CVI

Carl Icahn Acquires Additional $25 Million in CVR Energy ($CVI) Shares Despite Consecutive Quarterly Losses

04/28/2025 21:49

Billionaire investor Carl Icahn's continued large-scale purchases of CVR Energy ($CVI) shares have drawn significant attention from investors. Icahn's moves, amounting to approximately $25 million in April alone, are particularly noteworthy as the company continues to record consecutive quarterly losses. Recent disclosures show that Icahn purchased CVR Energy shares almost daily from April 3 to April 25, 2025. Particularly substantial acquisitions include 267,600 shares (approximately $4.43 million) on April 4 and 217,867 shares (about $3.66 million) on April 10. These purchases were executed according to a Rule 10b5-1 trading plan adopted on February 21, a mechanism that allows insiders to trade based on a predetermined schedule. Icahn's actions gain further significance considering that CVR Energy's stock has declined approximately 40% over the past six months. In late October 2024, the company reported third-quarter results that fell significantly short of expectations, posting a loss of $0.50 per share compared to earnings of $1.89 per share in the same period the previous year. Following this announcement, the stock plummeted 24.4% in a single trading day, reaching a 31-month low of $17.53. However, the recently announced Q1 2025 results were better than market expectations. The company reported a loss of $0.58 per share, outperforming analysts' projected loss of $0.89 per share. Revenue came in at $1.646 billion, exceeding the expected $1.308 billion. CVR Energy is a small-cap energy company primarily engaged in petroleum refining and nitrogen fertilizer production. Headquartered in Sugar Land, Texas, the company operates refineries in Coffeyville, Kansas, and Wynnewood, Oklahoma. Notably, a fire at the Coffeyville refinery in January necessitated an acceleration of planned maintenance work. The U.S. energy sector has faced several challenges in recent months. Weakening refining margins (crack spreads) have pressured the profitability of many refining companies, prompting JP Morgan to downgrade price targets across U.S. refiners in July. CVR Energy's price target was adjusted to $26. Additionally, in early April 2025, U.S. markets experienced significant turmoil following President Trump's announcement of a 104% tariff on imports from China. The S&P 500 dropped over 17% from its record high, while the Nasdaq entered bear market territory with a decline exceeding 20%. This market instability negatively impacted numerous industries, including the energy sector. Despite these challenges, Icahn continues to increase his investment in CVR Energy. In November 2024, Icahn Enterprises announced a proposal to increase its stake in CVR Energy to 81.3% by purchasing 15 million shares at $17.50 each, representing a 6% premium over the market price at that time. Icahn's investment behavior suggests he places a high value on the company's long-term potential. Considering that CVR Energy participated in the auction for Citgo Petroleum in mid-2024, it appears Icahn supports the company's expansion strategy. Although an Elliott affiliate, Amber Energy, won the auction with a conditional $7.3 billion offer, CVR Energy reportedly made an all-cash offer of approximately $8 billion during the process. Currently classified as a small-cap with a market capitalization of $1.767 billion, CVR Energy exhibits high volatility. Analysts maintain an average 'sell' rating with a median price target around $20. However, Icahn's persistent buying indicates he views the company's future more optimistically than the market consensus. Energy market experts anticipate continued crude price volatility and policy uncertainty while noting the potential for refining margin recovery in the future. CVR Energy's diversified business portfolio (refining and fertilizer) may provide a buffer against weakness in specific sectors. In the coming months, investors should monitor Icahn's additional purchases, the company's strategic initiatives, and second-quarter results. Despite strong support from the major shareholder, whether CVR Energy can demonstrate sustained profitability recovery remains a crucial factor to watch.

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