After a pause in the stock market rally last week, Wall Street looked ready on Monday morning for another slow summer trading session. Stock index futures were mixed, with market participants waiting to see how the beginning of the official second-quarter earnings season later in the week goes. The results could set the tone for the market throughout the summer months.
Despite the quiet, there were a few stocks that made significant moves. Icahn Enterprises (IEP -0.12%) got a nice boost on favorable news concerning the investment vehicle of billionaire activist investor Carl Icahn. Elsewhere, shares of Helen of Troy (HELE 0.40%) also moved higher following its latest release of financial results. Read on to learn more about the details behind these two stocks.
Icahn gets finances in order
Shares of Icahn Enterprises jumped 10% in premarket trading on Monday morning. The investment company has been under fire lately, but it managed to resolve a key sticking point that could make investors a lot more comfortable about its prospects going forward.
Icahn Enterprises had seen its share price fall sharply after a report from short-selling research specialist Hindenburg Research had criticized the investment vehicle. The report raised several concerns, including the stock's valuation compared to similar investments as well as the entangling of financing arrangements between Icahn Enterprises and Carl Icahn himself.
However, Carl Icahn reportedly negotiated amendments to personal loan arrangements with lenders over the weekend, according to The Wall Street Journal. Rather than selling off shares of Icahn Enterprises and incurring capital gains taxes as a result, Icahn had pledged a huge portion of his Icahn Enterprises holdings as collateral. This had raised the risk that a slide in the stock price could trigger margin calls under the terms of those personal loans, which in turn would have likely had a devastating impact on Icahn Enterprises.
According to reports, lenders will no longer focus on the stock price of Icahn Enterprises, instead looking at its net asset value to determine whether a margin call is appropriate. In exchange, Carl Icahn agreed to offer more assets as collateral for the loans, and he also agreed to a repayment schedule that will dramatically reduce his personal debt over the next few years. That might not be enough to put all of Hindenburg's concerns to rest, but it made shareholders a lot more comfortable with Icahn Enterprises.
Helen of Troy heads in the right direction
Meanwhile, shares of Helen of Troy got an 8% boost early Monday. The beauty company reported fiscal first-quarter results for the period ended May 31 that gave shareholders a lot more comfort in its global restructuring plan.
Helen of Troy's financial numbers showed the pressure the beauty specialist has been under lately. Revenue slumped 6.6% year over year to $475 million. Despite improved margins, the bottom line still took a hit, with adjusted earnings of $1.94 per share down almost 20% from year-ago levels.
However, CEO Julien Mininberg highlighted successful efforts, including strong results from its international segment and solid performance from key brands that helped boost U.S. market share. Despite lower consumer demand and shifts in spending behavior, Mininberg believes that Helen of Troy's "Project Pegasus" should help it reduce debt and pursue initiatives to bolster long-term growth.
Helen of Troy also reaffirmed its outlook for the full 2024 fiscal year, projecting a return to bottom-line gains by the second half of the period. That will be welcome news for shareholders, who have seen the stock price get cut in half since early 2022.
