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ISS recommends against Icahn stock buyback strategy, sides with Apple board

post #1 of 72
Thread Starter 
Well-known proxy advisory firm Institutional Shareholder Services on Sunday released a report recommending AAPL shareholders vote against a proposal from activist investor Carl Icahn, who wants Apple to repurchase $50 billion worth of stock.

Icahn
Activist investor Carl Icahn. | Source: Forbes


Ahead of Apple's annual shareholders meeting coming up at the end of February, influential proxy firm ISS has issued a report suggesting against Icahn's proposed $50 billion stock buyback, reports The Wall Street Journal.

From the ISS report:

"Shareholders may wish to support the current proposal, at least in part, to signal to the board their sense of urgency about the lack of resolution on this issue of excess cash. At the same time, however, the board has taken clear and strong measures in the past two years--including establishing (and then increasing) a significant dividend, authorizing (and then increasing) a sizable share buyback, and creating a cadence of annual communication to investors about additional measures it will take."



The statement echoes one from Apple's own board of directors, which recommended against the proposal in a proxy statement issued in December, saying the company is considering its options for returning cash to investors.

Icahn has long taken a strong stance on the AAPL buyback after revealing a "large position" in the company last August. Since then, the billionaire investors has pushed hard for a buyback, going so far as to meet with CEO Tim Cook to discuss the topic. Most recently, Icahn telegraphed his intentions to raise the issue at the upcoming shareholders meeting.

The ISS was not entirely complimentary of Apple's plans, however, as the firm noted Cupertino needs a more comprehensive long-term strategy for its growing cash hoard. At the end of fiscal 2013, Apple's cash pile reached $148.6 billion, $35.5 billion of which was held in the U.S. In the intervening weeks, that number has grown to more than $159 billion.

For its part, Apple has been aggressive with its current repurchase plan. CEO Tim Cook revealed last week that Apple bought back $14 billion of its own stock over the two-week period following the company's latest earnings call. Apple is sticking to a $100 billion buyback scheduled for completion in 2015.

"It means that we are betting on Apple. It means that we are really confident on what we are doing and what we plan to do," Cook said at the time. "We're not just saying that. We're showing that with our actions."
post #2 of 72
Ichan got what he wished. With $14B bought back this year and $40B total is a given that Apple will increase the total buyback beyond $60B
post #3 of 72
Support the interest of long term shareholders, not the short-term shareholder, not the day trader.

Vote negative and tell iCahn 'iCan't'.

By the way, it appears a billion dollars can't buy you a decent haircut.


Edited by GTR - 2/10/14 at 12:17am
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post #4 of 72
Now others besides Apple and many of us are saying no to Icahn. I wonder what the Carl-acolytes have to say.
post #5 of 72

And a tear fell from Carl's eye.... aaaaaaand 'scene'.

Proud AAPL stock owner.

 

GOA

Reply

Proud AAPL stock owner.

 

GOA

Reply
post #6 of 72
Questionably morality and the number one question is how this can be avoided by law. Investor finds a company that is affluent in cash, buys a large portion of it (not large in percentage but if we're speaking a few billion it raises eye brows). Of course everyone knows why Icahn is doing this: To drive up the share price and sell when it's there.

So what can be done to outlaw this behaviour? Anyone with deep pockets can do this.

I'm just happy for now that the originally allocated buyback funds aren't entirely spent yet, so even though Apple bought stock back earlier than anticipated, lets say it was good enough an opportunity to do so. I do hope that they think twice to increase the amount of the buyback program.

So far, of course it plays into Icahns hands as people would think he's the one who's steering AAPL now. Not that the buyback plan was announced in 2012 when Icahn (if at all) held little shares.
post #7 of 72

I know nothing about stocks or investing, but I've long been confused about why this Icahn guy is being treated any more special than the millions of other Apple investors out there. It sounds like he just likes being heard.

post #8 of 72

I can't remember anytime that ISS has ever sided with an activist investor.  Hardly news...

post #9 of 72
Quote:
Originally Posted by Sporlo View Post

I know nothing about stocks or investing, but I've long been confused about why this Icahn guy is being treated any more special than the millions of other Apple investors out there. It sounds like he just likes being heard.

