The Day a Tweet from Carl Icahn Raised Apple’s Value by $20 Billion [Update]

| Apple Stock Watch

Then there was the day that a couple of tweets from Carl Icahn sent Apple Inc.'s stock up almost 5 percent. That day was Tuesday, when shares of $AAPL rose US$22.21 (+4.75 percent) to close at $489.57, and it did so on three times the average volume with 31.3 million shares trading hands.

Carl Icahn is a fabulously successful rabble rouser famous for the "Icahn Lift" and infamous for both aggressive corporate raiding and shareholder activism. On Tuesday, Mr. Icahn supplied that Icahn Lift to Apple by announcing—via Twitter—that he has taken a "large position" in the company.

His tweet:

That was followed immediately by a second tweet, where he said that he had spoken with Apple CEO Tim Cook (you can do that when you're Carl Icahn):

Bloomberg reported that Mr. Icahn's stake is more than $1 billion—if you're keeping score at home, that's a lot of money. He accumulated that position over the last month, before he made his announcement. He also told Bloomberg that he believes Apple's proper value is more like $600 per share.

The markets reacted almost immediately, as you can see in the chart below. That sharp jump in the early afternoon session coincided with Mr. Icahn's tweets, which went out at 2:25 PM EDT.

AAPL Chart

$AAPL Chart for August 13th, 2013
Source: Yahoo! Finance

And that, kids, is how one man's opinions can undo the concerted work of Apple's doubters with a few strokes of his keyboard or taps of his fingers. It's kind of like Doug Kass, but rather than being based on nothing and fleeting as a fat man's gas, the Icahn Lift tends to have a lasting impact on a company's stock performance.

Mr. Icahn's most recent shareholder battles has been in Dell's board room, where Mr. Icahn has fought (unsuccessfully, so far) to scuttle Michael Dell's efforts to take his namesake company private.

Mr. Icahn has argued that the deal offered by Mr. Dell and his backers short changes Dell's investors, and he pushed for a separate buyout offer by a rival group of investors. He is currently suing Dell to block the sale.

It's a rare failure for Mr. Icahn, but he has history of betting big—think go big or go home. It will be interesting to see what comes out of his newfound interest in Apple.

[Updated with more information on Mr. Icahn's stake. - Editor]

*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.

Comments

Lee Dronick

Damn! I hope that it goes even high and stays up even after the September 10th event.

Intruder

“…activist shareholder activism.”???

palenoue

Activate the active shareholders activism for the activists.

RonMacGuy

Lee, yes, my stock options may actually become worth something if that happens!!

Lee Dronick

Ron I bought at $25, I wish that I had bought more shares.

skipaq

Don’t like how one person can move a stock price like this.

Lee Dronick

Yeah, it is kind scary what Carl did, but it more than balanced out what Ellison said.

RonMacGuy

Lee, that’s awesome. I was mostly in the $130 range. I did have a trade order to sell on the way down from 700. Sold a bunch in mid 600s but bought back in in the mid 500s. Increased number of shares this way.

MOSiX Man

“...one man’s opinions can undo the concerted work…”

MOSiX Man

Anybody else wonder what Tim told Carl, that make him this bullish on Apple, based on the one conversation? I suspect that the mythical ‘lull in innovation’ at Apple, will evaporate over the next year, starting on September 10th (iPhone day).

MOSiX Man

Lee, I hate you. ; ) When APPL was priced that low, I should have invested any and all spare money I had (regardless of the hysterical laughter of my friends). <Insert novella about the keen visual acuity of hindsight and spending money wisely>

Lee Dronick

That is alright MOSiX Man. It wasn’t all of my mad money, but I should have put more in. Now, for me, is the gamble on when to sell.

skipaq

It is more likely that the “new” stuff, if any, that is coming will be in the October to December period. While the upgraded iPhones of September are important bottom line products; they are expected updates. The same is true with updated iPads later.

If Apple is to grow its’ products to expand income there will be something new as in wearable tech and/or TV initiatives.

RonMacGuy

Anybody else wonder what Tim told Carl, that make him this bullish on Apple, based on the one conversation?

I don’t think Tim necessarily told Carl anything.  Bloomberg cited an unnamed “person with knowledge of the purchase” in saying that Icahn had “accumulated the position over the past month.”

 

skipaq

Cook certainly didn’t tell him anything about specific product releases.

Apple just confirmed the purchase of Matcha TV. This likely took place in May. Just one more indication of an Apple TV update.

mrmwebmax

+

The Yahoo Finance chart isn’t showing. Looks like a broken link.

John Dingler, artist

Carl Icahn has pumped up Apple’s stock which he will later dump. This is classic “pumping and dumping,” which is a manipulation of stock. He has also been permitted to meet with the CEO. This is special access. These two should be illegal if the person has a significant position in Apple stock; It shows just how unbalanced the playing field is for the unconnected such as any of us here who have minuscule positions. I bet you that we can’t get that kind of access any time we want.

Is it the Securities and Exchange Commission that monitors such scams, looking out for the people, or does it exist to protect the corporation and the connected only?

ibuck

John Dingler: Is it the Securities and Exchange Commission that monitors such scams, looking out for the people, or does it exist to protect the corporation and the connected only?[/quote}

The latter. US Senator Elizabeth Warren (D-Mass) is trying to change such unfairness, but the Republicans are staunchly trying to prevent any such changes.

ibuck

Would I like TMO’s edit feature for Comments to return? 

Big time.  Not only to correct typos, as in this case, but sometimes to make my comments more clear.

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