Ackman calls Icahn’s IEP a high premium after Hindenburg was reported by Reuters

© Reuters. FILE PHOTO: Bill Ackman, CEO and portfolio manager at Pershing Square Capital Management, speaks during the SALT Conference in Las Vegas, Nevada, US May 18, 2017. REUTERS/Richard Bryan

(Reuters) – Bill Ackman questioned the valuation of Carl Icahn’s flagship company when he dealt another blow to his old rival, whose firm has become a target of short research firm Hindenburg.

The billionaire investor said in a tweet on Wednesday that he was “intrigued” by the situation between the short seller and Icahn Ventures, noting that the company’s premium is sustainable through a large dividend yield.

“The return results from returning capital to outside shareholders, which in turn is funded by the company that sells the shares to investors,” Ackman said, adding that the system relies heavily on “keeping the premium and Icahn’s margin lender(s) quiet.”

An Icahn representative could not immediately be reached for comment. Bill Ackman declined to comment beyond his tweet.

In its report, Hindenburg accused the IIE of overvaluing its holdings and relying on a “Ponzi-like” structure to pay dividends. Icahn called the Hindenburg report “self-serving” and reiterated his defense of the company.

Shares in the IEP have lost more than half of their value so far this year. The stock fell another 0.3% in extended trading.

On May 10, the IEP said it was contacted by U.S. prosecutors, and posted a surprise quarterly loss in the first quarter.

Icahn closed horns with Ackman on the supplement company herbalife (NYSE:) in early 2013 by taking the other side of the trade, in what was dubbed at the time the “Battle of the Billionaires”.

“The IEP’s performance history and governance structure do not justify the premium, but rather suggest that a substantial discount to net asset value would be appropriate,” Ackman said, adding that it was neither long nor short for the stock.

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