Prominent activist investor Carl Icahn has acknowledged his error in placing a substantial bet on a market crash, ultimately resulting in his group suffering losses of nearly $9 billion over six years.
The net asset value of Icahn Enterprises LP (NASDAQ: IEP) decreased from $7.9 billion in 2017 to $5.6 billion this month, posing a potential issue for Icahn, as he traditionally opted for an annual dividend of $8 per share in stock rather than cash.
Consequently, the number of outstanding shares more than doubled over the six years, resulting in a decline in net asset value per share from $33 to roughly $16.
Also Read: Icahn’s Double Whammy: Q1 Stock Buys Followed By A Short Report.
While Icahn still maintains some belief that the economy is unfavorable and anticipates future challenges, he admitted, “We are still hedged, but not to the extent we were.”
According to an analysis by the Financial Times, the activist investor incurred losses of approximately $1.8 billion in 2017 due to hedging positions and further losses of $7 billion between 2018-Q1 of FY23.
Icahn admitted in an interview with the Financial Times, “I’ve always told people there is nobody who can really pick the market on a short-term or intermediate-term basis. Maybe I made the mistake of not adhering to my own advice in recent years.”
These trades have left Icahn in a precarious position and threaten his reputation as one of Wall Street’s most feared activist investors.
Price Action: IEP shares are down 4.35% at $33.19 premarket on the last check Friday.
Photo by Insider Monkey via Flickr Creative Commons
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This article Carl Icahn Admits Making A Mistake On Bearish Bet, Said He Should Have Kept His Own Advice originally appeared on Benzinga.com
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