What happened
It's been tough sledding of late for billionaire Carl Icahn's namesake master limited partnership Icahn Enterprises (IEP 1.05%). Through the first three and a half days of trading this week, the diversified holding company's units shed 16% of their value, according to data provided by S&P Global Market Intelligence.
Since the start of May, Icahn Enterprises' unit price has fallen by a staggering 38%, in part in response to the publication of a short-seller report from Nathan Anderson's Hindenburg Research on May 2.
So what
In the report, Anderson's self-styled financial forensics firm called the holding company's valuation into question, along with the sustainability of its enormous dividend, which at recent share prices yields more than 20%. On Wednesday, Icahn responded to Hindenburg's various allegations for the second time this month.
NASDAQ: IEP
Key Data Points
Unfortunately, his response failed to assuage investors' concerns. The key reason is that earlier that day, Icahn Enterprises posted disappointing first-quarter results. Lowlights from the report included a $270 million net loss for the period and a 36.5% year-over-year drop in revenue.
Now what
Is it time to catch this falling knife? Probably not. While Icahn Enterprises has a long track record of delivering market-beating returns, its first-quarter performance was concerning. As such, the smarter move would likely be to wait until the company's fortunes show signs of improvement before buying units.
