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Carl Icahn and Apple CEO Tim Cook to discuss buyback proposal over dinner in Sept.

post #1 of 36
Thread Starter 
Billionaire investor Carl Icahn, who owns a major stake in Apple, is planning to discuss expanding the company's share buyback program with Chief Executive Tim Cook next month.

Berlin


Icahn revealed in a post to his official Twitter account that he and Cook are planning to meet for dinner in September. He noted that Cook already "believes" in a share buyback, as the company is currently in the process of investing $60 billion in its own stock through 2015.

However, the two parties plan to discuss the "magnitude" of Apple's current buyback plans, Icahn said. He began posting on his account last week about his interest in having Apple invest even more money into its buyback program.

Icahn has said he believes that shares of AAPL are "extremely undervalued" at their current price. His support of the company helped to push Apple past $500 per share last week.

Currently Icahn has about $1.5 billion invested in Apple. On Twitter, he described his stake as a "large position."

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.

Reacting to Icahn's suggestion, Chris Whitmore of Deutsche Bank said this week that he believes Apple could boost its 2014 earnings per share by $4.25 if it were to buy back an additional $50 billion in stock. And Amit Daryanani of RBC Capital Markets said last week he believes Apple could nearly double its $60 billion share buyback program, adding about $4 to 2014 earnings per share.
post #2 of 36
When did 0.3% become a major stake?
post #3 of 36
Quote:
Originally Posted by hydr View Post

When did 0.3% become a major stake?
LOL! I was going to say the same thing, but I didn't feel like doing the math... Glad you are on the ball...
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post #4 of 36
Quote:
Originally Posted by hydr View Post

When did 0.3% become a major stake?

Not Apple, but Icahn. He's worth 20B, 1.6 is indeed a major stake.
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post #5 of 36

Oh… so HE'S the one who won the dinner with Tim Cook!

post #6 of 36

The buyback may or may not make sense, but it's acquiescing to these caterwaulers that makes them (and their kind) screech even more....

 

It bugs the heck out of me that the retail shareholder has little or no say. 1hmm.gif

post #7 of 36
Quote:
Originally Posted by Tallest Skil View Post

Oh… so HE'S the one who won the dinner with Tim Cook!

This could very well be true. He's trying to make it sound like Tim wants to meet him for dinner (we're close like that) but really he just bid up and won the auction. My spidey sense keeps tingling whenever I hear about iCahn.

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post #8 of 36
How is this not stock manipulation? He bought shares, announced it to the world and the stock rocketed up. Now he is going to have dinner with the CEO about increasing the buy back which will further drive the stock price up. I am lost for words.
post #9 of 36
Quote:
Originally Posted by APPLGUY View Post

How is this not stock manipulation? He bought shares, announced it to the world and the stock rocketed up. Now he is going to have dinner with the CEO about increasing the buy back which will further drive the stock price up. I am lost for words.


its not manipulation.  talking to major shareholders is NORMAL.

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post #10 of 36

welcome to the plutocracy... thems with the gold makes the rules.

 

Icahn is self aggrandizing.   But that said,  If he were an 'institution' he'd be number 5, edging out Northern Trust. It's significant.   

 

and if you think the top institutional investors don't call Tim/BoD members and discuss ways to make their investment more lucrative, you are living a fool's folly.  They just don't make it public (they 'leak it' ;-) ).

 

And most of the first $10Billion in stock repurchase was redistributed to employees as compensation...  And keeping stock liquid within in the Apple family is good for a number of reasons.

post #11 of 36
Quote:
Originally Posted by TheOtherGeoff View Post

welcome to the plutocracy... thems with the gold makes the rules.

 

Icahn is self aggrandizing.   But that said,  If he were an 'institution' he'd be number 5, edging out Northern Trust. It's significant.   

 

and if you think the top institutional investors don't call Tim/BoD members and discuss ways to make their investment more lucrative, you are living a fool's folly.  They just don't make it public (they 'leak it' ;-) ).

 

And most of the first $10Billion in stock repurchase was redistributed to employees as compensation...  And keeping stock liquid within in the Apple family is good for a number of reasons.

