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

Posted:
in AAPL Investors edited February 2014
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."
«13

Comments

  • Reply 1 of 51
    gtrgtr Posts: 3,231member
    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.

    [IMG ALT=""]http://forums.appleinsider.com/content/type/61/id/38266/width/350/height/700[/IMG]
  • Reply 2 of 51
    jungmarkjungmark Posts: 6,694member
    Now others besides Apple and many of us are saying no to Icahn. I wonder what the Carl-acolytes have to say.
  • Reply 3 of 51

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

  • Reply 4 of 51
    krawallkrawall Posts: 157member
    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.
  • Reply 5 of 51
    sporlosporlo Posts: 143member

    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.

  • Reply 6 of 51

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

  • Reply 7 of 51
    tcaseytcasey Posts: 199member
    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.
  • Reply 8 of 51
    sporlosporlo Posts: 143member
    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)

  • Reply 9 of 51
    mpantonempantone Posts: 1,383member
    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.
  • Reply 10 of 51
    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.

  • Reply 11 of 51
    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

  • Reply 12 of 51
    sog35 wrote: »
    sporlo wrote: »
    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?
  • Reply 13 of 51
    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
  • Reply 14 of 51
    bushman4 wrote: »
    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
  • Reply 15 of 51
    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

  • Reply 16 of 51
    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.

  • Reply 17 of 51
    foadfoad Posts: 697member
    castcore wrote: »
    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.
  • Reply 18 of 51
    foad wrote: »
    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?
  • Reply 19 of 51
    castcore wrote: »
    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
  • Reply 20 of 51
    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
Sign In or Register to comment.