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Icahn Enterprises Cuts Dividend In Half, Stock Falls 30%

Baystreet.ca
·1 min read

The stock of Icahn Enterprises (IEP) is down 30% after the holding company of investor Carl Icahn announced that it is cutting its quarterly dividend payment in half to $1 U.S. per share.

The dividend cut comes after a critical report on Icahn Enterprises released in May of this year by notorious short seller Hindenburg Research.

Hindenburg accused Carl Icahn of operating a de facto Ponzi Scheme, using new investor money to pay a dividend set at what it called unsustainable levels.

The previous dividend payment of $2 a share each quarter gave Icahn Enterprises a dividend yield of more than 25%, the highest among stocks listed on the benchmark S&P 500 index.

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The high dividend yield had attracted individual retail investors to Icahn Enterprises stock. However, Hindenburg Research claimed the dividend was built on a house of cards.

Until now, Carl Icahn had steadfastly refused to lower the dividend payment to shareholders and accused Hindenburg Research of spreading falsehoods about his company.

Read:

The dividend cut comes as Icahn Enterprises reported second-quarter earnings that were worse than expected.

The company announced an earnings per share (EPS) loss of $0.72 U.S., which was much worse than the Wall Street forecast of a $0.25 U.S. profit.

Revenue for the quarter ended June 30 came in at $2.68 billion U.S., which was above consensus estimates of $2.66 billion U.S.

Icahn Enterprises is a holding company that has investments in industries ranging from energy and automotive to real estate and home fashion.

Prior to today’s plunge, Icahn Enterprises stock had fallen 37% on the year to trade at $32.68 U.S. per share.