Icahn Enterprises LP (NYSE:IEP), the investment company led by billionaire Carl Icahn, reported an unexpected loss for the quarter, resulting from market volatility that affected its investment returns.
The news caused a drop of nearly 12% in the company's shares before the market opened.
This comes after Icahn Enterprises faced criticism from short seller Hindenburg Research, which accused the firm of overvaluing its holdings and relying on a "Ponzi-like" structure to pay dividends. Hindenburg's allegations suggested that Icahn had been using funds from new investors to pay dividends to existing ones.
“Overall, we think Icahn, a legend of Wall Street, has made a classic mistake of taking on too much leverage in the face of sustained losses: a combination that rarely ends well,” Hindenburg Research wrote in a note published earlier in May.
Excluding one-time items, Icahn Enterprises reported a loss of $0.11 per share, falling short of analysts' average estimate of a $0.19 profit, as per Refinitiv data.
The the company's revenue for the quarter ending on March 31 came in at $2.6 billion, compared to $4.1 billion in the same period last year.
Florida-based Icahn Enterprises is a holding company that involves in a myriad of businesses including energy, automotive, food packaging, metals and real estate.
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