Last week Think Progress first pointed out that Carl Trump – a former advisor to Donald Trump – sold about $30 million in crane manufacturer Manitowoc shares in the weeks before President Trump said he would impose new tariffs on US steel imports.
A regulatory filing showed that the billionaire investor sold roughly a third of his stake in the Wisconsin-based company which has a sizable exposure to U.S. steel imports, from Feb. 12 through Feb. 22 (he remains Manitowoc’s fifth-largest holder with about 4.8% of the company’s common shares). Icahn first disclosed a stake in Manitowoc in late 2014 and said at the time he may seek board representation at the company, calling its stock undervalued.
Then, last Thursday Trump unexpectedly proposed slapping tariffs of 25% on imported steel and 10% on aluminum, which sent the stock into a tailspin: Shares of Manitowoc fell as much as 7% in New York trading Friday, and have lost over 20% since Feb. 9, the last trading day before Icahn starting reducing his stake. The issue is that Icahn had sold a substantial chunk just ahead of the announcement.
Icahn has fallen in regulatory crosshairs before: he quit his role as a special regulatory adviser to Trump in August after Democratic lawmakers asked questions about potential conflicts of interest with his business dealings in oil refining and insurance. Icahn at the time denied profiting from his advice-giving role, a possibility raised by critics who had asked administration officials to investigate his work.
Obviously, the implication was that Trump may have told Icahn what he was about to do, and that Icahn traded on the inside information, which would have a clearly negative impact on shares of Manitowoc stock (it did).
Fast forward to today, when shortly after noon, Icahn issued a formal statement regarding Manitowoc. This is what he said (highlights his):
“We don’t generally comment on rumors, but the recent media speculation regarding our sale of Manitowoc stock calls for a response. We state for the record: Any suggestion that we had prior knowledge of the Trump administration’s announcement of new tariffs on steel imports is categorically untrue. We reduced our position in Manitowoc for legitimate investment reasons having nothing to do with that announcement.”
In other words, Icahn is saying he would hardly have been dumb enough to frontrun an announcement by the president just days in advance. Perhaps, although something tells us that this may be just the beginning of this particular story, and that going forward all of Icahn’s stock trades will be far more closely scrutinized, especially if Icahn continues to suggest, like he did last month, that a “market earthquake is coming”, and that “a lot of people will pay the price like in 1929.“