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Investor Carl Icahn reveals 'large position' in Apple, advises Tim Cook to buy back more stock [u] - Page 2

post #41 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?

He has not had time to destroy Netflix because as soon as he announced his purchase Netflix implemented a poison pill change to its corporate governance rules. This was designed to prevent Carl from interfering with the governance of Netflix. Carl might have given Netflix a short stock boost, but Netflix also has been performing well to which he gets zero credit as he does not hold a board seat.

Short term investors like Carl because he can often influence short term changes that are good for some of those short term investors, but he does not care about the long term health of the company. He tried to get Yahoo to sell itself to Microsoft. This nearly destroyed the company. He meddled with Chrysler as well.
post #42 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?

No it is because short term investors are hoping Carl can convince Apple to spend its rainy day fund by borrowing more money to buy back its own stock at an accelerated pace. He wants to profit from the Apple buying back the stock he has at a higher price.
post #43 of 69
Quote:
Originally Posted by anantksundaram View Post

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.

 

Regarding point number 2, Apple cannot and will not "repatriate" that overseas cash. They would be sued.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #44 of 69
Quote:
Originally Posted by SpamSandwich View Post

Regarding point number 2, Apple cannot and will not "repatriate" that overseas cash. They would be sued.

Really? On what basis?

It's Apple's cash to use as the BOD and management team see fit.

Now, they might get asked a lot of questions at the annual meeting and shareholders might even vote for different directors, but I don't see the basis for any lawsuit.
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Gatorguy 5/31/13
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Gatorguy 5/31/13
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post #45 of 69
Quote:
Originally Posted by SpamSandwich View Post

Regarding point number 2, Apple cannot and will not "repatriate" that overseas cash. They would be sued.

Sued? By whom, for what? And using what argument?

 

Not that Cook would do something like that, but if it's shareholders -- even an Icahn-type -- you had in mind, they cannot second-guess a management decision that abided by standard US corporate governance rules of 'business judgment' (http://lawbrain.com/wiki/Business_Judgment_Rule).

 

(PS: I think you meant Point #1?)

post #46 of 69
Quote:
Originally Posted by anantksundaram View Post

Sued? By whom, for what? And using what argument?

 

Not that Cook would do something like that, but if it's shareholders -- even an Icahn-type -- you had in mind, they cannot second-guess a management decision that abided by standard US corporate governance rules of 'business judgment' (http://lawbrain.com/wiki/Business_Judgment_Rule).

 

(PS: I think you meant Point #1?)

 

Yes, I meant point #1.

 

Apple would be sued by shareholders for using their cash in a "tax-foolish" way. Repatriating the cash would force them to incur a massive hit that they currently avoid. They would be negligent by bringing it back into the US.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #47 of 69
Icahn is a PARASITE! HE IS ALL, THAT IS WRONG IN AMERICAN FINANCIAL BUSINESS TODAY!
post #48 of 69
Quote:
Originally Posted by Danox View Post

Icahn is a PARASITE! HE IS ALL, THAT IS WRONG IN AMERICAN FINANCIAL BUSINESS TODAY!

 

"Parasite" or not, he's free to invest wherever he wants! THAT is the nature of business.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #49 of 69
Apple has been rudderless and adrift since Tim Cook lost Steve Job's guidance and counsel. Tim Cook can learn sorely needed business and finance lessons conferring with the likes of Carl Icahn. Best news in months! Breaks the monotony of killing time until Apple next scheduled product dump.
post #50 of 69

https://twitter.com/sarahfrier/status/367362878401024001?source=email_rt_mc_body

 

Re Icahn's stake above $1bn. 

post #51 of 69
Quote:
Originally Posted by SpamSandwich View Post

Quote:
Originally Posted by anantksundaram View Post

Sued? By whom, for what? And using what argument?

