Key Points
- Carl Icahn and the banks amended agreements that untie his personal loans from the Icahn Enterprises L.P. stock price. a short seller has raised concerns about Icahn shares.
- Icahn Enterprises shares jumped about 20% on Monday morning after the news.
Shares of Icahn Enterprises L.P. (IEP) soared about 20% in intraday trading on Monday after Chairman Carl Icahn struck a deal with banks that untie his personal loans from the price of company shares.
The deal came after short seller Hindenburg Research in May accused Icahn of inflating the value of IEP's assets and borrowing against its holdings. Hindenburg also suggested that IEP's $2 quarterly cash dividend may not be supported by the investment company's cash flow and performance.
In a regulatory file, the& #39;IEP said the three-year agreement with the banks “amends and restates previous loan agreements with these lenders and consolidates all of Mr. Icahn's borrowings.”
Icahn has agreed to make an initial principal payment of $500 million by September 1, quarterly principal payments of $87.5 million beginning September 1, 2024, and final principal payment of $2.5 billion at the end of the agreement.
The actions of Icahn Enterprises L.P. had fallen by double digits following the Hindenburg report, and despite today's gains, they still lost a third of their value this year.
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Source: investopedia.com
