Carl Icahn Increases His Ammunition against Jim Chanos in the Battle For Cheniere Energy

Cheniere Energy, Inc. (NYSEMKT:LNG) is not the only energy stock that Mr. Icahn is betting on, as the investor has a significant exposure to oil and natural gas companies. This was one of the reasons why his holding company, Icahn Enterprises LP (NASDAQ:IEP), reported its first quarterly loss since the financial crisis earlier this year. However, Cheniere Energy is one of the companies that he has been the most interested in lately. In early-August, when Mr. Icahn disclosed significantly increasing his stake in the company he also made his activist intentions clear and signaled that apart from engaging with the company’s Board to increase shareholder value, he would also be seeking Board representation. Hence it wasn’t much of a surprise when, on August 24, the company announced that it has increased its Board size by two to 11 to accommodate Jonathan Christodoro and Samuel Merksamer, both of whom serve as Managing Directors at Icahn Capital LP.

Cheniere Energy, Inc. (NYSEMKT:LNG)’s stock has had a gradual decline since the start of April and is currently trading down by 23.5% year-to-date. A minor part of that decline can be attributed to the 6.2% correction the shares had in the two days following the disclosure made by revered short seller Jim Chanos on September 9 that he is shorting the stock. With marquee hedge funds like Icahn Capital and Seth Klarman‘s Baupost Group, which held over 15.36 million shares of Cheniere Energy at the end of June, betting on the stock to go higher in the coming quarters and short-sellers like Jim Chanos taking the other side of the trade, it would be interesting to see which direction does Cheniere Energy’s stock goes in the short to medium-term.

Disclosure: None