Carl Icahn Scales Back AAPL Stock Buyback Push

| Apple Stock Watch

Investor Carl Icahn scales back his push for AAPL stock buybackBig name investor Carl Icahn has scaled back some on how much more he thinks Apple should invest in its stock buyback program. Previously he was pushing for US$150 billion, but now is saying Apple should extend its current $60 billion buyback program by an additional $50 billion.

Sources talking with the Wall Street Journal said Mr. Icahn would like to see Apple wrap up its stock buybacks before the end of September 2014. His push for a lower buyback cap than he originally proposed, plus calling for a September deadline, could help him win over shareholder and analyst support.

Mr. Icahn's timetable is, however, still more agressive than Apple's. Currently, Apple plans to finish its stock buyback program by the end of 2015, not September 2014.

Apple's stock repurchasing program is a positive for the company because it can raise the overall value of the stock that's still available.

Mr. Icahn has been vocal about how he'd like to see Apple manage its stock, and has even met with company CEO Tim Cook to discuss his ideas. He is in a position to get Mr. Cook's attention considering he currently owns over $1 billion worth of the company's stock.

Following a dinner meeting with Mr. Cook at the end of September this year, Mr. Icahn said, "Had a cordial dinner with Tim last night. We pushed hard for a 150 billion buyback." The two agreed to talk more about Apple's buyback plans a few weeks later.

That wasn't the first time the two men talked. In August, Mr. Icahn revealed his large pile of Apple stock and said the company was undervalued. At the time he also said he had a conversation with Mr. Cook about the stock buyback program, which had the pleasant side effect for investors of boosting the company's stock value.

Apple isn't saying whether or not it will expand the stock repurchase program, but a company spokesperson did confirm that any changes it enacts will be announced in early 2014. The spokesperson said, "As part of our regular review process, we are once again actively seeking our shareholders' input on our program, and as we said in October, the management team and our board are engaged in an ongoing discussion about it which is thoughtful and deliberate."

Choosing when to make stock purchases is also something Apple will be watching closely. If its stock value is climbing, Apple won't get as much for the money it's spending, and that could play into when the program is completed, and it will have an impact on exactly how much stock can be purchased and kept off the market.

Mr. Icahn intends to put his buyback plan before a shareholder vote, although he missed the deadline to include his proposal in the company's 2014 Annual Meeting ballot.

Apple is currently trading at $571.66, up 6.66 (1.18%).

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2 Comments

ibuck

Am I correct in suspecting Mr. Icahn wants to pump up AAPL share price quickly so he can sell all his shares at a big profit? By doing so, AAPL will then fall, possibly with another downward trend? This would not be in the long-term interests of Apple or shareholders taking a longer view.

geoduck

ibuck
That’s certainly what I suspect. He’s described in Wikipedia as a “ruthless corporate raider” and I think that’s pretty accurate. He does not care what companies or other investors he hurts as long as he gets more profit.

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