Carl Icahn calls Apple a 'no brainer' investment as his stake grows to over $3B
Billionaire activist investor Carl Icahn took to his official Twitter account on Wednesday to reveal that he has purchased $500 million more shares of Apple stock in the last two weeks, and called his continued investment in the company a "no brainer."
Icahn's total stake in Apple grew to more than $3 billion as of Tuesday, up from his previous stake of around $2.5 billion. The comments made by Iachn Tuesday morning helped to send shares up nearly 1.5 percent in early trading.
But while Icahn was complimentary of Apple as an investment, he didn't make positive remarks about the company's board of directors. The investor said that he believes Apple's board is doing a "great disservice to shareholders by not having markedly increased its buyback."
Icahn has promised to publish an "in-depth letter soon" that will discuss his continued efforts to have Apple institute a larger buyback of its own shares. As of the end of the September quarter, the company had some $150 billion in cash, most of it stored overseas, and Icahn has said he would like to see all of it spent on a share repurchase program.
During fiscal 2013, Apple spent $23 billion of an expanded $60-billion share repurchase authorization, which contributed to combined dividend payments and repurchases totaling over $43 billion since the program was initiated some six quarters ago.
However, Icahn formally filed a shareholder proposal in November to push his repurchase plan. Apple, unsurprisingly, has recommended that investors vote against the proposal, saying that its board is already "thoughtfully considering options for returning additional cash to shareholders."
But Icahn's deep pockets and considerable sway among Wall Street ensure that his opinions on companies as large as Apple will be heard. In fact, his clout is so great that he even earned private meetings with Apple Chief Executive Tim Cook and Chief Financial Officer Peter Oppenheimer.
Icahn's total stake in Apple grew to more than $3 billion as of Tuesday, up from his previous stake of around $2.5 billion. The comments made by Iachn Tuesday morning helped to send shares up nearly 1.5 percent in early trading.
But while Icahn was complimentary of Apple as an investment, he didn't make positive remarks about the company's board of directors. The investor said that he believes Apple's board is doing a "great disservice to shareholders by not having markedly increased its buyback."
Icahn has promised to publish an "in-depth letter soon" that will discuss his continued efforts to have Apple institute a larger buyback of its own shares. As of the end of the September quarter, the company had some $150 billion in cash, most of it stored overseas, and Icahn has said he would like to see all of it spent on a share repurchase program.
During fiscal 2013, Apple spent $23 billion of an expanded $60-billion share repurchase authorization, which contributed to combined dividend payments and repurchases totaling over $43 billion since the program was initiated some six quarters ago.
However, Icahn formally filed a shareholder proposal in November to push his repurchase plan. Apple, unsurprisingly, has recommended that investors vote against the proposal, saying that its board is already "thoughtfully considering options for returning additional cash to shareholders."
But Icahn's deep pockets and considerable sway among Wall Street ensure that his opinions on companies as large as Apple will be heard. In fact, his clout is so great that he even earned private meetings with Apple Chief Executive Tim Cook and Chief Financial Officer Peter Oppenheimer.
Comments
That's what everyone calls Carl too.
Isn't it sick that he's probably made a couple of hundred million dollars from his investment in Apple - 100x more than average workers earn in a lifetime and more than most of the staff at Apple - while contributing precisely zero to the company (when he inevitably sells of course).
Not that I think that will happen, but Wall Street obviously does.
I will be voting yes on that proposal. I was thinking the exact same thing long before Icahn suggested a buyback. Unless Apple is planning some massive acquisitions which is very unlikely I think all that cash is better served buying back stock in the company than just sitting in low interest accounts doing nothing.
You’d be wrong.
It cannot be denied. The dude helps what ever stock he owns and pushes.
Nice fallacy. Try again.
We wouldn’t hate the player if he was doing anything whatsoever to end the game instead of playing it like the others.
Carl doesn't think the Droid Wars are going to squash Apple.
Rather, Carl recognizes that Apple is growing, in sales, market share, and profits.
Apple has a sticky ecosystem. That's why short term Apple growth in these three areas, means long term Apple growth.
There is no such thing as a temporary Apple surge. Apple is on a steady rise.
There is such a thing, however, as a precipitous Android fall. I don't see Android going away as the world's dominant mobile OS, but I personally see Android taking a hit in 2014.
Adding to that hit is going to be Samsung and other companies' forking Android and also offering their own proprietary competing operating systems like Tizen.
They have to abandon Android in order to differentiate their product.
Android is a better sprinter. Apple is better at winning marathons.
As a long term investor, I am voting no. Apple conservatively manages its money. Once a year it does a review. Carl is just looking for a quick bump to push the stock up before selling. As a shareholder I would prefer to see an increased dividend, which favors long term investors and is more responsible.
i am sorry Mr. Icahn, but you are only interested in fast and easy money, no longterm investment, no longterm strategy! This is typical for todays large players as you are one. It´s a pity, because you could be one of them to safe the world (at least to keep it longer alive) without loosing anything. In this case, I totally agree with the board of Apple, its managers and its strategy! I hope they will go on as they did the last 30 years and create great products with high quality!
best regards
Michael Wanger
Salzburg, Austria
To Carl Haters- Investments is about making more money. It does not matter short term or on a longer term basis as long as you are making it. Everyone has its own style of investment.
The way Spamdroids poor people whine on Apple users/products, same way now Carl Haters are whining.
Keep it simple------> Make money, stay happy and Ignore the noise!
Imagine if Carl Icahn did not own any Apple stocks at all and had not made this proposal and we were just considering this as a hypothetical possibility. How many of you would then be opposed? From what I am reading it seems the negativity has little or nothing to do with the actual buyback but more to do with the fact that it is Carl Icahn that is pushing for it. I think the guy is also a douche and am not a fan. But take him out of the equation and please explain to me why all those billions only earning 1% could not be better served with a buyback which would lower dividend costs for Apple with less to pay out with a higher stake as well as giving Wall Street analysts slightly less influence to manipulate the stock.
As a long term investor, I am voting no. Apple conservatively manages its money. Once a year it does a review. Carl is just looking for a quick bump to push the stock up before selling. As a shareholder I would prefer to see an increased dividend, which favors long term investors and is more responsible.
My Schwab proxy recommended a 'no' vote, and I agree.
Frankly, I'll take the advise of the guys who are (ostensibly) on my side. Carl will cash out if he gets his big bump, causing as much as a dive as he (possibly) caused on the upside.
I can't quite understand why people concern themselves with the tax rate on free money.
His buying Apple suggests that Apple is undervalued.
Buying Yahoo may be a better idea
And the Chairman of the board of Apple should not have a full time job, as CEO of a company owned by Google, the name is Calico
He's a vulture who has no interest in Apple's long term future. It makes NO financial sense to buy back shares at a historically high price at this kind of level. Apple currently has the balance about right, but anything more aggressive hurts them in the long term. If in 4, 5 or 10 years time, the landscape is different and Apple needs to raise money, it might be selling the shares at a loss.