Carl Icahn Discloses 'Large Position' in Apple, Believes Company is 'Extremely Undervalued'

IcahnLegendary investor Carl Icahn disclosed on Twitter today that his holding company has taken a 'large position' in Apple, believing that the company is 'extremely undervalued' and should increase its share buyback program.

This is similar to the advice that Warren Buffett gave earlier this year, though Buffett did not take a position in Apple.

Icahn disclosed his position on Twitter after yesterday warning investors that he may disclose material information on that account in accordance with new SEC guidelines on social media use.

We currently have a large position in APPLE. We believe the company to be extremely undervalued. Spoke to Tim Cook today. More to come. - 12:21 PM - 13 Aug 13

Had a nice conversation with Tim Cook today. Discussed my opinion that a larger buyback should be done now. We plan to speak again shortly. - 12:25 PM - 13 Aug 13

Icahn, who has an estimated net worth of $20 billion, has recently been extensively involved in efforts to keep Dell from going private and he also holds a 16% stake in Nuance, the speech recognition company that Apple uses for Siri.

Update: According to Bloomberg, Icahn has taken a position of at least $1 billion in Apple and is projecting the stock price to rise to over $600.

Update 2: Apple issued this statement regarding Icahn's investment:

We appreciate the interest and investment of all our shareholders. Tim had a very positive conversation with Mr. Icahn today.

Update 3: The Wall Street Journal has more from an interview with Mr. Icahn.

"This is a no brainer to go buy stock in a company that can go borrow" at a low rate, Mr. Icahn said. "Buy the company here and even without earnings growth, we think it ought to be worth $625."

Mr. Icahn's thesis rests on Apple borrowing at about a 3% interest rate and buying back shares right now, likely at around $525 a piece. That would send shares to $625, Mr. Icahn says, without taking into account any earnings growth.

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Top Rated Comments

the8thark Avatar
142 months ago
Stock price and market manipulation at it's finest?
Score: 54 Votes (Like | Disagree)
bradl Avatar
142 months ago
... and AAPL is up 4.5%

And with that, Icahn just made everything that Ellison said yesterday a crock.

BL.
Score: 20 Votes (Like | Disagree)
mrtune Avatar
142 months ago
I guess that must explain why AAPL is up over 4.5% today.
Score: 15 Votes (Like | Disagree)
GfPQqmcRKUvP Avatar
142 months ago
Well glad to read something positive lastly. Sick of all the idiots coming out of the woodwork bad mouthing Apple. Who is it, Samsung or Google paying these people.

All I feel is hate hate hate for Google and Samsung. Feel like beating the crap out of the next Korean I see. relax I wont. Feel like smashing the next android piece of crap i see. This is just sick. Making me feel sick. Might have to lay off the rumors website for a while.

Sorry, but this is really how I feel when I read this column lately.

You need to go outside and seek help immediately. I'm being serious, your post is pretty indicative of someone who needs help working through some larger issue.
Score: 13 Votes (Like | Disagree)
Some guy Avatar
142 months ago
Apple is doomed.
Score: 13 Votes (Like | Disagree)
Clubber Avatar
142 months ago
Stock price and market manipulation at it's finest?

I'm smelling that to. Goes along with the quote, "The best way to predict the future is to make it."
Score: 11 Votes (Like | Disagree)