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Carl Icahn drops push for more aggressive Apple share buyback

post #1 of 102
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Billionaire activist investor Carl Icahn on Monday dropped efforts push for Apple to spend the bulk of its considerable sum of cash on its own shares, citing recent stock repurchases by the company as "so close" to fulfilling his original goals.

Icahn
Activist investor Carl Icahn. | Source: Forbes


Icahn announced the repeal of his efforts in an open letter to shareholders. The backing off comes after Apple bought some $14 billion worth of its own shares in the last few weeks, marking the largest repurchase on record for such a short period.

"We see no reason to persist with our non-binding proposal, especially when the company is already so close to fulfilling our requested repurchase target," Icahn said.

Apple Chief Executive Tim Cook was "surprised" when shares in his company dropped 8 percent immediately following its quarterly earnings results. The pullback in shares of AAPL prompted the company to pounce on the opportunity in an "aggressive" fashion.

News of Apple's $14 billion investment in itself sent shares of Apple surging last week, and even earned positive comments from Icahn, who said the company's current trading price set by investors is "ridiculous." In a post to Twitter, he offered the advice, "Keep buying Tim!"

Icahn's efforts were also hurt by proxy advisory firm Institutional Shareholder Services, which issued a note On Sunday recommending that AAPL shareholders vote against his proposal. Icahn had asked shareholders to approve a $50 billion repurchase in the company's stock. Apple has spend $40 billion on shares in the past year alone.

ISS was also the second of the three major proxy advisors to recommend against Icahn's proposal, as Egan-Jones also advised investors to vote "no" last week.

Icahn's letter is republished in its entirety below:

CARL C. ICAHN

767 Fifth Avenue, 47th Floor

New York, New York 10153



February 10, 2014

Dear Fellow Apple Shareholders,

While we are disappointed that last night ISS recommended against our proposal, we do not altogether disagree with their assessment and recommendation in light of recent actions taken by the company to aggressively repurchase shares in the market.

In their recommendation, ISS points out, and we agree, that "on the spectrum of options for allocating capital, the board appears to have been sluggish only in returning excess cash to shareholders," and even though the company has in place "one of the largest buybacks in history" we agree with ISS that this effort seems "like bailing with a leaky bucket" when "given the scale of the company's cash reserves."

That being said, we also agree with ISS's observation, taking into account that the company recently repurchased in "two weeks alone" $14 billion worth in shares, that "for fiscal 2014, it appears on track to repurchase at least $32 billion in shares." Our proposal, as ISS points out, "thus effectively only asks the board to spend another $18 billion on repurchases in the current year."

As Tim Cook describes them, these recent actions taken by the company to repurchase shares have been both "opportunistic" and "aggressive" and we are supportive. In light of these actions, and ISS's recommendation, we see no reason to persist with our non-binding proposal, especially when the company is already so close to fulfilling our requested repurchase target.

Furthermore, in light of Tim Cook's confirmed plan to launch new products in new categories this year (in addition to an exciting product roadmap with respect to new products in existing categories), we are extremely excited about Apple's future. Additionally, we are pleased that Tim and the board have exhibited the "opportunistic" and "aggressive" approach to share repurchases that we hoped to instill with our proposal. It is our expectation that Tim and the board continue to exhibit this behavior as fiduciaries to the shareholders since they clearly seem to agree that our company continues to be extremely undervalued, and we all share a common optimism with respect to the company's bright long term future.

Sincerely yours,

Carl C. Icahn



For more information on this and other topics, follow me on Twitter at: @Carl_C_Icahn

https://twitter.com/Carl_C_Icahn

post #2 of 102
Because yesterday's investment report said he was wrong.
post #3 of 102

So when does he start selling his stock. Its obvious now that he's not able to push his weight around in money (and stock amounts) like he's done with other companies. 

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Mac Mini (Mid 2011) 2.5 GHz Core i5

120 GB SSD/500 GB HD/8 GB RAM

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post #4 of 102

Cue CNBC studio camera 1 - Icahn PR fluff "devoid of journalism" segment in 10,9,8......

post #5 of 102

🎉🎊🎶 HOORAY! WE WON! 🎶🎊🎉

 

“I don’t always concede defeat, but when I do, it’s using a pathetic excuse that toes the party line and makes me look like a total idiot.

Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
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Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
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post #6 of 102

Nice, quick, up move on AAPL this morning. I snapped up some shares when AAPL dropped to around 517 premarket this morning and boom!,  more than $10 up in a real short time. That's how I like to see AAPL move!

post #7 of 102

high-fives all around!

post #8 of 102
"I knew I was going to lose big time. Time to call it quits and look for another company to pillage."
post #9 of 102

Carl's such a tool. I'm delighted to see him get embarrassed again.

 

One thing for sure, he doesn't seem to understand high-tech.

post #10 of 102

If Apple keeps being smart and do there buybacks on big stock price drops like they just did there is no reason to push for is motion indeed.

post #11 of 102
Quote:
Originally Posted by mpantone View Post
 

Carl's such a tool. I'm delighted to see him get embarrassed again.

