CVI

Carl Icahn Aggressively Purchases 1.61 Million Shares of CVR Energy($CVI) During Price Plunge Amid US-China Trade Tensions

04/15/2025 23:38

Prominent U.S. investor Carl Icahn has been aggressively purchasing shares of $CVI over the past month, drawing significant attention from investors. According to SEC filings, Icahn bought approximately 1.61 million shares (worth about $28.7 million) from April 3 to April 15, 2025. What's particularly noteworthy is that Icahn's aggressive buying coincided with a sharp decline in the stock price amid escalating U.S.-China trade tensions. In early April, the U.S. stock market experienced considerable volatility as trade tensions between the United States and China intensified. On April 4, $CVI shares plunged approximately 8.5% to $16.06, and it was precisely at this point that Icahn purchased 267,600 shares (approximately $4.43 million). This represents his largest single-day purchase amount in recent transactions. Another important aspect to note is that Icahn's purchases were executed according to a Rule 10b5-1 trading plan adopted on February 21. This indicates that Icahn bought shares according to a pre-determined schedule, legally ensuring that the transactions were not based on inside information. CVR Energy is a refining and marketing company headquartered in Sugar Land, Texas, operating refineries in Kansas and Oklahoma. Icahn, already a major shareholder, had previously made substantial purchases in January and March 2025. On January 8, he acquired approximately 878,000 shares ($16 million), and between February 28 and March 14, he added about 960,000 shares ($17 million). These consistent purchases appear to be part of Icahn Enterprises' plan, announced in November 2024, to increase its stake in CVR Energy to 81.3%. At that time, Icahn Enterprises proposed purchasing 15 million CVR Energy shares at $17.50 per share. However, CVR Energy's recent performance has been less than stellar. In the third quarter of 2024, the company recorded a loss of $0.50 per share, with revenue declining 27.3% year-over-year to $1.83 billion. This fell short of market expectations of $1.91 billion. The company continued to struggle in the fourth quarter of 2024, posting a loss of $0.13 per share. The main cause of this underperformance is attributed to weak refining margins. In early July 2024, JP Morgan lowered price targets for U.S. refiners, including CVR Energy (to $26), citing weaker refining cracks. Industry experts projected only limited recovery in refining margins without increased demand or external supply disruptions. Additionally, the company has been showing active movement as part of its growth strategy, participating in the Citgo share auction. In July 2024, CEO David Lamp stated that the company was looking to diversify beyond the mid-continent oil refining market, supported by Icahn's investment. However, in January 2025, a fire occurred at the naphtha hydrotreater at the Coffeyville refinery in Kansas, after which planned maintenance work began. With a processing capacity of 132,000 barrels per day, this operational disruption could impact the company's short-term performance. Market experts offer several interpretations of Icahn's substantial purchases. First, Icahn likely believes the current stock price is significantly undervalued compared to the company's intrinsic value. Indeed, CVR Energy's stock has fallen more than 20% since November 2024, and its price-to-sales ratio (P/S) of 0.24 is lower than the industry average. Second, Icahn may have a positive long-term outlook for the refining industry. Although refining margins are currently weak, energy demand could increase as the global economy recovers, potentially improving refiners' profitability. Third, the company's diversification strategy and operational efficiency improvement efforts could yield positive results in the long term. CVR Energy is expanding into various fields beyond oil refining, including renewable diesel production and nitrogen fertilizer manufacturing. Energy sector analyst Jason Gaberdine commented, "Icahn's recent purchases signal strong confidence in the company's long-term value. Making large purchases during market instability can be interpreted as a very positive signal." However, not all experts are optimistic. Goldman Sachs' energy sector analyst advised caution, stating, "The refining industry faces structural challenges, and margin improvement will be difficult in the short term." Since Icahn began his large-scale purchases in early April, $CVI's stock price has rebounded by about 10%. After falling to $16.06 on April 4, the price recovered to $17.93 by April 14. However, it remains approximately 42% below its 52-week high of $30.69. The future direction of CVR Energy's stock depends on several factors. First, the recovery of refining margins is crucial. Second, the course of U.S.-China trade conflicts could impact energy demand and supply. Third, the outcomes of the company's diversification strategy and operational efficiency improvement efforts should be monitored. Finally, whether Icahn continues additional purchases will be an important indicator. If his buying behavior continues, it could serve as a positive signal to the market, but if he stops purchasing, it could amplify investor concerns. According to our data, Icahn continued buying until April 15, and his subsequent movements are receiving market attention.