Carl Icahn teases 'interesting' open letter to Apple CEO Tim Cook
Investor and activist Carl Icahn, who previously had a public battle with Apple over its cash hoard, has revealed he will be sending another open letter to Chief Executive Tim Cook on Thursday, and indicated he believes the note "will be interesting."
Icahn also noted via his official Twitter account on Wednesday that it was just over a year ago he said he believed shares of AAPL stock were extremely undervalued. At that time, he revealed he held a "large position" in Apple.
Since Icahn disclosed his stake in Apple, shares of the company are up 50.6 percent, Icahn said. He invested another $1.65 billion in Apple this May, bringing his total stake in the company at the time to $4.4 billion.
Icahn made waves last year when he revealed he had met with Cook in an effort to push the company into a larger stock buyback to help boost earnings. At the time, Icahn owned about $1.5 billion worth of AAPL shares.
In the months that followed, Icahn turned up the heat on a prospective stock buyback, going so far as to file a shareholder proxy vote regarding the matter.
Icahn eventually dropped his aggressive effort, after Apple bought some $14 billion worth of its own shares in a matter of weeks in early 2014 -- the largest repurchase on record for such a short period. Icahn said at the time that further actions were unnecessary given the company was "so close" to reaching his proposed target.
Exactly what Icahn might want from Apple this time is unknown, but even with its share buybacks, the hugely profitable company ended its last quarter with $164.5 billion in cash and cash equivalents. Of that, $133.7 billion was held offshore.
The activist investor has a history of causing trouble with tech companies, most famously opposing Michael Dell's efforts to take PC maker Dell private. He also won three seats on the Yahoo Board of Directors, and is credited with helping to oust the CEO of Motorola, essentially forcing the company into the arms of Google.
And earlier this year, Icahn had pushed for eBay to spin off part of PayPal, even going as far as to draw up a proposal to shareholders that caused bad blood between him and eBay's management. Though the proposal was ultimately dropped, eBay and PayPal did split last week, and Icahn was unsurprisingly pleased by the development.
"It is almost a 'no brainer' that these companies should be separated to increase the value of these great assets and thus to meaningfully enhance value for all shareholders," he said. "It continues to be my belief that the payments industry, of which PayPal is an important part, must be consolidated --?either through acquisitions made by PayPal or a merger between PayPal and another strong player in the industry."
Icahn also noted via his official Twitter account on Wednesday that it was just over a year ago he said he believed shares of AAPL stock were extremely undervalued. At that time, he revealed he held a "large position" in Apple.
Since Icahn disclosed his stake in Apple, shares of the company are up 50.6 percent, Icahn said. He invested another $1.65 billion in Apple this May, bringing his total stake in the company at the time to $4.4 billion.
Icahn made waves last year when he revealed he had met with Cook in an effort to push the company into a larger stock buyback to help boost earnings. At the time, Icahn owned about $1.5 billion worth of AAPL shares.
In the months that followed, Icahn turned up the heat on a prospective stock buyback, going so far as to file a shareholder proxy vote regarding the matter.
Icahn eventually dropped his aggressive effort, after Apple bought some $14 billion worth of its own shares in a matter of weeks in early 2014 -- the largest repurchase on record for such a short period. Icahn said at the time that further actions were unnecessary given the company was "so close" to reaching his proposed target.
Exactly what Icahn might want from Apple this time is unknown, but even with its share buybacks, the hugely profitable company ended its last quarter with $164.5 billion in cash and cash equivalents. Of that, $133.7 billion was held offshore.
The activist investor has a history of causing trouble with tech companies, most famously opposing Michael Dell's efforts to take PC maker Dell private. He also won three seats on the Yahoo Board of Directors, and is credited with helping to oust the CEO of Motorola, essentially forcing the company into the arms of Google.
And earlier this year, Icahn had pushed for eBay to spin off part of PayPal, even going as far as to draw up a proposal to shareholders that caused bad blood between him and eBay's management. Though the proposal was ultimately dropped, eBay and PayPal did split last week, and Icahn was unsurprisingly pleased by the development.
