According to a 13D filing with the SEC, Icahn Partners, overseen by billionaire Carl Icahn, has initiated a position in Cheniere Energy Inc. (NYSE:LNG). The filing revealed that Carl Icahn’s firm and its affiliates collectively own 19.35 million shares of the energy company, which represent 8.18% of its outstanding common stock. Reportedly, Carl Icahn believes that the shares of Cheniere are undervalued and announced his intention to discuss with the company’s management and Board of Directors on its operations, capital expenditures, financings, and executive compensation in order to find opportunities that might unlock shareholder value. Carl Icahn may also seek shareholder board representation if he considers suitable.
Activist investor Carl Icahn is not afraid to increase his exposure in the energy sector after suffering substantial losses in this sector this year caused the worst commodity price crash for a long period of time. At the beginning of the year, Carl Icahn’s publicly traded holding company Icahn Enterprises LP suffered its first annual net loss since the financial crisis of 2008, which was triggered by the glut of the fuel that collapsed prices. Icahn’s latest 13F, for the first quarter of 2015, disclosed around 14% of its $32 billion equity portfolio allocated to the energy sector. Among his top energy picks are Talisman Energy Inc. (NYSE:TLM) and Chesapeake Energy Corporation (NYSE:CHK).
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Cheniere Energy Inc. (NYSE:LNG) is an energy company that primarily engages in Liquefied natural gas (LNG) related businesses. The company owns and operates the Sabine Pass LNG receiving terminal and Creole Trail Pipeline, located in Louisiana, through its general partner ownership interest in Cheniere Energy Partners L.P. (NYSE:CQP) and its partial ownership interest in Cheniere Energy Partners Holdings LLC (NYSE:CQH). The stock is down by 7% year-to-date, but it appreciated by more than 4% in pre-market trading on Friday.
It is believed that the energy company will become the first exporter of a bounty of gas from the U.S. shale formations. Cheniere has attained federal permits to export U.S. natural gas all around the world by chilling the gas into a liquid so that it can be loaded on tankers and delivered to customers overseas. Cheniere Energy is currently building a second export terminal in Texas, which will allow the company to export plenty of gas abroad. On July 30, Cheniere Energy announced an important deal with a buyer from Chile to purchase gas over a time span of 20 years. Specifically, Cheniere has entered into a liquefied natural gas (LNG) sale and purchase agreement with Central El Campesino, under which the latter would purchase roughly 0.6 million tonnes per annum of LNG delivered ex-ship for 20 years starting from 2019. In addition to that, the company has also signed other deals with different buyers and expects to ship its first cargoes by the end of 2015.
Just a few days ago, Cheniere Energy posted its financial results for the second quarter of this year, which reveals some blurry signs of improvement. The company posted a total revenue of $68.03 million for the quarter, compared to $67.65 million reported a year ago. At the same time, the energy company reported a net loss of $118.5 million or $0.52 per share, versus a loss of $201.9 million or $0.90 per share delivered in the second quarter of 2014.
Considering the fact that the reputable activist investor Carl Icahn has initiated an activist stake in Cheniere Energy and declared his intentions to discuss with the management of the company and its Board of Directors on some issues that might unlock shareholder value, the stock represents a great buying opportunity as of now. Cheniere Energy Inc. (NYSE:LNG) was among the billionaires’ favorite energy stocks at the end of Q1, with 11 funds holding around $4.10 billion worth of stock. Among them, Andreas Halvorsen’s Viking Global was one of the largest shareholders in the company from our database with a stake of 15.45 million shares.
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