Icahn's stake in Lyft amounted to about 2.7 percent of the ride-hailing company. Though it wasn't clear what price he received for the stake, the investment was worth roughly $550 million at the IPO price, according to the Wall Street Journal, which first reported that he had dumped the stake.
When Icahn first bought his stake four years ago, his take was worth $100 million in the then-private company. At the time of the initial investment, Icahn said he believed that increasing urbanization over the next five-to-ten years should continue the company's revenue growth.
Icahn did not immediately respond to CNBC's request for comment.
Though the stock finished its first session at $78.29, above its IPO price of $72, it was last seen trading at $70.31 after falling nearly 12 percent on Monday. It was worth more than $22 billion when it went public last week, despite the fact that it posted a net loss of nearly $1 billion in 2018.
Lyft declined to comment for this article.
Jonathan Christodoro, a former Icahn Capital managing director, sat on Lyft's board until the company announced his exit last month. Christodoro served at Icahn's investment firm until 2017 and sits on several boards including that of PayPal. His personal stake in Lyft is worth about $900,000.
Though it wasn't immediately clear why Icahn sold his stake, staying invested in the newly public company would have prevent him from trimming his stake for six months after the IPO thanks to pre-determined lockup rules.
Tuesday, the first settlement day for Lyft shares, also attracted a lot of attention from short sellers looking to profit from a shortfall in momentum. Short sellers have borrowed $455 million worth of Lyft shares, or 6.61 million shares, according to IHS Markit.
Sell side analysts have also been skeptical.
Meanwhile, sell side analyst Michael Ward of Seaport Global initiated coverage on the company with a sell rating and a 12-month price target of $42. Guggenheim initiated coverage of the stock with a neutral rating, telling clients that "too many big assumptions" are required to "make a case for the stock. "
This story is developing. Please check back for updates.