 

Exactly.  Its actually more fair to the small investor that Icahn makes these meetings public. No insider trading at all. EVERYTHING out in the OPEN is fair for everyone.

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post #12 of 36
Quote:
Originally Posted by sog35 View Post

 

Exactly.  Its actually more fair to the small investor that Icahn makes these meetings public. No insider trading at all. EVERYTHING out in the OPEN is fair for everyone.

 

Tim Cook serves at the discretion of the Apple board of directors so he'll not do anything stupid, like make "Carl" any promises. He'll let him bend his ear, that's about it.

Proud AAPL stock owner.

 

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post #13 of 36

Meeting with that parasite is very stupid!!

post #14 of 36

He owns the shares so...  it's his property.  We can cry about it but if we only have 1/1,000,000 as much Apple stock as he does, our opinion matters about as much as an ant on a pile of cow dung.  If you will.

 

Whether or not Apple buys back its own stock should not move the stock at all.  If it moves up, so much the worse.  That means Apple pisses away more money.  Giving it away to Apple employees is likewise just a leak on the shareholder's wealth.

 

The company hasn't innovated or tried anything brave since Steve died.  They are just trying to manage the iPhone and iPad on their way down.  Mac OS X is already vanishing relevance.  Few apps are developed for it anymore.  I have been a user since OS X 10.1.  And a Mac OS user since System 6.x.  Back then, progress was pretty swift.  It's now 5 years since ANYTHING happened in Mac OS.  10 years since anything major.

 

Daily rant complete.

post #15 of 36
Originally Posted by bwik View Post

The company hasn't innovated or tried anything brave since Steve died.  They are just trying to manage the iPhone and iPad on their way down.  Mac OS X is already vanishing relevance.  Few apps are developed for it anymore.  I have been a user since OS X 10.1.  And a Mac OS user since System 6.x.  Back then, progress was pretty swift.  It's now 5 years since ANYTHING happened in Mac OS.  10 years since anything major.

 

Shut up. You want to spew lies, do it somewhere people care.

post #16 of 36

How fitting that Carl "I"cahn is now eyeing Apple.

 

His current stake may not seem like much but his history suggests he'll find a way to control more shares. There are/will be shareholders who will gladly support his shakedown of Tim Cook. The key is whether the Apple board has the wherewithal to stand up to him.

post #17 of 36
Quote:
Originally Posted by sog35 View Post

Its actually more fair to the small investor that Icahn makes these meetings public. No insider trading at all. EVERYTHING out in the OPEN is fair for everyone.

Insider trading is being able to act on non-public information. The detail that he is having dinner with Tim (presumably Apple's Tim Cook and not some other guy called Tim who is also doing a buyback) is not important but it's what they say to each other over dinner. If Icahn gets any details over the period of time the buyback happens and confirmation on any changes to the size of the buyback then he can execute trades based on that information before the public knows about it. I've no doubt that his bank balance attests to his ability to get away with this sort of thing though. Companies dealing in stocks and shares are always trying to find ways to get their stock values up and the more direct influence the better:

http://www.nytimes.com/2013/08/13/business/us-subpoenas-goldman-in-inquiry-of-aluminum-warehouses.html?_r=1&

It seems his strategy is typically to buy up shares that to some appear to be undervalued, which alone helps boost the trading price (called the Icahn Lift) and then he dumps the shares quickly afterwards for a profit:

http://www.cbsnews.com/video/watch/?id=4336409n

and he harasses CEOs and boards of directors into doing what he wants. I don't think Tim will bend to his will though. If he can put up with Kara Swisher without punching her in the mouth he can deal with Icahn.
post #18 of 36
Icahn and Apple equal more aggressive acquisition of companies... Watch your back Entertainment and other related companies. If Apple comes knocking don't play hardball. Just saying.
post #19 of 36
I'll bet Icahn didn't spend $610 Thousand for dinner with Tim Cook.
post #20 of 36
Quote:
Originally Posted by APPLGUY View Post

How is this not stock manipulation? He bought shares, announced it to the world and the stock rocketed up. Now he is going to have dinner with the CEO about increasing the buy back which will further drive the stock price up. I am lost for words.

