Large stake investors clash over Apple cash ahead of shareholder meeting

Posted:
in AAPL Investors edited February 2014
A behind-the-scenes quarrel between APPL shareholders Carl Icahn and the California Public Employees' Retirement System is becoming increasingly public as the two trade barbs over Apple's cash hoard.

Clash


With Apple's annual shareholder meeting three weeks away, activist investor Icahn is pushing hard for Apple to use a about one third of its $158 billion cash hoard to buy back stock. He has a $3.6 billion position on the company.

As officially filed in Apple's proxy statement, Icahn has a proposal up for vote that would see Apple buy $50 billion worth of APPL stock, which would in turn boost its price. At least over the short term.

On the other end of the spectrum is the nation's largest state pension fund, the California Public Employees' Retirement System, which has $1.6 billion invested in Apple. CalPERS' senior portfolio manager of investment Anne Simpson has taken a page out of Icahn's playbook and spoke with CNBC on Wednesday.

"Now, standing outside and lobbing a brick through a window really is not a sensible way to engage in the conversation," Simpson said. "We don't think Carl Icahn, who's a relatively small investor with a very short-term agenda, should be steering the board of Apple, which is a very big company, with a long-term future which many people are relying on."

Icahn disagrees, characterizing Simpson as misguided. In the past, Icahn has taken to media outlets, Twitter and even sent out open letter to shareholders to push his agenda, and today's debate is no exception.

"It's a shame that Anne Simpson is more interested in spewing pejoratives than improving corporate governance in this country, which CalPERS is in a position to do," Icahn said, adding that he does not consider himself a short-term investor.

Indeed, Icahn Enterprises owns a number of stocks for which it has long-term positions. However, Icahn's investment style of buying huge chunks of a company's stock and advising the boards of those companies as to how best to manage their business, is seen by some as being detrimental to long-term investors.

CalPERS, on the other hand, is more passive as it manages the pensions of California state employees.

"I think this is more sound and fury than sensible advice, and what really needs to happen is the long-term owners should be there backing Apple in a rational, sensible and efficient deployment of capital.," Simpson said. "We don't want the company to be distracted by short-term noise."

With his aggressive style, Icahn Enterprises has posted an annualized return of 26.6 percent over the past ten years compared to CalPERS' 7.1 percent over the same period, the publication said.

For its part, Apple's board has recommended shareholders vote against Icahn's proposal, noting that the existing plan is to buy back $100 billion worth of stock through 2015, dishing out dividends to shareholders.

Apple's shareholder meeting is slated for Feb. 28.
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Comments

  • Reply 1 of 90

    This is the clash I want to see on the Apple TV WWF channel.

     

    But, you know, in the ring, in tights, and with ludicrous intros and actual wrestling moves.

  • Reply 2 of 90
    hill60hill60 Posts: 6,989member
    The guy owns 0.787% of Apples current market cap, he should come back with some serious money, then he can have a say.
  • Reply 3 of 90
    jungmarkjungmark Posts: 6,647member
    Thanks for the reminder to vote No. Cue the Carl Icahn posts.
  • Reply 4 of 90
    aaarrrggghaaarrrgggh Posts: 1,570member
    Boy, talk about suckers. APPL was de-listed a long time ago; they are still buying shares?!

    AAPL is likely a better investment.
  • Reply 5 of 90
    focherfocher Posts: 638member

    Yeah, thanks Carl for reminding me to just vote....NO!

     

    When I see an investor's rate of return, I wonder exactly what the true cost was. Companies going under or becoming non-competitive in their markets. People losing their jobs. Great for people like Icahn, but they leave a rather dismal state of things behind them.

  • Reply 6 of 90
    poochpooch Posts: 768member
    i'd like to see icahn publicly make a commitment to holding his aapl stock for a decade or more. then i might start taking him seriously.
  • Reply 7 of 90

    Way to tell him Cal Pers my retirement ;)

  • Reply 8 of 90

    I am voting my $900K worth of stock -  Carl is being "polite" - but is making a statement, that I appreciate.  

     

    Apple is holding onto way too much cash - over the top.   They don't need going on $200 Billion to buy supplies, secure manufacturing, research, buy companies, et al -!!!  

     

    Its way over the top.  Particularly since the cash keeps piling in and up!

     

    Apples best return is Apple - BUY BACKS, STOCK SPLIT (TO LET THE AVERAGE GUY IN WHO BUYS THE PRODUCT AND NOT JUST THOSE LIKE ME THAT CAN PAY $500 PER SHARE) - Look at Disney Stock for peets sake - a stock that was in the 30s and is now in the 70s today and is LOVED.

     

    Buy back the stock with around $50 Billion or so, split the stock perhaps 2 or 3:1 - and you will see major movement up.  This also brings in Engineers from Stanford, Berkeley et  al - that look for that stock appreciation/option appreciation for income.

     

     

    Carl is being polite - and is right

  • Reply 9 of 90

    "We don't want the company to be distracted by short-term noise."

