Shares of Cheniere Energy Inc. (LNG – Snapshot Report) rose almost 3% in after-hours trading on the NYSE yesterday, on the announcement that activist investor, Carl Icahn, has boosted his stake in the company.
The billionaire investor now has 22.7 million shares of Cheniere Energy which represents a 9.6% stake. This is higher than his previous holding of 8.2% stake in the company declared this August.
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So what made Carl Icahn raise his share holding in the natural gas exporter that has seen its money being eroded for more than 20 years at a stretch? Also, which fundamentals of the company led the activist investor to believe that Cheniere Energy will grow?
The answer is that although Cheniere Energy is not yet widely known, Carl Icahn is hopeful of this Houston-based firm becoming the first company to export huge amounts of natural gas from the U.S. shale formations by the end of 2015. Cheniere Energy also has contracts from natural gas buyers for a long period of 20 years. Its first cargo should be ready for shipping by the end of this year. Carl Icahn is also encouraged by the company’s plan to construct its second export terminal at Corpus Christi, TX. The huge export facility will likely cost around $16 billion.
