Icahn Enterprises (IEP -9.38%) announced in a financial update Wednesday the net asset value of its holdings dropped significantly in the fourth quarter, though it did keep its quarterly dividend intact. Investors are viewing the glass as half-empty, sending shares of IEP down as much as 14% on Wednesday and off 8% as of 1 p.m. ET.

Overhaul in the C-suite and falling values

Carl Icahn is a legendary activist investor, but of late the focus has mostly been on activists questioning the investor’s business setup. Last spring, Hindenburg Research released a report calling Icahn Enterprises “substantially overvalued” and arguing that IEP relied on a “Ponzi-like” structure to fund its dividend.

The stock lost about half of its value following the Hindenburg report and has never recovered.

On Wednesday, IEP said it expects the net asset value of its holdings to fall about 8% sequentially as of the end of the quarter that ended in December, to $4.76 billion. The company is primarily a holding vehicle for various investments. IEP, which slashed its dividend by 50% last summer, also said it was keeping its quarterly payout at $1 per unit.

IEP also named portfolio manager Andrew Teno as CEO. He replaces David Willetts, who will move on to run portfolio company Pep Boys.

Icahn, who is chairman of the company, said Teno “has had an impressive record of stock picking and position stewardship within our investment segment.”

Is Icahn Enterprises a buy ahead of its CEO swap?

Icahn shows no sign of slowing down, just this week installing two representatives to the board of JetBlue Airways. The chairman sees other opportunities up ahead.

“The reason activism works so well is that, somewhat unfortunately, many public companies are not well run,” Icahn said in a letter to investors. “Given our track record, our stable capital base, and our willingness to launch proxy contests (which are extremely arduous and expensive to conduct and even more so to win), we are frequently invited into the tent without ever having to take aggressive actions.”

This is a complicated investment even in the best of times. IEP currently holds 25 board seats at various public companies in addition to private holdings including Pep Boys. The questions raised by Hindenburg only add to the fog surrounding IEP.

For those who believe in Icahn, IEP still trades well below where it did just a few quarters ago. And the dividend yield is about 20%. But be warned that even after the declines Hindenburg has continued to argue IEP is overvalued.

As Carl Icahn surely knows from his own activism, stocks don’t always go up.

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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