One of the richest men in the world, a self made billionaire.
He is averaging an annualized return over 20% the last 10 years.
Simply one of the best in the biz. Period.
post #10 of 72
i would to like see apple buy back in there own timetable and there be no room for short term investors like Icahn,He's doing what's good for he's business and apple needs to do what's good for apple.
post #11 of 72
Quote:
Originally Posted by sog35 View Post


One of the richest men in the world, a self made billionaire.
He is averaging an annualized return over 20% the last 10 years.
Simply one of the best in the biz. Period.

Is he good at making other people money too? (not that he has to, but I'm just curious if he's in the business of selling his expertise too)

post #12 of 72
No, Carl only works for himself, to increase his own personal worth. He doesn't care about anything or anyone else.
 
Heck, he has a well-established reputation of buying companies only to tear them apart. He doesn't build: he destroys.
 
Carl is a complete a-hole. He got shafted when he tried to use his Yahoo investment as an ATM; I'm glad he got spanked on that one. Everytime Carl loses money is a good day for the world.
 
I don't care how much he's made. I'd never want to earn money the way he has. He is one of the scummiest investors on the planet.

Edited by mpantone - 2/9/14 at 7:33pm
post #13 of 72
Quote:
Originally Posted by sog35 View Post


One of the richest men in the world, a self made billionaire.
He is averaging an annualized return over 20% the last 10 years.
Simply one of the best in the biz. Period.

 

 

once you get to a certain point of fame, it just doesn't even make sense to give him credit any more. Any stock that he buys into will go up just because he announced he bought into it. Ive averaged 27% in the past 5 years and I'm not going out and telling apple what to do with their money... Must be nice to have a few billion dollars and some limelight.

post #14 of 72
Quote:
Originally Posted by Sporlo View Post

Is he good at making other people money too? (not that he has to, but I'm just curious if he's in the business of selling his expertise too)

Yes he has a full blown investment firm and hedge fund
post #15 of 72
Quote:
Originally Posted by justp1ayin View Post


once you get to a certain point of fame, it just doesn't even make sense to give him credit any more. Any stock that he buys into will go up just because he announced he bought into it. Ive averaged 27% in the past 5 years and I'm not going out and telling apple what to do with their money... Must be nice to have a few billion dollars and some limelight.

Last five years has been a bull market.
Also big difference between managing thousands of dollars compared to the billions Ichan manages
post #16 of 72
Quote:
Originally Posted by sog35 View Post


Last five years has been a bull market.
Also big difference between managing thousands of dollars compared to the billions Ichan manages

 

Well you'd have to average out the good with the bad if you're counting his 10 right?

 

Anyways the point is, I can't go on twitter and make a stock go up by sending out a tweet, he can... Its pretty much an unlimited money trick.

 

I need a few extra million? Let me tweet I bought into a company and a bunch of people will make the stock price rise...

 

How could he not be making 20%? I see that as a little low for him actually

post #17 of 72
Quote:
Originally Posted by sog35 View Post

Quote:
Originally Posted by Sporlo View Post

I know nothing about stocks or investing, but I've long been confused about why this Icahn guy is being treated any more special than the millions of other Apple investors out there. It sounds like he just likes being heard.

One of the richest men in the world, a self made billionaire.
He is averaging an annualized return over 20% the last 10 years.
Simply one of the best in the biz. Period.

You bring this up a lot, and are clearly a fan of Icahn.

Can you please point to a credible, audited set of data that has been filed with some regulatory authority -- under the pain major penalties for lying -- that backs up this claim?
post #18 of 72
Icahn looking out for his pocket more than Apples well being. Hopefully the shareholders will realize that Icahns views will only benefit Apple in the short term. Tim Cook is a smart guy if he didn't have some good things in the pipeline he himself would do what's neccessay
post #19 of 72
Quote:
Originally Posted by BUSHMAN4 View Post

Icahn looking out for his pocket more than Apples well being. Hopefully the shareholders will realize that Icahns views will only benefit Apple in the short term. Tim Cook is a smart guy if he didn't have some good things in the pipeline he himself would do what's neccessay
Look at all the usual Apple bashers like CNBC and other media types who usually Nashe Apple , they all hate the buy back, Should that not tell you something? Icahn got involved with Netflix when it was 60, now 18 months later, it's at 400. Who long term netflix holders rather the stock at 60? The notion that somehow supporting Icahn who thinks Apple is under valued and wants to buy back is somehow bad for long term shareholders is stupid to the core
post #20 of 72
Quote:
Originally Posted by Sporlo View Post
 

I know nothing about stocks or investing, but I've long been confused about why this Icahn guy is being treated any more special than the millions of other Apple investors out there. It sounds like he just likes being heard.