It's called exercising his Freedom of Speech. It's only manipulation if he sells his shares right after the announcement. Even en, it's not insider trading because the information is now public.
post #21 of 36
Quote:
Originally Posted by anantksundaram View Post

The buyback may or may not make sense, but it's acquiescing to these caterwaulers that makes them (and their kind) screech even more....

It bugs the heck out of me that the retail shareholder has little or no say. 1hmm.gif
The buy back math seems to work. Even if Apple doesn't add to their buy back plan, they should spend all their planned buy back dollars now, not over 3 years.
post #22 of 36
Quote:
Originally Posted by Marvin View Post

Insider trading is being able to act on non-public information. The detail that he is having dinner with Tim (presumably Apple's Tim Cook and not some other guy called Tim who is also doing a buyback) is not important but it's what they say to each other over dinner. If Icahn gets any details over the period of time the buyback happens and confirmation on any changes to the size of the buyback then he can execute trades based on that information before the public knows about it. I've no doubt that his bank balance attests to his ability to get away with this sort of thing though. Companies dealing in stocks and shares are always trying to find ways to get their stock values up and the more direct influence the better:

http://www.nytimes.com/2013/08/13/business/us-subpoenas-goldman-in-inquiry-of-aluminum-warehouses.html?_r=1&

It seems his strategy is typically to buy up shares that to some appear to be undervalued, which alone helps boost the trading price (called the Icahn Lift) and then he dumps the shares quickly afterwards for a profit:

http://www.cbsnews.com/video/watch/?id=4336409n

and he harasses CEOs and boards of directors into doing what he wants. I don't think Tim will bend to his will though. If he can put up with Kara Swisher without punching her in the mouth he can deal with Icahn.

I literally LOLd for almost a minute.. Listening to Kara, the shill questioners at the end, and even Mossburg, are like nails on a chalkboard. Tim dealt with it exceptionally well, especially at the 2012 all things d (when that sleezy googler tried to call him out on iAd).

   

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post #23 of 36
Quote:
Originally Posted by drblank View Post

I'll bet Icahn didn't spend $610 Thousand for dinner with Tim Cook.

That auction was for coffee with Tim - not dinner.
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post #24 of 36
Quote:
Originally Posted by Everett Ruess View Post

The buy back math seems to work. Even if Apple doesn't add to their buy back plan, they should spend all their planned buy back dollars now, not over 3 years.

They should buy back more earlier but I think increasing the buyback at the request of an outsider who just invested in the company is not the right thing to do. This is outsiders looting the company's cash reserves.

The initial buyback was plenty. Apple should spend its cash on acquiring other companies and associated talent. Depleting cash reserves for the benefit of people who have been investors in the company for a couple of weeks looking for short-term gain does the company no benefit at all.

For much less than the suggested $50b extra, Apple could instead buy Netflix and get its 40 million subscribers, put pay-per-view content on it in addition to the normal business model tied to the iTunes billing details. They can run their keynotes on it and use it as a media platform. First-run DVD releases plus subscribed content. The subscribed content gets people in to watch, when they search for other content, worst case they have to pay a rental fee for a paid movie. They'd offer it via the web to anyone but optimize the app only on iOS and can even offer free subscriptions to iPhone subscribers paying a certain amount.
post #25 of 36
Quote:
Originally Posted by Marvin View Post

They should buy back more earlier but I think increasing the buyback at the request of an outsider who just invested in the company is not the right thing to do. This is outsiders looting the company's cash reserves.

The initial buyback was plenty. Apple should spend its cash on acquiring other companies and associated talent. Depleting cash reserves for the benefit of people who have been investors in the company for a couple of weeks looking for short-term gain does the company no benefit at all.

For much less than the suggested $50b extra, Apple could instead buy Netflix and get its 40 million subscribers, put pay-per-view content on it in addition to the normal business model tied to the iTunes billing details. They can run their keynotes on it and use it as a media platform. First-run DVD releases plus subscribed content. The subscribed content gets people in to watch, when they search for other content, worst case they have to pay a rental fee for a paid movie. They'd offer it via the web to anyone but optimize the app only on iOS and can even offer free subscriptions to iPhone subscribers paying a certain amount.

