Chief executives of public companies have long been Carl C. Afraid of the icon. The 88-year-old investor made his name and billions by questioning the decisions and strategies of corporate leaders and agitating for change at companies such as Apple, RJR Nabisco and Netflix.
But now Mr. Icahn is under intense scrutiny from Wall Street investors, who are rapidly selling his company’s stock. Over the past year and a half, shares of Icahn Enterprises, his publicly traded investment company, have fallen more than 75 percent, losing nearly $20 billion in value. After falling more than 30 percent since mid-August alone, it now trades at about $11 a share, its lowest level in more than two decades.
Mr. Icahn Owning roughly 86 percent of the stock, he has personally lost billions of dollars as well.
“There’s been a confidence game and it’s lost investor confidence,” said Don Billson, who focuses on activist investing as head of event-based research at Gordon Haskett Research Advisors.
Some Wall Street investors are now worried that a continued decline in the stock could threaten the health of the company as a whole and force it to sell off companies it owns. Icahn Enterprises holds a mix of public stock, real estate and other investments, according to interviews with Mr. Bilson and several other market observers.
Investors are questioning whether Mr. Icahn himself is selling his stock. He has taken a personal loan using his stock as collateral. Banks that offer these loans usually have strict requirements regarding the value of the company. A sharp decline in share prices may force the lender to sell shares.
In an interview this week, Mr. Icahn said he was “absolutely not selling.” He also said there were no so-called margin calls on personal loans backed by his stock. Margin calls occur when a lender forces a borrower to sell stock to settle a loan. “I don’t foresee margin calls,” he said.
Mr. Icahn shares in the company started messing up In May 2023 when Hindenburg Research, a short-selling firm run by Nate Anderson, published a Report Question Financials of Icahn Enterprises. Among other things, Hindenburg accused Icahn Enterprises of having a “Ponzi-like financial structure” and paying dividends it could not afford. (It has since cut its dividend.) He also questioned Mr. Icahn’s use of stock-backed personal loans.
Mr. Anderson said in an interview this week that he expects Icahn Enterprises stock to fall further. He maintains a short position by betting against the stock. He said Mr. Icahn’s extensive use of personal loans still posed a threat to the company’s future. “He has a lot of debt and needs cash. He has really surrounded himself,” he said. “There is no safe exit.”
In April 2023, Icahn Enterprises stock traded between $50 and $55 per share.
But investors became increasingly skeptical of Mr. Icahn after the Hindenburg Report was released, as evidenced by the sharp selloff. The exit from the stock intensified after the company cut its dividend in August that year.
Last month, the Securities and Exchange Commission accused Mr. Icahn of personally pledging his stock as collateral for billions of dollars in margin loans. The settlement is called for Mr. Icahn Pay a $2 million fine.
Since then, the stock has fallen steadily. Some investors said they were concerned that Icahn might be forced to cut his quarterly dividend again.
Even with its precipitous drop in stock price, Icahn Enterprises still trades at a premium to its so-called net asset value, the value of public company shares, real estate and private company holdings, minus debt and liabilities. Many publicly traded investment firms trade at a discount to net asset value because of the assumption that certain shares will lose value if the manager is forced to sell.
At Icahn Enterprises, Mr. Icahn owns the largest stakes in some public companies, and some have underperformed. Shares of Texas-based oil refiner CVR Energy, for example, are down more than 30 percent in the past year, and Icahn Enterprises owns about 65 percent of the stock, one of Mr. Icahn’s largest holdings.
In an interview this week, Mr. Icahn said that Mr. Anderson’s statements about him and his firm were “what we consider to be competition and outright lies and grossly misleading.”
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