He has bought more than $3.5 billion dollars' worth of shares in the company, so he owns a decent chunk of it. A bit less than 1%, but if my math and data are right, that's still a lot more than, say, Tim Cook (a little over $45 million). Since he is also widely regarded as a shrewd investor, his advice regarding how Apple should invest its (and partly "his") money carries some weight.

 

http://www.cnbc.com/id/101359319

http://finance.yahoo.com/q/mh?s=AAPL+Major+Holders

post #21 of 72
Quote:
Originally Posted by castcore View Post


Look at all the usual Apple bashers like CNBC and other media types who usually Nashe Apple , they all hate the buy back, Should that not tell you something? Icahn got involved with Netflix when it was 60, now 18 months later, it's at 400. Who long term netflix holders rather the stock at 60? The notion that somehow supporting Icahn who thinks Apple is under valued and wants to buy back is somehow bad for long term shareholders is stupid to the core

 

 

Quote:
Originally Posted by Retrogusto View Post
 

He has bought more than $3.5 billion dollars' worth of shares in the company, so he owns a decent chunk of it. A bit less than 1%, but if my math and data are right, that's still a lot more than, say, Tim Cook (a little over $45 million). Since he is also widely regarded as a shrewd investor, his advice regarding how Apple should invest its (and partly "his") money carries some weight.

 

http://www.cnbc.com/id/101359319

http://finance.yahoo.com/q/mh?s=AAPL+Major+Holders

 

 

No one is debating that this guy is a successful investor, but investors don't give a shit about the actual company, only the stock price. Most of us joined the forum because we are fans of apple products, regardless of stock price. That being said, id rather sit back and see what plan apple has in store with its product pipeline, even if I am holding shares.

post #22 of 72
Quote:
Originally Posted by castcore View Post

Look at all the usual Apple bashers like CNBC and other media types who usually Nashe Apple , they all hate the buy back, Should that not tell you something? Icahn got involved with Netflix when it was 60, now 18 months later, it's at 400. Who long term netflix holders rather the stock at 60? The notion that somehow supporting Icahn who thinks Apple is under valued and wants to buy back is somehow bad for long term shareholders is stupid to the core

While I think Icahn had a bit of influence, the fact is that he isn't still holding a major position in Netflix. Netflix being as high as it is right now is because of the performance of the company. They had a huge misstep when they tried to separate DVD and streaming, but they reeled it back in, brought out some quality original programming, expanded the number of places you can watch Netflix and more important than all of that, they increased their subscriber base and revenue. To think Icahn had a long term impact on the stock, isn't looking at Netflix as a business and giving Icahn too much credit.
post #23 of 72
Quote:
Originally Posted by foad View Post

While I think Icahn had a bit of influence, the fact is that he isn't still holding a major position in Netflix. Netflix being as high as it is right now is because of the performance of the company. They had a huge misstep when they tried to separate DVD and streaming, but they reeled it back in, brought out some quality original programming, expanded the number of places you can watch Netflix and more important than all of that, they increased their subscriber base and revenue. To think Icahn had a long term impact on the stock, isn't looking at Netflix as a business and giving Icahn too much credit.

You are joking right? Icahn soldnhisbposirion at 350 but bought into nflx huge at 70. Nflx CEO Hastings braced him and took icahns advice. You are joking right about not knowing what he did for nflx?
post #24 of 72
Quote:
Originally Posted by castcore View Post

You are joking right? Icahn soldnhisbposirion at 350 but bought into nflx huge at 70. Nflx CEO Hastings braced him and took icahns advice. You are joking right about not knowing what he did for nflx?

