Cheniere Energy shares soar on Icahn bet

August 11 00:53 2015

Cheniere Energy (LNG) shares rose sharply Friday, one day after billionaire activist investor Carl Icahn disclosed a nearly 8.2% stake in the natural gas firm and called the stock undervalued. Shares of Houston-based Cheniere closed up 5.62% at $68.45, after retreating slightly from even higher intra-day gains.

An investor group headed by Icahn amassed nearly 19.4 million shares of Cheniere, including shares underlying forward contracts and call options, for nearly $1.13 billion, according to a Securities and Exchange Commission disclosure filed Thursday. The group wrote that its members plan to seek talks with Cheniere’s managers and board of directors about the company’s operations, capital expenditures, financing and executive compensation. The filing also signaled the group may seek representation on the company board.

A Cheniere representative did not immediately respond to a message seeking comment Friday Cheniere in June announced plans to begin construction on another part of the company’s liquefied natural gas terminal in Louisiana The company this year is expected to export the first significant amounts of U.S. liquefied natural gas by sea from the plant located on the state’s Gulf coast.

In July, Cheniere reported a net loss of $118.5 million, or 52 cents a share. For the six month period that ended June 30, Cheniere said the company had a net loss of $386.2 million, or $1.71 cents a share. The result widened the $299.7 million loss, or $1.34  cents a share, the company reported for the corresponding period of 2014. Icahn is well known for shaking up companies he’s targeted with significant investment bets. In May, he said tech giant Apple’s stock was “dramatically undervalued,” and said his target price for the company’s shares was $240.