 

One thing for sure, he doesn't seem to understand high-tech.

 

That guy is pro Apple and imo he gets it.  Not sure I understand why so much hate...   He did "wake up" Apple to be smarter about there cash, imo he done is job and helped investors.

post #12 of 102

I'm suspicious.  What is he up to?   Maybe Apple should buy back more shares after all?

post #13 of 102

Bunch of lazy ass no talent animals called investors!

....the lack of properly optimized apps is one of the reasons "why the experience on Android tablets is so crappy".

Tim Cook ~ The Wall Street Journal - February 7, 2014

Inside Google! 

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....the lack of properly optimized apps is one of the reasons "why the experience on Android tablets is so crappy".

Tim Cook ~ The Wall Street Journal - February 7, 2014

Inside Google! 

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post #14 of 102
Quote:
Originally Posted by SudoNym View Post
 

I'm suspicious.  What is he up to?   Maybe Apple should buy back more shares after all?

 

imo he will hold his shares until Apple P/E is in the S&P500 average. And Apple float is so large he could dump 3 billions worth of shares over a week and it wont affect the stock price that much. There is no need to worry to much about is exit strategie.

post #15 of 102
Remind me never tp play poker with Tim Cook.
Icahn raised twice and folded when Apple called...and they still didn't show their hand.
post #16 of 102

Nobody trusts Icahn.  He may be sincere when he protests that his maneuverings are in the interest of long term AAPL stockholders but a career spent as a corporate raider, greenmailer, and hit-and-run boardroom shakedown artist has left him with zero trustworthiness.  Meh, he can always seek solace in his bank account.

post #17 of 102
See Carl, Apple knows what the eff they are doing. Back off and stop interfering. Where are the Carl-acolytes now?
post #18 of 102
I want to know Carl starts selling even one share of Apple stock! This guy has been allowed to destroy many companies due to his greed and has not been forced to pay for the destruction. This time he encountered a force that had friends to oppose his destructive greed. Goodbye, Carl!! Do not come back!!!!
post #19 of 102
Quote:
Originally Posted by Frac View Post

Remind me never tp play poker with Tim Cook.
Icahn raised twice and folded when Apple called...and they still didn't show their hand.
yes well played Tim.
post #20 of 102
Is is just me, or is there something perverse about a Carl Icahn who is so greedy and self-obsessed that he thinks Apple's policies should be driven by what does or doesn't make him money?

Does Apple Insider publish each every open letter by every Apple stock holder? Then why bother to publish his letter. Why give the guy a platform?

Broaden your scope a bit. Make fun of his greed and show how pitiful he is. Portray him like Charles Dickens did Scrooge in "A Christmas Carol." Show you know that there's more to life than the latest gadget or newest app.
post #21 of 102
Quote:
Originally Posted by Frac View Post

Remind me never tp play poker with Tim Cook.
Icahn raised twice and folded when Apple called...and they still didn't show their hand.

Yes, Tim Cook is a wolf in sheep's clothing.  No impatience, no fear.  His polite demeanor works in his favor, and I honestly believe he is better at negotiation than even Steve Jobs was.

 

Thompson

post #22 of 102
I can't keep wondering if the real reason is that he's butthurt that ISS is telling everyone to vote no. And they are big enough that folks will likely listen

A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

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A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

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post #23 of 102
And just like that, he vanished as mysteriously as he came.
post #24 of 102
Quote:
Originally Posted by AppleInsider View Post

"they clearly seem to agree that our company continues to be extremely undervalued"

I know the wordage there is justifiable but it's so distasteful. Tim Cook has worked there for 16 years, Carl just bought some second-hand stock I think it was 6 months ago and it's like he's got his arm round Tim's shoulder talking to him like he's one of them now.
post #25 of 102
Quote:
Originally Posted by herbapou View Post

That guy is pro Apple and imo he gets it.  Not sure I understand why so much hate...   He did "wake up" Apple to be smarter about there cash, imo he done is job and helped investors.

I'm not so sure he's pro-Apple but I suppose anyone that changes their last name from Cahn to iCahn must be.

Quote:
Originally Posted by Marvin View Post

I know the wordage there is justifiable but it's so distasteful. Tim Cook has worked there for 16 years, Carl just bought some second-hand stock I think it was 6 months ago and it's like he's got his arm round Tim's shoulder talking to him like he's one of them now.

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #26 of 102
Quote:
Originally Posted by herbapou View Post

That guy is pro Apple and imo he gets it.  Not sure I understand why so much hate...   He did "wake up" Apple to be smarter about there cash, imo he done is job and helped investors.

To what end though? He's got considerable baggage, it helps to be wary of what his exact intentions are.
post #27 of 102
Quote:
Originally Posted by herbapou View Post
 

If Apple keeps being smart and do there buybacks on big stock price drops like they just did there is no reason to push for is motion indeed.