I totally agree with you.
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post #26 of 36
Quote:
Originally Posted by Marvin View Post

For much less than the suggested $50b extra, Apple could instead buy Netflix and get its 40 million subscribers, put pay-per-view content on it in addition to the normal business model tied to the iTunes billing details. 

Brilliant suggestion. Something like that might be a game-changer.

 

Netflix's market cap is ~$15B. Even thought it is overvalued, despite the premium that would have to be paid, the total cost would be a fraction of $50B. There will be synergies aplenty.

post #27 of 36
Here's the way this will work IMHO. The price will be up quite a bit, when this dinner takes place. Icahn will ask for them to buy back his stake, at the current price, directly from him, instead of the open market. Will make a cool billion or 2, and will still stick Tim with the dinner tab. Totally Legit.
post #28 of 36
Quote:
Originally Posted by digitalclips View Post

I totally agree with you.

As I recall, any sale of Netflix would NOT include their existing studio deals for content. Those deals are non-transferable. So Apple acquiring Netflix would be pointless.

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post #29 of 36
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Originally Posted by SpamSandwich View Post

As I recall, any sale of Netflix would NOT include their existing studio deals for content. Those deals are non-transferable. So Apple acquiring Netflix would be pointless.

Why would the studio deals be cancelled by someone buying up the shares? Icahn himself even started buying up Netflix shares - 10%:

http://news.yahoo.com/netflix-moves-block-hostile-takeover-145250190--finance.html

Lovefilm's studio deals didn't didn't get cancelled when they were bought out by Amazon. It would be pointless buying any company if all the supplier contracts got cancelled as soon as they were bought out.

If Apple can replicate Netflix's business model and can negotiate the same or better deals then they can do the same thing without them but Netflix has some good exclusives. If a significant portion of the 40 million customers are not already Apple customers and they make their software exclusively optimized for iOS, they may be persuaded to buy Apple hardware.

Tom Tom is another company Apple could get. That would replace all those portable Satnavs with iPod Touches, iPhones and iPad Minis.
post #30 of 36
Back to basics. Apple isn't buying back shares for the benefit of anyone except itself. As long as the market price is attractive, they'll buy, because it's a good purpose for cash when it's not needed to run the business and offers better potential for returns than trying to invest it elsewhere. When the share price rises to a certain point, Apple will stop buying simply because it has stopped being a bargain. Icahn certainly factors this into his thinking. It's a good time for him and Apple and other investors at the moment because the shares are still a good buy at $500. But what if the stock shoots to $600 in just the next few months? You can bet that Icahn will stand pat on further purchases and be planning when he might want to start unloading. Think about it. Icahn is never going to command enough resources to control a company the size of Apple. He's carrying weight with the public as an investor with a long and successful track record. In Apple's case he's put his money where his mouth is, and both have lent further credibility to what many have been saying already about Apple being undervalued. It doesn't matter a rat's ass to me whether Icahn is loved or hated. In this case, he's being smart.

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post #31 of 36
Quote:
Originally Posted by Marvin View Post

Why would the studio deals be cancelled by someone buying up the shares? Icahn himself even started buying up Netflix shares - $14b:

http://news.yahoo.com/netflix-moves-block-hostile-takeover-145250190--finance.html

Lovefilm's studio deals didn't didn't get cancelled when they were bought out by Amazon. It would be pointless buying any company if all the supplier contracts got cancelled as soon as they were bought out.

If Apple can replicate Netflix's business model and can negotiate the same or better deals then they can do the same thing without them but Netflix has some good exclusives. If a significant portion of the 40 million customers are not already Apple customers and they make their software exclusively optimized for iOS, they may be persuaded to buy Apple hardware.

Tom Tom is another company Apple could get. That would replace all those portable Satnavs with iPod Touches, iPhones and iPad Minis.

Investing in a company is not the same as buying the company. As I say, if memory serves, these agreements with the studios do not survive the sale of the company (they are non-transferable). This is similar to the situation with MTV, and like MTV it is why Netflix has been developing their own content. They only own the information relating to the viewing habits of their users and their own programming and I suspect they will continue to bolster their own portfolio, conceivably to the point of trying theatrical releases.

