Carl Icahn Criticizes Short Sellers at Investor Conference

Carl Icahn criticized short sellers on Tuesday, months after his firm became the target of one.

(Bloomberg) — Carl Icahn criticized short sellers on Tuesday, months after his firm became the target of one. 

“I think there’s a place for short sellers without question but to go out and spread rumors that are basically untrue or close to untrue, there’s no place for that,” Icahn said at the 13D Monitor Active-Passive Investor Summit. “I think it is unconscionable, and I’m very much against that.”

In August, Icahn slashed his company’s quarterly payouts in half, acknowledging complaints raised by short-seller Hindenburg Research. In May, Nate Anderson’s firm leveled a series of accusations against Icahn Enterprises, claiming that it was over-leveraged and trading at an excessively steep premium to its net asset value. Hindenburg also said that IEP’s once-high dividends weren’t sustainable. 

IEP fell 1% to close at $17.77 in New York trading Tuesday, giving the firm a market value of about $7 billion. It’s lost about 65% of its value this year. 

The 13D Monitor conference is one of the biggest events of the year in activist investing, as a forum where top names in the sector talk their book and unveil new positions just ahead of proxy season. Starboard Value went public with a push at News Corp. on Tuesday while Engaged Capital unveiled its position in VF Corp. 

During his presentation, Icahn said IEP was suing the board of Illumina Inc. over its handling of its $7 billion acquisition of cancer-test provider Grail Inc. The European Commission on Thursday ordered Illumina to unwind the transaction. Icahn, who has a position in Illumina, has long been critical of the deal.

The complaint accusing the defendants of breaching their financial duty was filed under seal Tuesday, according to Delaware Chancery Court records.

“Throughout my long, long career as an activist, I have never found it necessary, until today, to sue a board of directors in this manner,” Icahn said. “The lawsuit has been filed under seal, so we are limited in what we can say. I continue to believe in the company’s long-term potential and I have full faith in Illumina’s new CEO, and its employees.”

David McAlpine, a spokesperson for Illumina, said the company is reviewing the complaint. Illumina has previously said Icahn failed to fully understand the value of the Grail deal and the regulatory issues involved in it.

Icahn is one of the most famous activist investors, having owned or sparred with a long-list of famous companies, including TWA, RJR Nabisco, Marvel, Texaco and Blockbuster. His firm’s current holdings include packaging firm Crown Holdings Inc., printer-maker Xerox Holdings Corp., according to an investor presentation in August. 


–With assistance from Michael Leonard.

(Updates with Icahn’s comments in eighth paragraph.)

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