Shares of Icahn Enterprises faced a significant drop in premarket trading on Friday following the company's announcement of a steep cut to its quarterly distribution and a wider second-quarter loss. The company, identified by the ticker symbol IEP, reduced its quarterly distribution from $2 to $1.

According to the chairman of Icahn Enterprises, activist investor Carl Icahn, the second quarter was influenced, in part, by the impact of short-selling on companies controlled or invested in by Icahn Enterprises. This impact was attributed to the misleading and self-serving Hindenburg report that targeted the company. Additionally, it reflected the size of the hedge book relative to their activist strategy.

Earlier this year, short-seller Hindenburg Research released a critical report on Icahn Enterprises, further affecting their performance.

During the second quarter, Icahn Enterprises reported a loss of 72 cents per share, wider than the loss of 41 cents per share in the same period the previous year. Furthermore, the company experienced a decline in revenue compared to the prior year.

As a result of these challenges, shares of Icahn Enterprises fell dramatically by 28% to $23.64 in premarket trading. Throughout 2023, the stock has already dropped by 35%.

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