Bill Ackman questioned the valuation of Carl Icahn's flagship firm as he took another jab at his old rival, whose company has become the target of short-seller Hindenburg Research.

The billionaire investor said in a tweet on Wednesday that he was "fascinated" by the situation between the short seller and Icahn Enterprises, while noting that the company's premium had been sustained by a large dividend yield.

"The yield is generated by returning capital to outside shareholders, which is in turn funded by the company selling stock to investors," Ackman said, adding the system is highly dependent on the "maintenance of the premium and the placidity of Icahn's margin lender(s)".

A representative for Icahn was not immediately available for comment. Bill Ackman declined to comment beyond his tweet.

In its report, Hindenburg has accused IEP of overvaluing its holdings and relying on a "Ponzi-like" structure to pay dividends. Icahn has called Hindenburg's report "self-serving" and reiterated his defense of the company.

Shares in IEP have lost more than half their value so far this year. The stock was down another 0.3% in extended trading.

On May 10, IEP said it was contacted by U.S. prosecutors, and it posted a surprise quarterly loss in the first quarter.

Icahn locked horns with Ackman over the supplement company Herbalife in early 2013 by taking the opposite side of the trade, in what was dubbed at the time as "the battle of the billionaires".

"IEP's performance history and governance structure do not justify a premium; rather they suggest that a large discount to net asset value would be appropriate," Ackman said, adding he was neither long nor short on the stock.

(Reporting by Manya Saini in Bengaluru; Editing by Anil D'Silva)