Bill Ackman, the billionaire investor and CEO of Pershing Square Capital Management, has questioned the valuation of Carl Icahn’s flagship firm, Icahn Enterprises (IEP). In a tweet on Wednesday, Ackman noted that the company’s premium had been sustained by a large dividend yield, which is funded by the company selling stock to investors.
Ackman’s comments come after short-seller Hindenburg Research accused IEP of overvaluing its holdings and relying on a “Ponzi-like” structure to pay dividends. Icahn has called Hindenburg’s report “self-serving” and reiterated his defense of the company.
Shares in IEP have lost more than half their value so far this year, and the stock was down another 0.3% in extended trading. On May 10, IEP said it was contacted by U.S. prosecutors, and it posted a surprise quarterly loss in the first quarter.
Ackman and Icahn have a long history of rivalry, having locked horns over the supplement company Herbalife in early 2013. Ackman said that IEP’s performance history and governance structure do not justify a premium, and he is neither long nor short on the stock.