Activist investor Carl Icahn's wealth plunged by $10 billion after a short-seller accused his company of running a 'Ponzi-like' structure

Carl Icahn's fortune took a $10 billion hit following a short seller report.

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• Legendary investor Carl Icahn's wealth dropped by $10 billion after a short-seller's allegations. 
• Hindenburg Research released a report alleging "Ponzi-like" economic structures at Icahn Enterprises.
• Shares of Icahn Enterprises closed 20% lower at $40.36 on Tuesday.

Activist investor Carl Icahn's wealth plunged by $10 billion on Tuesday after Hindenburg Research — a short-seller that took on one of Asia's richest men earlier this year — targeted Icahn Enterprises with a scathing report.

While disclosing a short position against Icahn Enterprises, New York-based Hindenburg claimed that the Wall Street legend's holding company used inflated asset valuations, further alleging "Ponzi-like" economic structures at the firm. 

Hindenburg also said in the report Icahn Enterprises has been "using money taken in from new investors to pay out dividends to old investors." The allegations sent the company's share prices tumbling by 20% after the opening bell on Tuesday.

As Icahn derives his wealth from an 89% stake in Icahn Enterprises, his fortune was hit by the rout. He is now worth $14.6 billion — that's 41% of his net worth on Monday — according to the Bloomberg Billionaires Index.

Icahn Enterprises responded to the allegations on the same day, saying Hindenburg Research's report is "self-serving" and "intended solely to generate profits on Hindenburg's short position at the expense of IEP's long-term unitholders."

It further said the company "operates from a position of strength" and has about $2 billion of cash and cash-equivalents on its balance sheet as of March 21.

Shares of Icahn Enterprises closed 20% lower at $40.36 on Tuesday. They were down 0.9% in after-hours trade.

Icahn is the third public figure to be targeted by Hindenburg Research this year. On January 24, the short-seller shocked the markets when it alleged that India's Adani Group had "engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades."

The report hit investor sentiment and sent Adani-related stocks into a tailspin, which lost over $150 billion in value in about five weeks, per Bloomberg.

Even founder Gautam Adani's net worth halved to about $62 billion now from $121 billion before the report, per Bloomberg Billionaires Index. Adani is now the third richest person in Asia after India's Mukesh Ambani and China's Zhong Shanshan.

In March, Hindenburg teased another report, tweeting it was going to release a "new report soon." It followed up with a report on payments company Block — co-founded by Twitter founded Jack Dorsey — stating that the company misled investors "with inflated metrics" and facilitated fraud.

Dorsey's net worth tumbled by $526 million in a single day following the report.

Hindenburg Research did not immediately respond to Insider's request for comment sent outside regular business hours. Insider was unable to reach Icahn Enterprises via phone outside regular business hours.

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