NEW YORK–(BUSINESS WIRE)–KlaymanToskes reports that Icahn Enterprises (NASDAQ: IEP) share prices have fallen dramatically, following the company’s 40% drop and plunge to a 52-week low earlier this month. The crash came after Hindenburg Research published a report which alleged Icahn Enterprises, led by Carl Icahn, has “Ponzi-like economic structures.”
According to Hindenburg, “Icahn has been using money taken in from new investors to pay out dividends to old investors,” and “such Ponzi-like economic structures are sustainable only to the extent that new money is willing to risk being the last one ‘holding the bag.’”
Hindenburg noted that Icahn Enterprises’ 15.8% dividend yield is the largest of any U.S. large cap name, and argues that the high yield is not being achieved through legal means.
A regulatory filing made after the report revealed that the U.S. Attorney’s office for the Southern District of New York contacted Icahn Enterprises for information related to capitalization, securities offerings, due diligence, and other materials.
The report’s final conclusion stated “at this stage, Icahn’s net worth is reliant on selling overpriced IEP units to retail investors while convincing them that they will be rewarded with a consistent, safe dividend in perpetuity, despite extensive evidence to the contrary.”
According to a Prospectus Supplement filing, Morgan Stanley & Co. LLC was the sole book-running manager of Icahn Enterprises’ sale of two million depositary units.
Investors that suffered losses in Icahn Enterprises at the hands of their brokerage firm and/or broker/financial advisor, are encouraged to contact attorney Lawrence L. Klayman, Esq., for a free consultation at 888-997-9956, or firstname.lastname@example.org to discuss their recovery options.
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