"It is almost a 'no brainer' that these companies should be separated to increase the value of these great assets and thus to meaningfully enhance value for all shareholders," he said. "It continues to be my belief that the payments industry, of which PayPal is an important part, must be consolidated --?either through acquisitions made by PayPal or a merger between PayPal and another strong player in the industry."
Comments
Blow up your pants.
I hope Cook burns the letter.
So he's going to push for Apple Pay and Pay Pal to kiss and make up.
Or he's going to advocate for Apple buying Pay Pal when it's spun off.
I love how rich people are so egocentric. All about what's good for Icahn.
Well in this case it is usually also good for Apple shareholders as he is one and has his own interest at heart. His ideas before were sound and do help mitigate the low valuation the stock market has placed on AAPL shares. AAPL shares should be much higher based alone on the P/E ratio and the cash on hand. In a nutshell, wall street is treating the cash as if it did not exist.
I suspect Carl only cares about the stock. I have no interest in improving my stock price while interfering with the working of Apple under Tim Cook.
I think the future of Apple looks bright under Tim Cook, without Carl Icahn.
Well in this case it is usually also good for Apple shareholders as he is one and has his own interest at heart. His ideas before were sound and do help mitigate the low valuation the stock market has placed on AAPL shares. AAPL shares should be much higher based alone on the P/E ratio and the cash on hand. In a nutshell, wall street is treating the cash as if it did not exist.
His ideas were obvious to anyone paying attention. Company X has far more cash/cash equivalents than needed to fund operations, R&D and expansion? Company X should give back cash to shareholders in some form; higher dividends, special dividend, stock repurchase. His wanting the company to immediately borrow money to buy back the shares also was obvious, as the shares were considerably undervalued. He gets no credit for proposing the obvious.
However, his purchase of a large number of shares and his advertising that fact while stating that purchase of the shares was a no-brainer? In that he served a valuable function to underpin the shares, just as Apple did by repurchasing some $14 billion worth when the share price dropped after the January 2014 earnings report. Both Icahn's and Cook's confidence in the shares put a floor under them and helped to change the narrative.
I love how rich people are so egocentric. All about what's good for Icahn.
This guy would appear to be the epitome of hubris.
You guys may not like rich, egocentric people driven by hubris, but that has nothing at all to do with whether he has something intelligent or useful to say tomorrow.
Why not wait until tomorrow to form a judgment about (i) whether what he says is smart or stupid, and (ii) whether/how it is connected to his wealth and/or hubris?
Carl Icahn's history is why I bash him. His history isn't "support companies as they grow and become stronger", it's "pull every possible dollar out of the company and sell off the husk to whoever will pay for it". Yes, it's starting with something reasonable, turn some of that excess cash back over to the shareholders. It always starts with something reasonable.
And his statement that he isn't selling his stock in the buyback means his percentage of the company grows as the total amount of the company out there shrinks.
Apple is probably too big to destroy. But I've got no confidence he won't try.
confidence restored.
Apple said they were surprised at GTAT bankruptcy.
I put the blame soley on GTAT. They are a trash of a company and the CEO is a fraudster.
I'm still holding 550 shares and $6k in Jan2015 and Jan2016 calls.
If they were surprised wouldn't that suggest that Apple failed to adequately research and perform their fiduciary duties regarding their ongoing investment and partnership with GTAT?
What's wrong with being rich and egotistical?
Are you all a bunch of socialist commies or something?
I hope to one day have a tenth of as many shares that Icahn has. Hell, I'd be happy with far less than that too.
As for his recent proposal or letter, I will have to see it first, before I comment.
He's an interesting guy, that's for sure. Why can't he start bothering Google?
Icahn + Apple = TWA all over again, but in larger scale. This time it's justified to say "Jobs wouldn't never allow it".
On the other hand, in his place I would do the same. Strip Apple from cash, push it into debts and then sell it into bits and pieces on yard sale making a colossal fortune out of it. You can like Apple products as much as you want, but for eleven figure profit one will learn to use other stuff easily