Bill Ackman, founder and CEO of hedge fund Pershing Square, is taking a bit of a victory lap on social media after Hindenburg Research took a short position against his old rival, Carl Icahn, this week.
Moments after the short-seller put out a report calling Icahn Enterprises' (IEP) economic structure "ponzi-like," Ackman tweeted about 'karma' and 'the circle of life and death.'
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Hindenburg's report said that the dividends IEP pays out are "mathematically unsustainable" due to the fact that $1.5 billion in cash dividends have been paid since 2014 despite negative free cash flow of $4.9 billion during that period.
In short, Icahn has been using money from new investors to pay out dividends to old investors," the note stated.
Ackman and Carl Icahn once publicly butted heads in 2013 live on CNBC with Icahn calling Ackman a "liar" on air while also saying that he wouldn't invest with him if "you were the last man on Earth."
The two feuded for months over Herbalife (HLF) after Ackman took a $1 billion short position against the company, predicting that it's stock would eventually go to zero.
Icahn bet against that short by purchasing large amounts of stock. Over time, Icahn became Herbalife's largest individual shareholder, pushing the company higher while Ackman's short bet against the company eventually cost him close to $1 billion dollars when he finally exited his position in 2018.
While Icahn's Herbalife gambit cost Ackman a lot of money, Hindenburg's short position is costing Icahn 10 times that amount, and counting.
