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Investor Carl Icahn reveals 'large position' in Apple, advises Tim Cook to buy back more stock [u]

post #1 of 69
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Billionaire investor Carl Icahn spoke with Apple Chief Executive Tim Cook on Tuesday about potentially increasing the company's share buyback program, while also revealing his holding company currently has a "large position" in the iPhone maker.

Icahn


Icahn took to his official Twitter account on Tuesday to tell followers that he believes Apple is "extremely undervalued" at its current share price. He is the majority shareholder of diversified holding company Icahn Enterprises, which had $15.39 billion in revenue in fiscal 2012.

The billionaire also revealed he had a conversation with Apple's CEO on Tuesday, in which Icahn shared his belief that "a larger buyback should be done now." Apple announced plans to boost its quarterly dividend and buy back shares at a cost of $100 billion through 2015.

Icahn said Tuesday that he plans to speak with Cook "again shortly." After his tweets were published, shares of AAPL shot up by more than 4 percent.

Update: After Icahn's comments gained publicity, Apple offered comment to The Wall Street Journal: "We appreciate the interest and investment of all our shareholders. Tim had a very positive conversation with Mr. Icahn today."

Apple spent $16 billion last quarter alone on repurchasing 36 million in shares. The original schedule had called for the company to buy 10 million in shares in the third quarter, but Apple apparently decided to push harder and buy at an average share price of $444.44 ??more than $250 off from the company's high of $702.10 reached last September.

The investor has made headlines in recent weeks for his opposition to Dell's attempts to take the company private. Icahn opened his Twitter account in June with a joke about his ongoing spat with the PC maker: "Twitter is great. I like it almost as much as I like Dell."

While Icahn's feuds with Michael Dell and the Dell Board of Directors are well known, the billionaire's bullish take on Apple wasn't revealed until Tuesday.
post #2 of 69
Of course it's grossly undervalued. Look at Apple's P/E compared to almost anyone else in the tech arena. Then consider who's bringing new ideas and moving the industry forward and try to justify that fact.
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post #3 of 69
Quote:
Originally Posted by jragosta View Post

Of course it's grossly undervalued. Look at Apple's P/E compared to almost anyone else in the tech arena. Then consider who's bringing new ideas and moving the industry forward and try to justify that fact.
What say you Larry Ellison? 1biggrin.gif
post #4 of 69

Icahn is famous for butting heads with CEOs - Watch out Tim!

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post #5 of 69

Just great.  This guy is the last thing Apple needs.

 

Tim should offer to buy back his shares, specifically, so he can take a hike.

post #6 of 69
Ugggh... nothing but a greedy slimey short term stock manpulator/squeeze man. I could imagine if this occurred in the past, Steve would get with Larry E and tell this guy to f'off or they raid all his holdings! Cant ever see Tim doing that. Ok... now its time to say it- Apple is Doomed!
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post #7 of 69

Correct me if I am wrong but if Apple buy back more stock and Icahn holds, wouldn't that eventually make him the largest shareholder by far and give him more control over Apple?

post #8 of 69
CNBC listed some of the stocks he took positions in and they're all up big since he got in.
post #9 of 69

a crap... this is as good as Loeb over at SONY. Tim needs to stand his ground if he needs to just like Kazuo Hirai did.

post #10 of 69
ICahn is a long term value investor whose long term track record, on a total IRR basis, exceeds Warren Buffet's. Google it.

He's turned around many companies and has been in the news a lot over the past year for his involvement with both NetFlix and Dell. He tremendously helped NetFlix's share price performance over the past year and a half after he announced his stake. As someone who wants less focus on Apple's declining share price and more focus on new product innovation, this should be a positive news bit.

Also, he came to Herbalife and its CEO's defense this summer, taking on so called "greedy slimy manipulators". He's not a manipulator, he just knows value when he sees it. I am very happy he announced his stake.
post #11 of 69
Wait a minute...Icahn announces publicly that he has a large position and that he's advised Apple to buy back more stock? Isn't that a manipulation of the market? Based on that announcement (and probably Foxconn's announcement of increased profits), Apple stock is up $20 today. How much did Icahn make in one day based upon his announcement?
post #12 of 69
I would give his statements greater credibility if he first announced his opinion that AAPL is undervalued then started amassing the stock. As it is, he's just another brazen stock manipulator, using his name to move the stock's price in his favor. I wish this sort of shenanigan was illegal.
post #13 of 69

Ha no. He, by law, has to disclose his positions in his 13F filings. The news would have come to light anyway. The fact that he posted it on twitter in no way means he "manipulated" the market. This site throws around "manipulated" way too loosely. The stock moved because people respect him. He thinks the stock's undervalued, other people follow his lead. If I announced tomorrow I bought a stake, that doesn't mean I manipulated the market. That's silly. 

post #14 of 69
Quote:
Originally Posted by NasserAE View Post

Correct me if I am wrong but if Apple buy back more stock and Icahn holds, wouldn't that eventually make him the largest shareholder by far and give him more control over Apple?

