Carl Icahn Selling Large Stake in Occidental Petroleum

Carl Icahn seems to be losing his enthusiasm for Occidental Petroleum (NYSE:OXY). The high-profile investor’s Icahn Capital divulged in a regulatory filing Monday that it will sell up to 30 million shares of the oil and gas company, which at the maximum would constitute nearly 28% of Icahn’s total holding.

In the filing, Icahn Capital said the move was merely a repositioning.

“While we still believe in Occidental, our investment has become somewhat of an outsized position in our investment portfolio, and as a result, we believe it is prudent to reduce the size of our position to rebalance our portfolio,” the would-be seller wrote.

Toy oil rig and barrel atop various denominations of currency.

Image source: Getty Images.

At the moment, Icahn Capital and other entities affiliated with the billionaire investor are collectively Occidental’s third-largest shareholder; their more than 107.9 million-share holding comprises nearly 12% of the company’s shares outstanding tally.

The announcement comes barely one year after Icahn dramatically increased his stake in the company, from an approximate 2.5% to around 10%. At the time, the activist investor was sharply critical of Occidental management for the way it acquired its peer Anadarko Petroleum. The $55 billion deal generated a significant pile of debt for Occidental, a challenging situation that has since been exacerbated by the coronavirus pandemic’s damaging effects on the oil industry.

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Occidental has not yet officially commented on Icahn Capital’s announcement.

This is not ideal timing for Occidental, since like its peers it could use a note of confidence or several from its major shareholders. On Monday the stock closed 4.3% lower, in contrast to the nearly 0.7% gain of the S&P 500 index.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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