Replies to post #412 on Icahn Enterprises LP (IEP)

[ItsMyOption]

more on dividend payout and low pps:

Can Icahn (or IEP insiders) sell units before the dividend pay date to push the price down and get more shares?
Short answer:
They could sell, but doing so for the purpose of manipulating the price would be illegal.
Selling simply because they want liquidity is legal.
Selling to influence the VWAP used for the dividend share calculation crosses into market manipulation, which is prohibited.
Let’s unpack it clearly.

🧠 1. What would be the motive?
IEP’s dividend reinvestment formula uses a 5-day VWAP ending on the payment date.
Lower VWAP ? more shares issued to those who elect stock.
So in theory, if Icahn or affiliates sold a large amount of units before the VWAP window, it could push the price down and increase the number of units they receive.
But…

⚖️ 2. Is that legal? No — if the intent is manipulation.
U.S. securities law is very clear:
Market manipulation = illegal
This includes:
• Trading with the intent to artificially influence price
• Coordinated selling to distort VWAP
• Any action designed to affect a corporate action calculation (like a DRIP price)
The SEC has prosecuted companies and insiders for:
• “Marking the close”
• “Painting the tape”
• “Manipulating VWAP windows”
• “Trading to influence conversion ratios or dividend calculations”
Intent is the key.
If the purpose is to influence the price used in a corporate action ? illegal.

🧾 3. What is legal?
Insiders can:
• Sell shares for normal reasons
• Sell during open trading windows
• Sell with proper 10b5-1 plans
• Sell without any intent to manipulate VWAP
If the selling is:
• Disclosed
• Pre-planned
• Not coordinated
• Not intended to affect the dividend calculation
? Legal.

🧱 4. Could Icahn practically manipulate the price?
IEP’s float is large, but the daily volume is relatively modest.
A major insider selling aggressively could move the price — but:
• It would be visible
• It would be traceable
• It would be high-risk legally
• It would invite SEC scrutiny, especially given IEP’s history of short-seller attention
Icahn is many things, but he’s not reckless with SEC rules.

🧮 5. Does Icahn personally benefit from lower VWAP?
Not really.
IEP dividends are paid in:
• Cash (which costs the company money), or
• Units (which dilute the company)
If Icahn takes units:
• He gets more units at lower VWAP
• But the company dilutes more
• And the market sees the dilution
• Which can depress the stock further
It’s not a clean “win.”