The largest shareholder has over $19b invested in Apple. I highly doubt Icahn invested anywhere near that much. He invested $320m in Netflix. He invested in Dell too:

http://business.financialpost.com/2013/08/01/carl-icahn-sues-dell-in-latest-attempt-to-foil-us24-4-billion-buyout/?__lsa=cd79-4685

He can be influential with other shareholders though despite not having a majority share. It doesn't sound like he's investing in Apple in order to enact any changes.
post #15 of 69
Haven't seen a 13D filing involving AAPL in years, which would be required for anyone crossing the threshold of 5% ownership. Apple has such a huge market value (even pre-Icahn) that no single person outside the Sultan of Brunei might even be able to swing it. Doubtful even Bill Gates or Warren Buffet could pony up to that extent.

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post #16 of 69
Quote:
Originally Posted by Creid1987 View Post

Ha no. He, by law, has to disclose his positions in his 13F filings. The news would have come to light anyway. The fact that he posted it on twitter in no way means he "manipulated" the market. This site throws around "manipulated" way too loosely. The stock moved because people respect him. He thinks the stock's undervalued, other people follow his lead. If I announced tomorrow I bought a stake, that doesn't mean I manipulated the market. That's silly. 

 

My do we have an outsized opinion of one's influence!  You can announce all you want about your stock purchases and it would not move the market one iota.  Even if you tried, you won't be able to manipulate the market. 

 

You think Icahn isn't aware that what he says will move the market?  He sure did manipulate the market but he did not break any laws.  

post #17 of 69

Not talking 13D, 13F is just reporting of holdings. 13D is required when you cross 5% threshold. 

 

https://whalewisdom.com/filer/icahn-carl-c-et-al

 

http://www.sec.gov/answers/form13f.htm

post #18 of 69

imo Apple did what it had to do regarding dividends and buybacks.  It should not add more but instead focus on innovation and small acquisitions.

 

I think we just got a "Blue Horseshow Loves Anacott Steel"

post #19 of 69

He bought over $1bn of Apple stock fyi. 

 

Again, you guys are using manipulate in the context of a marketplace too loosely. Connotations matter. 

 

http://en.wikipedia.org/wiki/Market_manipulation

post #20 of 69

Icahn is an amazing investor.  And he usually holds his investments for a while.  This is a great plus for stockholders.  Its almost the equivelant of Buffet buying Apple.

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post #21 of 69
Quote:
Originally Posted by zoetmb View Post

Wait a minute...Icahn announces publicly that he has a large position and that he's advised Apple to buy back more stock? Isn't that a manipulation of the market? Based on that announcement (and probably Foxconn's announcement of increased profits), Apple stock is up $20 today. How much did Icahn make in one day based upon his announcement?
 

Anyone is allowed to publicly acknowledge his/her positions in the market.  The trouble occurs when you secretly let some people in on it so that they can profit to the detriment of others.

 

The fact that publicizing his actions amounts to a self-fulfilling prophecy is more power to him and something he has earned through past successes.  We should all be so lucky.

 

Thompson

post #22 of 69
Quote:
Originally Posted by Creid1987 View Post

He bought over $1bn of Apple stock fyi. 

 

Again, you guys are using manipulate in the context of a marketplace too loosely. Connotations matter. 

 

http://en.wikipedia.org/wiki/Market_manipulation

 

To which source do you attribute the $1 billion figure?

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post #23 of 69
Oh Great. Like Apple did not have enough to worry about, no they have to pacify the iCahn. We shall see if he truly sees long-term value in the company and will be a long-term investor, or if he is just going to try and get Apple to buyback more stock and/or increase its dividend so that he can sell his shares at a higher price within the next few months to a year. My vote right now, based just on his two tweets is the latter.
post #24 of 69
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post #25 of 69
Quote:
Originally Posted by SpamSandwich View Post

 

To which source do you attribute the $1 billion figure?

It doesn't matter.  The previous poster is right.  Carl Icahn can announce his position on Twitter regardless of size.  The fact that it results in a benefit to him is purely a reflection of the respect he has earned.  Like I said earlier, we should all be so lucky.

post #26 of 69
Quote:
Originally Posted by Rogifan View Post

What say you Larry Ellison? 1biggrin.gif

Having Carl invested heavily in Apple is bad especially with him calling to drain Apple's bank that Jobs build up. Carl is famous for making himself rich and destroying companies he invests in. Ellison may be right as Apple rarely used to cater to Wall Street.
post #27 of 69
B
Quote:
Originally Posted by sog35 View Post

Icahn is an amazing investor.  And he usually holds his investments for a while.  This is a great plus for stockholders.  Its almost the equivelant of Buffet buying Apple.

BS. Nothing like Buffet.
post #28 of 69

Is this why AAPL is up almost 5% today? Damn.

post #29 of 69
Quote:
Originally Posted by NasserAE View Post

Correct me if I am wrong but if Apple buy back more stock and Icahn holds, wouldn't that eventually make him the largest shareholder by far and give him more control over Apple?

No. Not by a long shot.

