Carl Icahn, the billionaire investor, disclosed of his move to increase his Cheniere Energy Inc. (NYSE:LNG) holdings on September 14. The company has reached an agreement on August with Icanh to add two representatives to the board. Icanh at present holds 22.7 million of outstanding shares of the Houston energy company. It comes to about 9.59 percent of the total shares. This information was furnished by Icahn with Securities and Exchange Commission.
Icahn and Rise in Stock Price
The investor paid varying amounts per share, the minimum being $53.60 and maximum $54.75 for every share to snag additional shares. The share price of Cheniere, which has previously plummeted almost 21 percent in August, ended its regular trading to stop at $54.14 on September 14. The price of stock increased 2.43 percent during the afterhours trading post news of Icahn increasing his stake.
Icahn is known for his activism and the activist investor is closely watched for his moves. He has previously made huge bets on a number of companies. He and his team are known for pushing management to perform much better.
Cheniere appointed two people to the board: Samuel Merksamer and Jonathan Christodoro, both of them directors at Icahn's company- Icahn Enterprises. The move came two weeks after the activist investor disclosed the greater stake in the company and expressed his wish to talk to the company management. Icahn did not make himself available to the press on the reason for upping his stake.
Cheniere has a number of prominent investors like Lone Pine Capital, Viking Global Investors, D.E Shaw, Baupost Group and PointState Capital among a number of others. The company, however, has its fair share of detractors, including Jim Chanos, the prominent short seller, who has publicly bet on the share price of the company going down. According to Chanos, there is no growth in demand for liquefied natural gas and the space is bound to crash.
Cheniere is making preparations to ship its first major export of natural gas. The consignment will be sent by sea from a nearly constructed plant located in the Gulf Coast of Louisiana. The company has hemorrhaged money every year from the time it was established almost 20 years ago, but Cheniere has contracts of selling gas to generate billions in revenue once shipments began to roll out.