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post #32 of 36
Quote:
Originally Posted by SpamSandwich View Post

Investing in a company is not the same as buying the company.

It's the same process. If Apple bought 50% +1 of the voting shares in a company they'd control it. For Netflix right now, that's about $8.1b. They'd have advantages with 100% of the shares and that's what Amazon decided to do with Lovefilm. They had 42% and then bought out the remaining investors to get 100% of the shares:

http://techcrunch.com/2011/01/20/if-amazon-got-lovefilm-at-a-312m-valuation-who-is-buying-the-drinks-tonight-2/

Buying all the shares would allow Apple to do whatever they wanted like bringing it in-house and operating it under the Apple brand. They could alternatively just buy a majority share and control how it's run and sell their stake if it didn't work out but I doubt they'd want to operate it like that because doing things like making it iOS exclusive wouldn't be seen as appropriate for the company and the other shareholders.
Quote:
Originally Posted by SpamSandwich View Post

As I say, if memory serves, these agreements with the studios do not survive the sale of the company (they are non-transferable).

The licensing agreements weren't cancelled when Amazon bought Lovefilm. It doesn't make sense in any circumstance for this to happen. Why would Amazon buy a company that rents out content if they had to renegotiate all the licensing deals, risk not getting them and then losing all the customers they just acquired?
post #33 of 36
Quote:
Originally Posted by SpamSandwich View Post

Investing in a company is not the same as buying the company. As I say, if memory serves, these agreements with the studios do not survive the sale of the company (they are non-transferable). This is similar to the situation with MTV, and like MTV it is why Netflix has been developing their own content. They only own the information relating to the viewing habits of their users and their own programming and I suspect they will continue to bolster their own portfolio, conceivably to the point of trying theatrical releases.

Quote:
Originally Posted by Marvin View Post

It's the same process. If Apple bought 50% +1 of the voting shares in a company they'd control it. For Netflix right now, that's about $8.1b. They'd have advantages with 100% of the shares and that's what Amazon decided to do with Lovefilm. They had 42% and then bought out the remaining investors to get 100% of the shares:

http://techcrunch.com/2011/01/20/if-amazon-got-lovefilm-at-a-312m-valuation-who-is-buying-the-drinks-tonight-2/

Buying all the shares would allow Apple to do whatever they wanted like bringing it in-house and operating it under the Apple brand. They could alternatively just buy a majority share and control how it's run and sell their stake if it didn't work out but I doubt they'd want to operate it like that because doing things like making it iOS exclusive wouldn't be seen as appropriate for the company and the other shareholders.
The licensing agreements weren't cancelled when Amazon bought Lovefilm. It doesn't make sense in any circumstance for this to happen. Why would Amazon buy a company that rents out content if they had to renegotiate all the licensing deals, risk not getting them and then losing all the customers they just acquired?

SInce I doubt that either of you has seen the agreements between Netflix and the content providers, it's pointless to argue about it. An agreement like that can say anything. It might forbid transfer of rights only if all the shares are sold. Or if an entity gets voting control. Or even if greater than x% of the shares are owned by any one entity. Any one of those would be a legal agreement and without seeing the documents, no one here knows which of those is in the agreement (or something entirely different).
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post #34 of 36
Better question is why isn't this considered a "pump and dump" scheme when a major stock holder wants the company to buy back it's stock (thus raising the stock price) only to flip it later and let it sink?
post #35 of 36
Quote:
Originally Posted by sog35 View Post


its not manipulation.  talking to major shareholders is NORMAL.

Is publicly announcing in media releases the specific meetings and what the discussion will be about also normal? I'm not a terrible active investor but it sure sounds kinda like an attempt to manipulate the market.
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post #36 of 36
Sa
Quote:
Originally Posted by digitalclips View Post

I totally agree with you.
Same here Marvin, buying companies, talent & content would be a better investment.
I'd also like to add I'd rather see Apple build a better black box that will make any decent modern TV a smart Apple TV, maybe even offer a TV Box/Mac computer option
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