Icahn AAPL Investment Tops $3B as he Slams Board over Stock Buyback

| Apple Stock Watch

What do you do when you don't have confidence in a company's ability to manage its cash? Buy up the company's stock while at the same time berating it. That's what Carl Icahn is doing with Apple as his brings his stock investment in the iPhone and iPad maker up over US$3 billion.

Carl Icahn has a $3 billion investment in Apple and is pushing for a more aggressive stock buybackCarl Icahn has a $3 billion investment in Apple and is pushing for a more aggressive stock buyback

In a post on Twitter he said, "Having purchased $500 million more $AAPL shares in the last two weeks, our investment has crossed the $3 billion mark yesterday."

He added,

We feel $APPL board is doing great disservice to shareholders by not having markedly increased its buyback. In-depth letter to follow soon.

He went so far as to call buying Apple stock a "no brainer," despite his concern that the company isn't buying back as much of its stock as he would like. The buyback he's referring to is Apple's program to repurchase $60 million of its stock by the end of 2015 -- a number that he feels should be up around $150 million.

It's a safe bet his letter will push his view that Apple needs to be more agressive in its stock buyback program, and may well speak poorly about the company's board of directors for how it's handling the stock and big cash horde.

In a CNBC interview Wednesday morning, Mr. Icahn said, "There's no one on Apple's board that is a finance guy. I'm criticizing Apple's board, not the management."

The irony for Mr. Icahn is that he knows he's in a stronger position to keep buying up more of Apple's stock as long as the current buyback program isn't expanded. As Apple buys back more stock, the value of what's left on the market can rise. Since Apple isn't buying back as much as he'd like, he can purchase more at a lower price.

Apple will host its annual stockholder meeting on February 28 and the share buyback program will likely be a hot topic for many investors. Mr. Icahn has backed down from his more agressive buyback proposal, but would still like Apple to increase its investment by $50 million.

Apple is currently trading at $552.84, up 3.77 (0.69%).

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Comments

geoduck

The irony for Mr. Icahn is that he knows he’s in a stronger position to keep buying up more of Apple’s stock as long as the current buyback program isn’t expanded. As Apple buys back more stock, the value of what’s left on the market can rise. Since Apple isn’t buying back as much as he’d like, he can purchase more at a lower price.

So Icahn wants Apple to buy back more stock to make his investment grow. In other words he does not give a rat’s @$$ about what might be best for the company, he just wants more cash to add to the billions he already has. He is a despicable SOB.

skipaq

Amen, geoduck.

vpndev

Billions, guys. Billions, not millions.

geoduck

vpndev
I noticed that. I just assumed that I was remembering it wrong, but billions does make more sense.

craigf

I’ll be sure to return my proxy this year to support the board.

FU Carl.

JustCause

Carl Icahn doesn’t want any company to be autonomous. With Apple having so much money it doesn’t need banks, etc to borrow from to make deals, it is a thorn in the banking/investment communities side! They will do anything they can to undermine Apple, including creating an undervalued environment .

PSMacintosh

A.  Carl Icahn is obviously only interested in himself.
His “advice” and his “requests” of Apple are for his own interests.  He is not really concerned about Apple, Apple’s customers, or Apple’s other stockholders.
Ultimately, this is a game to him to gain some sort of undue benefit and gross profit at someone else’s expense.

He is not interested in Apple’s long-term good. He is only in this game until he can cash in on his plan and eventually jump out.
We should all be very concerned!

B.  All stockholders should vote AGAINST Icahn’s proposal on the proxy ballot.  The reduced dilution benefits Icahn disproportionately more than it benefits small stockholders as it gives him usable power and clout, not so for unorganized small stock owners.
If Apple wants to and decides to increase their buyout, it should be their uncoerced, reasoned decision.

C.  Now—with Icahn knocking on the door—is probably a good time for Apple (1) to be more diluted and (2) to hold onto its cash (to use defensively or strategically), rather than to spend it.

D.  Lastly, I’m wondering about the recent “IMPLEMENTATION OF MAJORITY VOTING FOR THE ELECTION OF DIRECTORS” whereby Apple—at the earlier vote of a majority of stockholders—is re-structuring the election method for Board members and changing from staggered Board terms to all Directors being on the same one year term and elected each year.
Does this type of change favor or disfavor Corporate Raiders, such as Icahn?

PSMacintosh

Question:
If a stockholder votes on an online ballot in a certain way and then later, but still before the meeting, wants to change their vote, how do they do that?  Can they do that?
Is it as simple as just re-voting their online ballot?
(I’ve been wondering that for years.)

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