. Icahn with respect to the foregoing inquiry," the company said in the filing.

The news comes after Icahn Enterprises shares fell close to 25% last week on the heels of a bearish report from short seller Hindenburg Research, accusing Carl Icahn of mismanagement. The report suggested that Icahn was running a Ponzi Scheme and indicated that shares were overvalued. 

Icahn responded to the short report Wednesday after IEP disclosed the investigation in a regulatory filing. 

"Hindenburg Research, founded by Nathan Anderson, would be more aptly named Blitzkrieg Research given its tactics of wantonly destroying property and harming innocent civilians. Mr. Anderson's modus operandi is to launch disinformation campaigns to distort companies' images, damage their reputations and bleed the hard-earned savings of individual investors," Icahn said in the response.

Icahn Enterprises said it intends to take appropriate steps to protect shareholders and fight back against the claims. 

See Also: Icahn Enterprises Fires Back At Hindenburg's Ponzi-Like Scheme Allegations: 'Intended Solely To Generate Profits'

Q1 Earnings: Icahn Enterprises reported first-quarter revenue of $2.6 billion Wednesday morning. The company turned in a quarterly loss of 75 cents per share, which was down significantly from earnings of $1.06 per share year-over-year. 

IEP Price Action: Icahn Enterprises shares were down 16.4% at $31.77 at the time of writing, according to Benzinga Pro.

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