It keeps getting worse for Carl Icahn.

Icahn Enterprises LP is sinking on the stock market — again. On Thursday, it plummeted as much as 25%, on pace to close at its lowest point since 2004.

Icahn’s personal fortune is dwindling — again. On paper, today’s loss has cost him $979 million.

It’s one more bad day in a weeks-long run of bad days for Icahn since short-seller Hindenburg Research trained its sights on the legendary Lone Wolf of Wall Street. The questions keep coming, including the big one: How is he going to get out of this?

Icahn, 87, has borrowed billions against his stock in Icahn Enterprises. That raises the prospect of a margin call as the price keep sinking. Icahn, who controls about 84% of the company, could simply buy the rest of the stock and take Icahn Enterprises private — a stunning reversal for a figure who’s made his name and fortune by tilting at major public companies.

“The thread here is always the same — leverage cuts both ways,” said Peter Borish, a founding partner at Tudor Investment Corp. who is now president of his family office, Computer Trading Corp. “On the way up it’s great, but in markets, you take the escalator up and elevator down.”

A representative for Icahn didn’t reply to a request for comment.

Ackman Roast
As if to add an exclamation point, an old nemesis, hedge-fund billionaire Bill Ackman, keeps roasting Icahn on Twitter. In a tweet late Wednesday, Ackman said Icahn Enterprises reminded him “somewhat” of Bill Hwang’s Archegos Capital Management, whose 2021 collapse sent shock waves through global finance.

But it was Hindenburg, run by 38-year-old Nate Anderson, that pressed the down button on Icahn Enterprises some three weeks ago. In a May 2 report, the short seller accused Icahn of costly missteps, if not outright malfeasance, and said the company was drastically overvalued. The firm, in a statement, has called the allegations “self-serving” and vowed to “fight back.”

Since then, Icahn Enterprises’ stock price has fallen more than 60%. That’s reduced Icahn’s net worth by more than $16 billion, according to the Bloomberg Billionaires Index.

In a lengthy interview with Bloomberg on Sunday, Icahn mostly waved off the uncomfortable questions. He said he was focused on getting back to what he does best: shaking up the companies he invests in.

That includes Illumina Inc., where he nominated three people to serve as directors. He notched a partial win Thursday: Shareholders voted to elect Andrew Teno, a portfolio manager at Icahn Capital. The other eight directors were re-elected, including Illumina Chief Executive Officer Francis deSouza, whom Icahn had sought to oust.

Building Positions
Meanwhile, Icahn has been building other positions. He bought $5.2 million of Southwest Gas Holdings Inc. shares between Monday and Wednesday, according to regulatory filings, in his first disclosed stock purchase since Hindenburg’s report. He’s added a total of almost $250 million worth of shares in the Las Vegas-based company this year, bringing his overall stake to about $616 million, according to data compiled by Bloomberg.

Icahn now owns about 15% of Southwest Gas. He started publicly calling for changes in late 2021, and last year reached a settlement with the company.

What’s unclear is what shakeup, if any, could be in store at Icahn Enterprises itself. The share price premium flagged by Hindenburg has eroded. The company’s market cap now stands at about $7 billion, down from $19 billion as recently as March. That means the portion of the firm that Icahn himself doesn’t own is worth just over $1 billion.

An added twist: Icahn Enterprises in February disclosed that Icahn had pledged stock worth about $9.8 billion as collateral against margin loans. He’s since increased his pledged shares by 21 million. Those are worth much less today.

Past regulatory filings said Icahn had other assets he could use to repay his loans and avoid a margin call. In a May filing from Icahn Enterprises, that language was absent. (Icahn declined to discuss his wealth, private funds or margin loans in the interview earlier this week.)

“Deleveraging,” Borish said, “can be swift and painful.”

--With assistance from Crystal Tse.

This article was provided by Bloomberg News.