Not that Cook would do something like that, but if it's shareholders -- even an Icahn-type -- you had in mind, they cannot second-guess a management decision that abided by standard US corporate governance rules of 'business judgment' (http://lawbrain.com/wiki/Business_Judgment_Rule).

(PS: I think you meant Point #1?)

Yes, I meant point #1.

Apple would be sued by shareholders for using their cash in a "tax-foolish" way. Repatriating the cash would force them to incur a massive hit that they currently avoid. They would be negligent by bringing it back into the US.

Such a suit would be a non-starter.
post #52 of 69
Quote:
Originally Posted by Creid1987 View Post

https://twitter.com/sarahfrier/status/367362878401024001?source=email_rt_mc_body

Re Icahn's stake above $1bn. 

Woohooooo! All he has to do is quadruple his purchases and he will own 1% of Apple. His position may be large for him, but it represents only a small portion of Apple.
post #53 of 69
Quote:
Originally Posted by MJ Web View Post

Apple has been rudderless and adrift since Tim Cook lost Steve Job's guidance and counsel. Tim Cook can learn sorely needed business and finance lessons conferring with the likes of Carl Icahn. Best news in months! Breaks the monotony of killing time until Apple next scheduled product dump.

Groan.....
post #54 of 69
Quote:
Originally Posted by anantksundaram View Post


Such a suit would be a non-starter.

 

No it wouldn't. Apple is obligated to maximize returns for shareholders. Foolishly throwing away money would make them liable.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #55 of 69

I'm generally guessing, the nature of supply and demand, wouldn't the stock price rise as a result of someone buying that much stock? Of course not by this much (says +22 on the ticker), I think generally people are buying AAPL in anticipation of Sept 10 in hopes to make a quick buck, which they will, and as they sell, the stock price will go down right?

post #56 of 69
Quote:
Originally Posted by murman View Post

I'm generally guessing, the nature of supply and demand, wouldn't the stock price rise as a result of someone buying that much stock? Of course not by this much (says +22 on the ticker), I think generally people are buying AAPL in anticipation of Sept 10 in hopes to make a quick buck, which they will, and as they sell, the stock price will go down right?

Stop for a minute and think this through. In the last quarter, Apple has bought back $16 billion of its own shares and the market price hardly budged. Icahn's holdings may top $1 billion, according to one estimate aired by Bloomberg. Compared to Apple's repurchase program, Icahn's purchases have about as much effect on supply and demand as an ant crawling up an elephant's leg with rape on its mind. It's Icahn's mouth and reputation driving the jump in today's share price, nothing more.

I admit to being a Fanatical Moderate. I Disdain the Inane. Vyizderzominymororzizazizdenderizorziz?

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I admit to being a Fanatical Moderate. I Disdain the Inane. Vyizderzominymororzizazizdenderizorziz?

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post #57 of 69

Originally Posted by MJ Web View Post
Apple has been rudderless and adrift since Tim Cook lost Steve Job's guidance and counsel. Tim Cook can learn sorely needed business and finance lessons conferring with the likes of Carl Icahn. Best news in months! Breaks the monotony of killing time until Apple next scheduled product dump.

 

MAN that sarcasm is thick. Good one.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

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Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

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post #58 of 69
Quote:
Originally Posted by murman View Post

I'm generally guessing, the nature of supply and demand, wouldn't the stock price rise as a result of someone buying that much stock? Of course not by this much (says +22 on the ticker), I think generally people are buying AAPL in anticipation of Sept 10 in hopes to make a quick buck, which they will, and as they sell, the stock price will go down right?

I think both of your reasons are contributing to the price rise. Also, when a famous 'corporate activist' publicizes taking a large position, it strongly motivates short sellers to buy shares and close out their positions, rather than risk getting steamrolled by a quick change in the psychology of the market with regard to AAPL. There are also a significant number of people who just follow in the wake of people like Icahn and Buffett and imitate their portfolio moves. The volume in AAPL was almost three times normal today. Concerning when or if people will sell, best of luck to anyone who tries to time that event.
post #59 of 69
Quote:
Originally Posted by Tallest Skil View Post

 

MAN that sarcasm is thick. Good one.