     

    PRICELESS!

    Well Said!

    Bravo!

  • Reply 10 of 90
    I am voting my $900K worth of stock -  Carl is being "polite" - but is making a statement, that I appreciate.  

    Apple is holding onto way too much cash - over the top.   They don't need going on $200 Billion to buy supplies, secure manufacturing, research, buy companies, et al -!!!  

    Its way over the top.  Particularly since the cash keeps piling in and up!

    Apples best return is Apple - BUY BACKS, STOCK SPLIT (TO LET THE AVERAGE GUY IN WHO BUYS THE PRODUCT AND NOT JUST THOSE LIKE ME THAT CAN PAY $500 PER SHARE) - Look at Disney Stock for peets sake - a stock that was in the 30s and is now in the 70s today and is LOVED.

    Buy back the stock with around $50 Billion or so, split the stock perhaps 2 or 3:1 - and you will see major movement up.  This also brings in Engineers from Stanford, Berkeley et  al - that look for that stock appreciation/option appreciation for income.


    Carl is being polite - and is right

    We"ll have to agree to disagree. Buying back that much stock is a cheap parlour trick to artificially boost the price in the short term. Once the market corrects and guys like Carl have sold off all their shares then the price goes into free fall. Plus your taking 50B off the table that could be used for long term growth.

    It's clear that all your interested in is making a quick buck and not the health or longevity of Apple.
  • Reply 11 of 90
    focherfocher Posts: 638member
    Quote:

    Originally Posted by nyuestateplanninglawyer View Post

     

    Carl is being polite - and is right


     

    Lucky for the rest of us that actually do care about Apple's long term plans, the vote is non-binding. So it's not gonna happen.

     

    Most likely, the board is going to continue a stock buyback program on top of the currently authorized one. But I fully trust they have the most information to know when and how much is appropriate. The idea that the Carl Icahn's in the world should be interfering in anything within Apple is ludicrous to many of us.

  • Reply 12 of 90
    Quote:

    Originally Posted by Pooch View Post



    i'd like to see icahn publicly make a commitment to holding his aapl stock for a decade or more. then i might start taking him seriously.

     

    He'll be long dead before 10 years.

  • Reply 13 of 90
    I have Apple for the long term. Voted no.
  • Reply 14 of 90

    I am the ultimate Apple guy - you are not close.

     

    @ my second firm in 1990 - I was hauling a big bag to the office and doing all my legal work "empowered" in my Mac with disc drive.  Loved it - did not have to go through word processing - secretaries and their silly non-interest in work!

     

    In the last years of SJ - I started buying hand over fist out of the money options out 6 months to a year.  When they approached maturity, I rolled them out - kept doing it through 700s and then sold around 30% - invested in Apple stock and Disney, Starbucks, Facebook et al.

     

    So don't talk to me about "long term"  - I guarantee you are not even close to me in use / purchase of Apple product, Stock, or current options.  I am not in a "short term" mind set.

     

    Carl, though not in Apple as long as myself, has politely purchased over $4 Billion of Apple stock.  His investment has  brought the stock back from the high $300s to $510.   He has politely encouraged Mr. Cook (who I personally admire for management, and what I believe will be introducing OUTSTANDING product this year) to do productive financial adjustments for the Shareholders (one of them me - one of the most loyal users for about 30 years), and future employees/engineers that I want Apple to get as a Shareholder (hopefully my children in 10 years - who are on track to work for a great company like Apple if they keep it up - not exag.).     You get employees by having a growing company, good environment, and $$ (a large portion of which is appreciating stock).

     

    The price of Apple stock (growth) is critical to all you non-knowers.    Stock options are granted based on the current price of the stock when the options are issued.  Growth in the price of shares gives a "stake" to the young brilliant engineers - so they work on "the good side" (Apple), rather than a "Google" - where the stock has "been ripping".

     

    So don't be arrogant and think that stock appreciation means nothing "to long term thinkers".   As much as I love Apple - it will not be here for my kids to work unless stock price grows (product and appreciation of share growth) - we will only get the "inferior" graduates of Standford and Cal. - get it?????????? 

     

    Clearly some of you are clueless as to the value of buy-backs.  If you have faith in the growth/products at your company - such as I do with Apple and Cook - then you spend excess cash by reducing the stock count.   Price will go up because fewer people were issued shares (fewer shares outstanding) - and the remaining shareholders (me and Carl) will own more of the growth.  We also get rid of a bunch of flaky shareholders that are scared and not devoted like me and many of you AND CARL.

     

    If Carl was doing this as a 6 month effort to score billions - he would not be using prec./friendly language - he would want binding language in this resolution.    He is not.

     

    I have $900K (plus50+  options) - in Apple - and I am voting for Carl (which is not contradictory to fully supporting Tim Cook which I do).  

