“Get A Dog”: Bill Ackman’s Rivalry With Carl Icahn Renewed As He Compares IEP With Archegos

Bill Ackman questioned Carl Icahn’s firm’s valuation, taking another shot at his old rivalry, whose company has been the focus of short-seller Hindenburg Research.

In a tweet on Wednesday, the billionaire investor said he was “fascinated” by the situation involving the short seller and Icahn Enterprises (Nasdaq: IEP), noting that the company’s premium had been supported by a substantial dividend yield.

“The yield is generated by returning capital to outside shareholders, which is in turn funded by the company selling stock to investors,” Ackman said, adding the system is highly dependent on the “maintenance of the premium and the placidity of Icahn’s margin lender(s)”.

Hindenburg accused IEP in its report of overvaluing its assets and relying on a “Ponzi-like” structure to distribute dividends. Icahn has termed Hindenburg’s study “self-serving” and has defended the business.

“IEP’s performance history and governance structure do not justify a premium; rather they suggest that a large discount to net asset value would be appropriate,” Ackman said.

In the midst of the plummeting stock following Hindenburg Research’s report, IEP announced that it will be continuing its dividend as usual in an effort to calm investor fears.

The day following the report, the US Attorney’s Office for the Southern District of New York contacted IEP, asking for information on the firm’s assets, corporate governance, dividends, and other matters, according to a securities filing.

Icahn then announced in May that his investment company is under investigation by federal prosecutors and attacked the short seller who likely triggered the investigation, accusing him of “wantonly destroying property and harming innocent civilians.”

IEP shares have lost more than half of their value this year.


Hindenburg Research, according to Ackman, has “outed” the way Icahn conducts his publicly traded company, and shares have room to fall after falling to their lowest levels since 2009.

“$IEP reminds me somewhat of Archegos where the swap counterparties were comforted by each having relatively smaller exposures to the situation,” Ackman said, referring to Bill Hwang’s family office that spectacularly blew up in 2021. 

Ackman added: “The problem is that multiple lenders make for a more chaotic situation. All it takes is for one lender to break ranks and liquidate shares or attempt to hedge, before the house comes falling down.”

Archegos Capital Management was a limited partnership family office that controlled Hwang’s personal assets, which totaled more than $36 billion at one point. Archegos defaulted on margin calls from major global investment banks, including Credit Suisse and Nomura Holdings, as well as Goldman Sachs and Morgan Stanley, in March 2021. Its derivative arrangements “exposed the firm to severe losses when trades went bad.”

According to the Wall Street Journal, Hwang lost $8 billion in ten days, and Bloomberg News stated that Hwang lost $20 billion in two days. A month after, Hwang was indicted and detained on federal counts of fraud and racketeering.

In his tweet, Ackman also said that he’s surprised Icahn has not disclosed the terms of his margin loans including who provided them, citing an SEC rule that require disclosure of sources of financing.

Feud renewed

In January 2013, the hedge fund billionaires were embroiled in a fierce battle over Ackman’s $1 billion bet against Herbalife stock. The squabble reached a head on live television.

In a phone interview on CNBC’s Fast Money Halftime Report, Ackman defended himself against Icahn’s attacks for exposing the short the month before and agreed to have Icahn come into the show.

When they first got on the phone, Icahn dubbed Ackman a “liar” and accused him of having “one of the worst reputations on Wall Street.” He subsequently told Ackman, “I wouldn’t invest with you if you were the last man on Earth.”

Ackman responded, “Icahn unfortunately does not have a good reputation for being a handshake guy.”

A month after, Icahn disclosed a large interest in Herbalife in a filing, effectively taking the other side of the short, which Ackman fought for months, claiming the stock would sink to zero and accused the multilevel marketing corporation of being a “pyramid scheme.”

Icahn and Ackman would remain on opposite sides of the Herbalife trade for years, but they reconciled and hugged each other at the CNBC-Institutional Investor “Delivering Alpha” conference in July 2014.

“Icahn’s favorite Wall Street saying: ‘If you want a friend, get a dog.’,” Ackman said in his latest tweet, referencing one of Icahn’s statement in their CNBC feud dubbed ‘the battle of the billionaires’. “Over his storied career, Icahn has made many enemies. I don’t know that he has any real friends. He could use one here,” Ackman added.

The 57-year old investor clarified that his firm is neither long or short but is just “watching from a distance.”

Information for this briefing was found via Bloomberg, Yahoo Finance, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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