Just looked it up Icahn held 10% of netflix at $70 and now still hold 4.5%. He was the largest single holder of nflx
post #25 of 72
And the fact is Apple board led by Al Gore does not have the financial acumen to deal with Wall Street 2014 and they need that in today media to protect shareholders
post #26 of 72
Quote:
Originally Posted by castcore View Post

You are joking right? Icahn soldnhisbposirion at 350 but bought into nflx huge at 70. Nflx CEO Hastings braced him and took icahns advice. You are joking right about not knowing what he did for nflx?

It wasn't Icahn's investment that propelled the stock so high. Hell Icahn wasn't even the main proponent of Icahn Enterprises investing - it was his son. Netflix, especially at first, was not happy about his investing. That is why they adopted the poison pill. Netflix's stock wasn't propelled over 500% because of Icahn. You are vastly discrediting what Netflix has done as a business by stating that Icahn had such a massive influence.
post #27 of 72

I think Apple should offer an incremental dividend increase program that will keep long term investors longer and attract institutional investors. This has been talked about on cnbc and some articles, but I haven't heard much about it for a while.

post #28 of 72
Icahn is not wrong and his request is not unreasonable. Unfortunately he does not have Apple's long term interest at heart.
post #29 of 72
Quote:
Originally Posted by castcore View Post

Look at all the usual Apple bashers like CNBC and other media types who usually Nashe Apple , they all hate the buy back, Should that not tell you something? Icahn got involved with Netflix when it was 60, now 18 months later, it's at 400. Who long term netflix holders rather the stock at 60? The notion that somehow supporting Icahn who thinks Apple is under valued and wants to buy back is somehow bad for long term shareholders is stupid to the core
That's overlooking when it crashed from like 300 to 60. Bears like to eat short-term traders for breakfast.

There's few facts in play. US stocks are heavily manipulated by hedge funds and investment banks. They knowingly rob the retail investors (that's you and me) by doing the kind of things Icahn does behind closed doors. It doesn't count as insider trading when you bully the traded company into doing your bidding.

Icahn can grow up, take his ball and go home if Apple doesn't do what he wants it to do. I want to see him promise apple in writing to not sell his stock in Apple for 15 years if he really believes in Apple. Hell I'd like to see all investment banks and hedge funds make that kind of pledge. These short term flips just make me wonder why anyone would ever hold a US companies stock when it will just be manipulated into bankruptcy by holding onto the debt used to make the buybacks/pay out dividends, and then sold for parts.
post #30 of 72
Quote:
Originally Posted by GTR View Post

Support the interest of long term shareholders, not the short-term shareholder, not the day trader.

Vote negative and tell iCahn 'iCan't'.

By the way, it appears a billion dollars can't buy you a decent haircut.

 

Looks like maybe he had a large holding 20 yrs ago in the "FlowBee"!

 

 

Takes a while to get use to these modern gizmos. /s


Edited by Damn_Its_Hot - 2/10/14 at 4:52am
post #31 of 72
Quote:
Originally Posted by shard View Post

Icahn is not wrong and his request is not unreasonable. Unfortunately he does not have Apple's long term interest at heart.

Can you show us why/how it's not unreasonable?
post #32 of 72
Quote:
Originally Posted by anantksundaram View Post

Quote:
Originally Posted by sog35 View Post

Quote:
Originally Posted by Sporlo View Post

I know nothing about stocks or investing, but I've long been confused about why this Icahn guy is being treated any more special than the millions of other Apple investors out there. It sounds like he just likes being heard.

One of the richest men in the world, a self made billionaire.
He is averaging an annualized return over 20% the last 10 years.
Simply one of the best in the biz. Period.

You bring this up a lot, and are clearly a fan of Icahn.

Can you please point to a credible, audited set of data that has been filed with some regulatory authority -- under the pain major penalties for lying -- that backs up this claim?

Quote:
Originally Posted by anantksundaram View Post

Quote:
Originally Posted by shard View Post

Icahn is not wrong and his request is not unreasonable. Unfortunately he does not have Apple's long term interest at heart.

Can you show us why/how it's not unreasonable?

I never seem to get a reply to these questions from the Icahn-ites. :-/
post #33 of 72
Quote:
Originally Posted by sog35 View Post


One of the richest men in the world, a self made billionaire.
He is averaging an annualized return over 20% the last 10 years.
Simply one of the best in the biz. Period.

