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Carl Icahn Abandons Push for Apple to Boost Stock Buyback

Monday February 10, 2014 6:45 am PST by Kelly Hodgkins

Billionaire Carl Icahn has abandoned his effort to encourage Apple to increase its stock repurchasing program, according to a new letter addressed to Apple shareholders. Icahn had aggressively pushed for an increased stock buyback of up to $150 billion, going so far as to recommend a proxy vote for shareholders to support his agenda.

carl_icahn

In explaining his reversal, Icahn points to a recent decision by Apple to repurchase $14 billion on a dip in the company's stock price following its most recent earnings announcement. Well-known proxy advisory firm Institutional Shareholder Services (ISS) this week also sided with Apple and recommended against Icahn's scaled-back $50 billion stock buyback plan presented to shareholders.

That being said, we also agree with ISS's observation, taking into account that the company recently repurchased in "two weeks alone" $14 billion worth in shares, that "for fiscal 2014, it appears on track to repurchase at least $32 billion in shares." Our proposal, as ISS points out, "thus effectively only asks the board to spend another $18 billion on repurchases in the current year."

As Tim Cook describes them, these recent actions taken by the company to repurchase shares have been both "opportunistic" and "aggressive" and we are supportive. In light of these actions, and ISS's recommendation, we see no reason to persist with our non-binding proposal, especially when the company is already so close to fulfilling our requested repurchase target.

Icahn went on to say that he is excited about Apple's future, which will see the company introduce products in new categories this year. Rumors strongly suggest Apple is working on a watch/fitness band with sensors to potentially measure steps, calories, heart rate, glucose levels and more. Apple has assembled a "dream team" to work on this iWatch product, hiring a number of the best and brightest scientists from the medical device and health sensor field.

Apple's 2014 annual meeting of shareholders is scheduled for February 28, 2014.

Top Rated Comments

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Lostanddamned

9 weeks ago

This is literally all I think of when I hear about Carl Icahn.

Rating: 45 Positives

tmaxxtigger

9 weeks ago

Yay, different picture, although it's only a slight improvement!!

Rating: 21 Positives

appleken

9 weeks ago

What, this picture?

Rating: 19 Positives

Alumeenium

9 weeks ago

No one wants or needs a goofy watch

try dictating a text to your girlfriend, while you're at dinner with your wife

:D

Rating: 9 Positives

jav6454

9 weeks ago

He gave up? He doesn't strike me the guy to give up easily. Something went down.

Rating: 9 Positives

Rogifan

9 weeks ago

Well played Tim. :)

Rating: 9 Positives

FirstNTenderbit

9 weeks ago

That's a sudden change in direction for him.

I don't see it as a change at all. I see it as he is basically getting what he wanted all along. If Apple does buyback $32B in 2014 why would he need to keep pushing for a continued buyback?

Ask for 50, settle for 32. Call it a win. This is not to say Apple's buyback has anything to do with Icahn. It could have simply been their plan all along. Nevertheless, he still gets what he wanted.

Rating: 6 Positives

musika

9 weeks ago

Good riddance, champ!

Rating: 5 Positives

giantfan1224

9 weeks ago

I mean he makes some grand statement, invests millions into Apple, and then a few weeks later changes his stance...this seems like an obvious scheme to me.

Can you give us some specifics about what this obvious scheme might be? And please, leave out the dubious Hollywood script.

(BTW, he invested BILLIONS, not just millions.)

Rating: 4 Positives