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Following Hindenburg’s criticism, Icahn renegotiated some loan terms to reduce the possibility of a margin call. The new agreement decouples his personal loans from Icahn Enterprises’ share performance and ties them to the firm’s indicative net asset value (NAV). This change comes after the NAV fell to $5 billion in the first half of the year from $5.6 billion at the end of 2022. Icahn stated that the new terms had “significantly diffused” the effects of Hindenburg’s report.
The company reported a decrease in revenue, falling to $2.5 billion last quarter from $3.5 billion a year earlier, and its net loss widened to $269 million, up from $128 million. Despite these struggles, Icahn reiterated his confidence in the current portfolio and the focus on activism, which has been the hallmark of his investment approach.
Icahn Enterprises did achieve a victory in May, winning a board seat at Illumina Inc (NASDAQ:ILMN). following a proxy battle related to the purchase and subsequent resale of cancer-detection firm Grail Inc. Despite the resignation of Illumina’s CEO after the battle, Icahn has maintained that “activism is the best investment paradigm.”
This article was originally published on Quiver Quantitative