 

He might be one of the richest people in the world, but nobody is entirely self made. With that said, he also is not anybody I would want to aspire to. The question for many should be what is he simply the best at? 

 

He made his money in the eighties as a corporate raider. He would take on debt to buy a controlling interest in a company. He would then place his own directors on the board. He then would have company he took a controlling interest in take on his debt that he used to buy the controlling interest, and he would then strip the company of its most valuable assets. That is not investing in the traditional way people think of investing. He hasn't made his money "investing" in companies he believes in like somebody like Buffet has done. Icahn is a get in quick, take what he can, and get out fast type of guy, and leave others to deal with the rubble. What he does is not investing.

 

He forced TWA to file bankruptcy after making over $450 million himself, and saddling the airlines with as much in debt. He wanted to break apart Time Warner, after forcing it to buy back shares. He tried to force Yahoo to sell itself to Microsoft. He also was a director at Blockbuster, which we can see how that went.

 

For long term Apple investors, Icahn is not a friend. Like Netflix, Apple should ignore him entirely.  

post #34 of 72
Quote:
Originally Posted by anantksundaram View Post


You bring this up a lot, and are clearly a fan of Icahn.

Can you please point to a credible, audited set of data that has been filed with some regulatory authority -- under the pain major penalties for lying -- that backs up this claim?

 

Credible source?  Ok.

 

I give you Ichan Enterprises LP - which is publicly traded and audited by the SEC.

http://finance.yahoo.com/q/hp?s=IEP+Historical+Prices

 

On Jan 2004 it was $16.

On Dec 2013 it was $117.

Thats a 631% return in 10 years.

22% annualized return in 10 years.

The man kicks azz in the stock market. PERIOD.

post #35 of 72
Quote:
Originally Posted by TBell View Post
 

 

He might be one of the richest people in the world, but nobody is entirely self made. With that said, he also is not anybody I would want to aspire to. The question for many should be what is he simply the best at? 

 

He made his money in the eighties as a corporate raider. He would take on debt to buy a controlling interest in a company. He would then place his own directors on the board. He then would have company he took a controlling interest in take on his debt that he used to buy the controlling interest, and he would then strip the company of its most valuable assets. That is not investing in the traditional way people think of investing. He hasn't made his money "investing" in companies he believes in like somebody like Buffet has done. Icahn is a get in quick, take what he can, and get out fast type of guy, and leave others to deal with the rubble. What he does is not investing.

 

He forced TWA to file bankruptcy after making over $450 million himself, and saddling the airlines with as much in debt. He wanted to break apart Time Warner, after forcing it to buy back shares. He tried to force Yahoo to sell itself to Microsoft. He also was a director at Blockbuster, which we can see how that went.

 

For long term Apple investors, Icahn is not a friend. Like Netflix, Apple should ignore him entirely.  

 

All the airlines were F'uped in the 80's.  They were all going to go bankrupt because of stupid business decisions.

 

Ichan Enterprises LLP has a return of 631% over the last 10 years (2004-2013).

To say he doesn't know the stockmarket is idiotic.

post #36 of 72
Quote:
Originally Posted by justp1ayin View Post
 

 

Well you'd have to average out the good with the bad if you're counting his 10 right?

 

Anyways the point is, I can't go on twitter and make a stock go up by sending out a tweet, he can... Its pretty much an unlimited money trick.

 

I need a few extra million? Let me tweet I bought into a company and a bunch of people will make the stock price rise...

 

How could he not be making 20%? I see that as a little low for him actually

 

20% is ridiculously good for the last 10 years considering the major crash in 2007-2009

 

When you prove yourself as an investment genius for 40+ years and make your clients BILLIONS of dollars then you will get the benefit of the doubt like Ichan.  Till then stop crying like a baby that he gets the praise he deserves and worked hard to achieve.

 

And its not like all his investments automatically become golden because he buys them and makes it known.  DELL did not do much.