 

Moreover, 'largest' shareholder does not mean much. 

post #30 of 69

Icahn always knows how to insult the rank and file of a corporation. You don't talk to Tim Cook about buying back more stock. Apple's CFO is the man you speak to and the man Tim Cook relies on.

post #31 of 69
Quote:
Originally Posted by TBell View Post


Having Carl invested heavily in Apple is bad especially with him calling to drain Apple's bank that Jobs build up. Carl is famous for making himself rich and destroying companies he invests in. Ellison may be right as Apple rarely used to cater to Wall Street.

 

Correct on both of your comments. Icahn is a drain for any corporation. His near take down of Yahoo ultimately had him cash out and Yahoo has been climbing ever since.

 

Apple already has a strategic plan in place for the next several years. Icahn will dump his shares when APPL reaches between $550-$600.

post #32 of 69
Quote:
Originally Posted by Creid1987 View Post

ICahn is a long term value investor whose long term track record, on a total IRR basis, exceeds Warren Buffet's. Google it.

I realize that a lot of private equity and hedge funds like to use IRR, but it's a fairly useless metric. Also, very easy to manipulate.

post #33 of 69
Quote:
Originally Posted by Marvin View Post

The largest shareholder has over $19b invested in Apple. I highly doubt Icahn invested anywhere near that much. He invested $320m in Netflix. He invested in Dell too:

http://business.financialpost.com/2013/08/01/carl-icahn-sues-dell-in-latest-attempt-to-foil-us24-4-billion-buyout/?__lsa=cd79-4685

He can be influential with other shareholders though despite not having a majority share. It doesn't sound like he's investing in Apple in order to enact any changes.


What are you talking about no changes? He just announced he talked to Cook about spending even more of Apple's cash to buy stock back, which 1) is a big change, and 2) benefits Carl, but perhaps not Apple.
post #34 of 69
Quote:
Originally Posted by mdriftmeyer View Post

Correct on both of your comments. Icahn is a drain for any corporation. His near take down of Yahoo ultimately had him cash out and Yahoo has been climbing ever since.

Apple already has a strategic plan in place for the next several years. Icahn will dump his shares when APPL reaches between $550-$600.

Hmm...I'll save this quote for if/when AAPL get back to that share price.
post #35 of 69
Quote:
Originally Posted by TBell View Post

What are you talking about no changes? He just announced he talked to Cook about spending even more of Apple's cash to buy stock back, which 1) is a big change, and 2) benefits Carl, but perhaps not Apple.

It depends if the emphasis was on the word "now" - "a larger buyback should be done now". He may have meant Apple should buy back more shares in the near term, not buy back more shares than the $60 billion or so. It doesn't make a lot of sense to buyback shares when they are high value, Apple should buy more when they are lower priced and less after it goes up so that it adds more value to the remaining shares.

I take your point that the fact he's talking to Cook indicates he wants to have some influence over their decisions though.
post #36 of 69
Quote:
Originally Posted by TBell View Post

Having Carl invested heavily in Apple is bad especially with him calling to drain Apple's bank that Jobs build up. Carl is famous for making himself rich and destroying companies he invests in. Ellison may be right as Apple rarely used to cater to Wall Street.

So that's why AAPL was up almost 5% today? Becaus the market expects Ichan to destroy Apple? Has he destroyed Netflix?
post #37 of 69
Quote:
Originally Posted by AppleInsider View Post

The billionaire also revealed he had a conversation with Apple's CEO on Tuesday, in which Icahn shared his belief that "a larger buyback should be done now." 

While I am generally fine with the idea of buybacks, I have three issues with the timing now:

 

1) If it involves bringing back the cash stash from abroad, it is tax-inefficient and not worth it;

 

2) The window for really low-cost debt financing may have passed;

 

3) I'd have preferred that Apple used up its buyback quota ($36B, I think?) when the stock was trading between $390 and $450 (if necessary, by doubling the amount of debt they issued). At nearly $500 now and with the stock on a likely upward trajectory (I think that sub-$450 days are now gone for good), Apple's going to be able to get back fewer and fewer shares for the money.

post #38 of 69
Quote:
Originally Posted by Rogifan View Post

So that's why AAPL was up almost 5% today? Becaus the market expects Ichan to destroy Apple? Has he destroyed Netflix?

You're right about that: the stock shot up around 2 PM today when financial media announced the tweet from Icahn. Obviously the market considers this to be massively good news.

 

Maybe we should call him iCahn....lol.gif

post #39 of 69
Quote:
Originally Posted by thompr View Post

It doesn't matter.  The previous poster is right.  Carl Icahn can announce his position on Twitter regardless of size.  The fact that it results in a benefit to him is purely a reflection of the respect he has earned.  Like I said earlier, we should all be so lucky.

 

Sure it matters. It's either being accurately reported (or passed along as fact), or it isn't. So which is it?

Proud AAPL stock owner.

 

GOA

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GOA

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post #40 of 69
Quote:
Originally Posted by herbapou View Post

imo Apple did what it had to do regarding dividends and buybacks.  It should not add more but instead focus on innovation and small acquisitions.

I think we just got a "Blue Horseshow Loves Anacott Steel"

LOL. Exactly.
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