Carl Icahn calls Apple a 'no brainer' investment as his stake grows to over $3B

Posted:
in AAPL Investors edited January 2014
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


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.

Icahn


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.
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Comments

  • Reply 1 of 85
    poochpooch Posts: 768member
    i'm guessing he needs all the votes he can get for his proposal. i'm still voting no.
  • Reply 2 of 85
    I think we all know Icahn is devising ways to increase apples share prices before his big sell off. Whether or not apple should buy more of its own shares is not a huge deal to me. If they buy more that's less shareholders to deal with. If they buy less that's more money to invent with. I'd like to see them stop the buy back program altogether and spend it on building a whole Apple city!
  • Reply 3 of 85
    MarvinMarvin Posts: 15,273moderator
    Billionaire activist investor Carl Icahn called his continued investment in the company a "no brainer."

    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).
  • Reply 4 of 85
    Considering most don't see APPL as long term, he's determined to get at the cash as quickly as he can before ol El'Google squashes the apple with the droid horde wars.

    Not that I think that will happen, but Wall Street obviously does.
  • Reply 5 of 85

    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. 

  • Reply 6 of 85
    The news of Icahn buying more shares has pushed all other news out of the stock app. This is really exaggerated.
  • Reply 7 of 85
    Originally Posted by soulsearcher View Post

    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.

     

    Originally Posted by sog35 View Post

    It cannot be denied.  The dude helps what ever stock he owns and pushes. 


     

    Nice fallacy. Try again.

     

    Don't hate the player hate the game. 


     

    We wouldn’t hate the player if he was doing anything whatsoever to end the game instead of playing it like the others.

  • Reply 8 of 85
    Will this guy just go away?
  • Reply 9 of 85
    512ke512ke Posts: 782member

    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.

  • Reply 10 of 85
    tbelltbell Posts: 3,146member
    pooch wrote: »
    i'm guessing he needs all the votes he can get for his proposal. i'm still voting no.

    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.
  • Reply 11 of 85

    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

  • Reply 12 of 85

    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! :err:

  • Reply 13 of 85

    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. 

  • Reply 14 of 85
    dasanman69dasanman69 Posts: 13,002member
    Isn't that Dale from The Walking Dead?
  • Reply 15 of 85
    gqbgqb Posts: 1,934member
    Quote:

    Originally Posted by TBell View Post





    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.

  • Reply 16 of 85
    dasanman69dasanman69 Posts: 13,002member
    sog35 wrote: »
    wrong.  Dividends force investors to pay higher taxes. 

    I can't quite understand why people concern themselves with the tax rate on free money.
  • Reply 17 of 85
    Keep the cash...buy Nintendo & GoPro.
  • Reply 18 of 85
    Cue CNBC live free monologue PR segment.
  • Reply 19 of 85
    Carl's issue is the excess cash. Apple owes the stockholders an explanation
    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
  • Reply 20 of 85

    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.

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