 

herbapou, it's really unclear what you're trying to say there.

post #28 of 102
Quote:
Originally Posted by JeffDM View Post

To what end though? He's got some baggage, it helps to be wary of what his exact intentions are.

I can clear that one up: to make a handsome profit. Now whether that is at the expense of Apple or not is up for debate. 1biggrin.gif

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #29 of 102

Carl is finally seeing that Apple spending money on share buy back is not driving the value up, you can not grow revenue streams by spending money on stock buy back and as long as Wall Street believe Apple has not future growth they will continue to hold the stock down. I suspect they Carl will be begin slowly dumping his position at this point.

post #30 of 102
Quote:
Originally Posted by macxpress View Post
 

So when does he start selling his stock. Its obvious now that he's not able to push his weight around in money (and stock amounts) like he's done with other companies. 

 

I would argue that he actually did. The board has been pretty slow and I really believe it was the spotlight that Icahn brought to the problem that got the company to be more aggressive. He put pressure on Apple where there was none. Apple is now being more aggressive. Glad to see he is backing off now that Apple is taking the issue more seriously. I expect him to stay in the stock long term as there is no reason to get out. 

post #31 of 102
Quote:
Originally Posted by leavingthebigG View Post

I want to know Carl starts selling even one share of Apple stock! This guy has been allowed to destroy many companies due to his greed and has not been forced to pay for the destruction. This time he encountered a force that had friends to oppose his destructive greed. Goodbye, Carl!! Do not come back!!!!

you will never know when he dumps his shares, he generally does not trade on the open market. He will find some investment fund looking to buy the stock cheaper then what it is trading in the market and buy it from him. He does his deals between institutions, not on the wall street.

post #32 of 102
Quote:
Originally Posted by bluebuoy View Post

"I knew I was going to lose big time. Time to call it quits and look for another company to pillage."


You realize he is up a billion dollars or so on his Apple investment...

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45 2a3 300b 211 845 833
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post #33 of 102
Quote:
Originally Posted by Maestro64 View Post
 

Carl is finally seeing that Apple spending money on share buy back is not driving the value up, you can not grow revenue streams by spending money on stock buy back and as long as Wall Street believe Apple has not future growth they will continue to hold the stock down. I suspect they Carl will be begin slowly dumping his position at this point.

 

As soon as Apple enters a new market with lots of growth potential, the stock will correct upwards. Dumping his position now would be idiotic. He may be a little brash, but I'm not seeing Carl as an idiot. 

post #34 of 102
Quote:
Originally Posted by SolipsismX View Post

I can clear that one up: to make a handsome profit. Now whether that is at the expense of Apple or not is up for debate. 1biggrin.gif

Well yeah, that's the concern. I think he's willing to do what he has to to make a buck, even if it's at the expense of those he pretends to ally.
post #35 of 102
Quote:
Originally Posted by Maestro64 View Post

you will never know when he dumps his shares, he generally does not trade on the open market. He will find some investment fund looking to buy the stock cheaper then what it is trading in the market and buy it from him. He does his deals between institutions, not on the wall street.

Thanks! But being so public about his Apple share purchases, being able to publicize when he sells the shares would be great.
post #36 of 102
Quote:
Originally Posted by herbapou View Post
 

 

That guy is pro Apple and imo he gets it.  Not sure I understand why so much hate...   He did "wake up" Apple to be smarter about there cash, imo he done is job and helped investors.

 

 

LOL. The guy is nothing but pro money, and Apple has plenty of it that he'd like to have. I am not sure how he woke Apple up. Apple hasn't changed anything because of Icahn. Two large long term institutional investors are opposed to Icahn's moves. Apple is far more likely to listen to them. Apple has not to date increased its buy back allocation. All Apple did was buy back a large chunk of stock when the price took a huge decline, but it already prior to Icahn allocated the money to buy the stock back.

post #37 of 102
Quote:
Originally Posted by Phone-UI-Guy View Post
 

 

As soon as Apple enters a new market with lots of growth potential, the stock will correct upwards. Dumping his position now would be idiotic. He may be a little brash, but I'm not seeing Carl as an idiot. 

Agreed. Icahn might be looking to deplete Apple's cash to his benefit, but he is not stupid. He will not dump the stock yet because Apple still has its cash, and plenty of upside potential. 

post #38 of 102

I don't think it's exaggerated to say that Apple buying back the stock precisely when it was going down was a big '**** you' to all the people who speculate on their shoulders. I really believe they did it on purpose. They will never say so of course.

post #39 of 102
Originally Posted by ClemyNX View Post
I don't think it's exaggerated to say that Apple buying back the stock precisely when it was going down was a big '**** you' to all the people who speculate on their shoulders.

 

Never mind that it’s cheaper to do that way. :lol:

Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
Reply

Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
Reply
post #40 of 102
So, buying back your own stock at inflated, imaginary prices is just another way of embezzling money from your company.
If Apple's stock went to $1100 tomorrow and if everyone that ownsshares tried selling them off the price would drop. Fast!
Why? Because you can't make due on a ponzi scheme.
How can you get out more than what you put in?
:/
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