 

Some of you are plain ridiculous.  You guys always cry fowl and bitch and moan when the media bashes Apple or when certain investors and analysis say Apple is in trouble and is going down.  Yet when someone is trying to support the stock like Ichan you guys tell him to get lost.  Without vocal supporters like Ichan and Einhorn the stock would be much lower today.  My guess is without the vocal proading of Einhorn we would not have had the $60B buyback in the first place.

post #37 of 72
Quote:
Originally Posted by castcore View Post


You are joking right? Icahn soldnhisbposirion at 350 but bought into nflx huge at 70. Nflx CEO Hastings braced him and took icahns advice. You are joking right about not knowing what he did for nflx?

Do you even know what you are talking about? I would love to know what advice Icahn gave Netflix. Now back to reality.

 

Netflix wanted nothing to do with Icahn. Right after he started buying shares, Netflix's Board of Directors adopted a poison pill resolution to prevent Icahn from gaining any control of the company. 

 

Icahn's big plan? He wanted Netflix to put itself on the market. Netflix wisely ignored him and adopted the poison pill resolution to shut him out. Here is an article in the Wallstreet Journal entitled, " Carl Icahn’s Valuable Netflix Lesson: Don’t Listen to Carl Icahn."

 

The premise: Thank goodness for Icahn, Netflix stuck to its business plan, and ignored him. Icahn made tons of money on Netflix despite his trying to undermine the companies leadership by attempting to force it to put itself on the market. Icahn essentially benefitted from Netflix ignoring him. 


Edited by TBell - 2/10/14 at 6:30am
post #38 of 72
Quote:
Originally Posted by sog35 View Post
 

 

20% is ridiculously good for the last 10 years considering the major crash in 2007-2009

 

When you prove yourself as an investment genius for 40+ years and make your clients BILLIONS of dollars then you will get the benefit of the doubt like Ichan.  Till then stop crying like a baby that he gets the praise he deserves and worked hard to achieve.

 

And its not like all his investments automatically become golden because he buys them and makes it known.  DELL did not do much.

 

If you successfully go into a store and steal your friends a case of Budweiser, even though you and your friends are happy, should the rest of us congratulate you? The point, the context of one's success should be examined. 

 

As far as the 20 percent figure goes, that is ridiculously good. However, can you really equate that success as to the same type of investing that regular folks do on the market? If not, is it really fair to compare his earnings to how average people perform on the market? 

 

 He is not merely buying a stock, and waiting for the stock to go up like regular investors do. He is actively trying to control the company, and often forces companies to engage in practices that benefit him at the expense of the long term interests of the companies he so called invests in.  

post #39 of 72
Quote:
Originally Posted by sog35 View Post
 

 

All the airlines were F'uped in the 80's.  They were all going to go bankrupt because of stupid business decisions.

 

Ichan Enterprises LLP has a return of 631% over the last 10 years (2004-2013).

To say he doesn't know the stockmarket is idiotic.

 

 

I never said he doesn't know the stock market, and I don't keep throwing out percentages of returns as if that somehow means something to long term Apple investors. If percentages impress you though, I put all my investments in Apple right out of college in Apple at about $15 a share. The stock split twice and is now trading at over $500 dollars a share. Perhaps, you should be listening to me as my percentage of success outweighs Icahn's. I also didn't have to work as hard for my return as Icahn. My only regret is I did not have more funds at the time to sink into Apple. 

 

I know facts bore you, but go read up on TWA. Carl bankrupted the airlines by saddling it with over 450 million in debt and stripping it of its most valuable assets. 

post #40 of 72
Quote:
Originally Posted by TBell View Post
 

 

If you successfully go into a store and steal your friends a case of Budweiser, even though you and your friends are happy, should the rest of us congratulate you? The point, the context of one's success should be examined. 

 

As far as the 20 percent figure goes, that is ridiculously good. However, can you really equate that success as to the same type of investing that regular folks do on the market? If not, is it really fair to compare his earnings to how average people perform on the market? 

 

 He is not merely buying a stock, and waiting for the stock to go up like regular investors do. He is actively trying to control the company, and often forces companies to engage in practices that benefit him at the expense of the long term interests of the companies he so called invests in.  

 

Regular investors can buy the stocks he buys or invest in his company.

 

Break news: Icahn has dropped his proposal.  He is happy and satisfied with the $14B Apple has recently bought back and won't fight the board over the his $50B proposal.

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