     

    Also - a good move would also be for Apple to split this stock into the Disney price range - and let the buyers of its products participate - they will not (constantly I have heard this) .. even though they can buy 1 share, 2 shares et al instead of 50 at $50 - Buy back ideal - buy back and stock split so Apple becomes the "people's stock" would be Nirvana

  • Reply 15 of 90
    aaarrrggghaaarrrgggh Posts: 1,570member
    So what would stockholders liked changed about the way Apple is doing business? Personally I would rather have the dividend boosted to 5%, which would provide a longer-term incentive than a single buyback.

    Right now though, I am getting prepared to write more calls to offload my stock. I just have too much in Apple at this point, and not enough confidence in where they are planning to go.
  • Reply 16 of 90
    So, let me get this sh** straight, Carl wants Apple to buy back their stock by borrowing 150 billion from the bank so he can sell his shares off, at some inflated imaginary cat in the hat price, without them falling in price as they would if he tried selling them on the open market. Now I get !!!

    The lay person would never understand this gimmick.
    The stock market is a Ponzi scheme, so it is without a doubt simply dubious for Carl to say that borrowing that money from the bank is giving REAL VALUE back to the shareholders. That's straight up bull****!!
    How the hell do you give real value in a Ponzi scheme!
    SMMFH!!
  • Reply 17 of 90
    Originally Posted by nyuestateplanninglawyer View Post

    You get employees by having a growing company, good environment, and $$ (a large portion of which is appreciating stock).


     

    All three you get by making the best products. And Apple does that. Without stock.

     

    The price of Apple stock (growth) is critical to all you non-knowers.


     

    Stock ? growth.

     

    So don't be arrogant and think that stock appreciation means nothing "to long term thinkers". 



     

    Rather, AAPL is a long-term held stock. You buy, sit on it, and then cash in after a decade of successes.

     

    As much as I love Apple - it will not be here for my kids to work unless stock price grows…


     

    Ludicrous nonsense.

     

    Clearly some of you are clueless as to the value of buy-backs.


     

    And some of us are clueless as to the role of stock in a company. That’s why the forum’s great; together we make a complete set of understanding.

     

    Originally Posted by maccherry View Post

    How the hell do you give real value in a Ponzi scheme!

     

    Be Ponzi.

  • Reply 18 of 90

    I have 100% confidence in where Apple is going.

     

    Love the watch - love the Health aspect/exercise tie in - love Ives input that there will be LOVE THE ECOSYSTEM TIE-IN.

     

    Love Apple TV

     

    Love the larger phones coming for 50+ people and Trump.

     

    Love the Ipads coming in varying and larger sizes.

     

    I love where we are going.

     

    I don't need a larger dividend - I think it is stupid - its dumped out of the company w/ no return.  I just reinvest 100% of dividend in new stock - its in retirment accounts so no tax impact.  But not same for others.   Buyback is an investment in Apple - which I believe.

     

    Go Carl - you and I FULLY believe in Cook and Apple - just not their use of the cash.  We say invest it in Apple.

     

    People are saying you are disloyal or out for a quick short billion. On the contrary - we are fully into Apple and its investment in Apple - WAKE UP

     

    You are not "disloyal" per that dim-wit Cal pers speaker today (how much have they lost for California retirees?????? ZILLIONS - THEY ARE STUPID) ........if you are suggesting to Cook to invest in Apple - while he is doing great things with product and future growth - there are 2 parts to business - that part and Carl's focus

  • Reply 19 of 90
    Quote:
    Originally Posted by nyuestateplanninglawyer View Post

     

    I have 100% confidence in where Apple is going.

     

    Love the watch - love the Health aspect/exercise tie in - love Ives input that there will be LOVE THE ECOSYSTEM TIE-IN.

     

    Love Apple TV

     

    Love the larger phones coming for 50+ people and Trump.

     

    Love the Ipads coming in varying and larger sizes.

     

    I love where we are going.

     

    I don't need a larger dividend - I think it is stupid - its dumped out of the company w/ no return.  I just reinvest 100% of dividend in new stock - its in retirment accounts so no tax impact.  But not same for others.   Buyback is an investment in Apple - which I believe.

     

    Go Carl - you and I FULLY believe in Cook and Apple - just not their use of the cash.  We say invest it in Apple.

     

    People are saying you are disloyal or out for a quick short billion.  Contrary o' stupid ones - we are fully into Apple and its investment in Apple - WAKE UP DON'T BE STUPID

     

    You are not "disloyal" per that dim-wit Cal pers speaker today (how much have they lost for California retirees?????? ZILLIONS - THEY ARE STUPID) ........if you are suggesting to Cook to invest in Apple - while he is doing great things with product and future growth - there are 2 parts to business - that part and Carl's focus




    Do you even know anything about CalPers?? it's the biggest retirement in the U.S. and I am proud of what they told Carl!!!!!

  • Reply 20 of 90
    rogifanrogifan Posts: 10,669member
    If you think Wall Street is bad...Woz thinks Apple should make phones running Android. On what's planets would that be considered a good idea? :no:

    http://www.cmswire.com/cms/mobile-enterprise/wozniak-apple-could-build-droid-phones-warns-of-police-state-024070.php
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