Carl Icahn, the legendary financial investor, has been targeted by a no less activist short seller: Hindenburg Research. The company, led by Nathan Anderson, accuses Icahn of inflating the assets of its listed conglomerate I cahn Enterprises IEP, in some cases by more than 75 percent. The financial markets apparently consider it possible that there is some truth to the allegations. The share price plummeted by 20 percent after the release. It's not a miracle. Hindenburg has earned a reputation for uncovering grievances and making airy accounting practices public.

Winand von Petersdorff-Campen

Economic correspondent in Washington.

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The most spectacular case was that of the vehicle manufacturer Nikola Corporation, whose boss and founder Trevor Milton was convicted of serious fraud and is now awaiting the announcement of the sentence. The investigation was triggered by Hindenburg. The next big names were India's Adani Group, one of India's largest corporations. After the publication of an analysis at the end of last year, the conglomerate lost half of its market value and has not recovered from it so far. Twitter founder Jack Dorsey's payment service provider Block has lost about 25 percent of its market value since Hindenburg presented a critical report on March 23. Hindenburg's criticism is the same: it is always about inflated assets and sales values.

The attack on Icahn has its own irony, because the investor himself sought to bring companies into line with aggressive advances. Apple and Ebay know a thing or two about it. Icahn is now defending himself against the Hindenburg report with a sparse message: "We believe that Hindenburg Research's self-serving short seller report today was intended solely to generate profits from Hindenburg's short position at the expense of IEP's long-term shareholders." The performance speaks for itself, the liquid capital of $2 billion allows the company to follow its strategy from a position of strength. Icahn is not entirely wrong. Hindenburg does indeed have short positions in IEP and openly admits it.

Hindenburg's report is fueled by the fact that IEP is indeed an unusual undertaking in at least two respects. It is organized in the legal form of a partnership, which gives Icahn more power of disposal and a lower tax burden. In addition, IEP grants an exceptionally high dividend. For a long time, the pre-tax dividend yield was 15 percent. According to Hindenburg, the dividend payments are decoupled from cash flow, so he sells company shares in order to be able to finance the distributions.

Bill Ackman laughs

He gets money from new investors in order to be able to pay the dividend of old investors. This structure corresponds to that of a Ponzi scheme. If miracles do not happen, sooner or later IEP will have to stop paying dividends. "All in all, we think Wall Street legend Icahn made a classic mistake by raising too much debt in the face of sustained losses. It rarely ends well."

Meanwhile, investor Bill Ackman, a well-known competitor of Icahn, is laughing his head off. The two have been irreconcilable since Icahn helped Herbalife against a short-selling attack by Ackman. Ackman noted on Twitter that the short seller's report has a transcendent karma quality. It underlines the idea of existence as a cycle of life and death. That is why it is imperative that the report be read.