Carl Icahn Believes Cheniere Energy Inc. (LNG) Is Undervalued and Acquires 8.18% Stake

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.

Hedge Fund Strategies

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).

Carl Icahn
Carl Icahn
Icahn Capital LP

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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.