Been saving it up for some good news -- as in outside help.For once we can agree. 

post #60 of 69
Quote:
Originally Posted by Kibitzer View Post

Stop for a minute and think this through. In the last quarter, Apple has bought back $16 billion of its own shares and the market price hardly budged. Icahn's holdings may top $1 billion, according to one estimate aired by Bloomberg. Compared to Apple's repurchase program, Icahn's purchases have about as much effect on supply and demand as an ant crawling up an elephant's leg with rape on its mind. It's Icahn's mouth and reputation driving the jump in today's share price, nothing more.

That's largely true. It's mostly about psychology. However, note that there is also a difference in the share purchases in that Apple's shares are being taken out of the market. Icahn's purchases could be sold tomorrow, so they're still marketable shares. Therefore, Apple's share purchases SHOULD have an even larger impact if you look at it purely based on the numbers.

But there's a difference in timing, too. Apple's shares were purchased quietly and presumably a lot of them were purchased while the share price was stagnant or falling. Icahn purchased his when the shares were already climbing - which adds to the impact of his purchase.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
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post #61 of 69
All that matters to me is Ichan said Apple was undervalued. He's absolutely correct there. I guess I have a bit more faith in Cook and the board than others do. If Cook was really making decisions based on the stock, based on what Wall Street wants would we have gone almost a year without any new product launches? 1hmm.gif
post #62 of 69
Quote:
Originally Posted by SpamSandwich View Post


No it wouldn't. Apple is obligated to maximize returns for shareholders. Foolishly throwing away money would make them liable.

Yes it would. Management can easily argue that the NPV of what they plan to do with the repatriated funds is greater than the value of the tax loss. You do not and and will not have the ability to second guess that as an investor if Apple's board goes along.

If managers were sued for stuff like this, they will not be able to do a thing. You might as well handcuff them. That's the reason courts won't allow that type of frivolity.
post #63 of 69
Quote:
Originally Posted by anantksundaram View Post

Yes it would. Management can easily argue that the NPV of what they plan to do with the repatriated funds is greater than the value of the tax loss. You do not and and will not have the ability to second guess that as an investor if Apple's board goes along.

If managers were sued for stuff like this, they will not be able to do a thing. You might as well handcuff them. That's the reason courts won't allow that type of frivolity.

It wouldn't be that hard to make that argument. First, the tax loss exists, anyway. If they EVER plan to use that money in the U.S. (for dividends, acquisitions, etc), then the taxes need to be paid. So using it for dividends doesn't change anything. Second, Apple's P/E is less than half of what it should be based on the rest of the market, so a 30% tax loss to buy back shares isn't an unreasonable hit.

Most importantly, though, you are absolutely correct. This falls well in line with reasonable management discretion and a court wouldn't second guess it. Since the board has already authorized share buybacks, it's simply not an issue.

Besides, they wouldn't have to repatriate money, anyway, since they also got approval for a bond sale if necessary.
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Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
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post #64 of 69
BTW, shares are showing another nice gain this morning. They're pushing toward 500.
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Gatorguy 5/31/13
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post #65 of 69
Quote:
Originally Posted by jragosta View Post

BTW, shares are showing another nice gain this morning. They're pushing toward 500.

Isn't that a nice change.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #66 of 69
This is even worse than the obsession with British royalty.
post #67 of 69
Quote:
Originally Posted by dysamoria View Post

This is even worse than the obsession with British royalty.

Quite right. Ha!

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #68 of 69
Quote:
Originally Posted by Rogifan View Post

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

Ellison is just projecting. He hopes the day he leaves Oracle it collapses.
post #69 of 69
In other news, Carl Icahn announced that his investment vehicle has been renamed iCahn.
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