NewImageNuance, the company that makes some of the voice recognition technology behind Apple's Siri, has adopted a 'poison pill' measure to deter any possible takeover attempts. Activist investor Carl Icahn, who recently bought more than $1 billion worth of Apple stock, also owns 16% of Nuance.

Icahn is famous for putting pressure on companies that he invests in, and some believe he could press Apple to purchase Nuance.

He has been publicly calling for Apple to dramatically increase its share repurchase program since he invested in the company.

Shareholder rights plans -- often called a 'poison pill' -- are a defensive tactic used by corporations to ward off unwanted takeovers. In Nuance's case, the company will allow shareholders to purchase additional shares of stock, thus diluting the whole stock pool, if any one investor holds more than 20 percent of the company. Icahn currently holds 16 percent of Nuance.

Nuance Communications, Inc. today announced that its Board of Directors has adopted a stockholder rights plan. Under the Rights Plan, stockholders of record at the close of business on August 29, 2013 will receive one right for each share of Nuance common stock held on that date. Initially, these rights will not be exercisable and will trade with the shares of Nuance common stock. If the rights become exercisable, each right will entitle stockholders to buy one one-thousandth of a share of a new series of participating preferred stock at an exercise price of $87.00 per right. The Rights Plan expires on August 19, 2014.

The Rights Plan is intended to enable all Nuance stockholders to realize the long-term value of their investment in Nuance. It is also designed to reduce the likelihood that any person or group would gain control of Nuance through open market accumulation or other coercive takeover tactics without paying an appropriate control premium. The Rights Plan was not adopted in response to any current effort to acquire control of Nuance.

The rights will be exercisable only if a person or group acquires 20% or more of Nuance’s common stock in a transaction not approved by Nuance’s Board of Directors.

Top Rated Comments

Technarchy Avatar
153 months ago
Force collective share buyback through cooperation with other major shareholders. Once Apple starts buying back shares, it's non voting stock -- his percentage of voting weight therefore automatically increases. Considering how much cash reserve Apple has, shareholders could hypothetically push Apple to dump most of it on stock buyback. Icahn would win big profits-wise, and also increase his voting stake in the company significantly.

After that, Icahn has more money to buy more shares. Then Icahn could do what he always does -- put himself on the board, milk the company for a quick buck, then break down and sell the company in parts.

Sounds like a lovely human being...
Score: 9 Votes (Like | Disagree)
darkplanets Avatar
153 months ago
He owns 1% of Apple. How could he put any effective pressure on the company?

Force collective share buyback through cooperation with other major shareholders. Once Apple starts buying back shares, it's non voting stock -- his percentage of voting weight therefore automatically increases. Considering how much cash reserve Apple has, shareholders could hypothetically push Apple to dump most of it on stock buyback. Icahn would win big profits-wise, and also increase his voting stake in the company significantly.

After that, Icahn has more money to buy more shares. Then Icahn could do what he always does -- put himself on the board, milk the company for a quick buck, then break down and sell the company in parts.
Score: 4 Votes (Like | Disagree)
Braniff747SP Avatar
153 months ago
Sounds like a lovely human being...


He was instrumental in the demise of TWA, so he definitely isn't on my favorites list.
Score: 3 Votes (Like | Disagree)
Makosuke Avatar
153 months ago
Guys like Icahn force the ownership to focus on the stockholders. In some cases he buys a majority share and the stockholders become HIM, but the other stockholders make out nicely.
The points you make about executive excess and the value of "corporate maggots" are valid, but it's worth noting that "what's best for the stockholders" is often a very short-term and narrow view, because stockholders are fickle and easily swayed by short-term fluctuations in stock price that have no real meaning in terms of actual corporate health or the value of the corporation for society as a whole.

Phrased differently, if you're a shareholder, you want to see your shares increase in value steadily and constantly, or see a steady stream of dividends. If there's a bump, you as a shareholder might, in your own short-term best interest, attempt to get the company to do something to increase its stock value. Viewed in the long term, however, that short-term gain might be disastrous, while the dip might be part of a large-scale plan that will take years to play out.

Case in point: Way back when, in the early Steve Jobs return era around Y2K, Apple stock skyrocketed to around $30 in modern share terms (prior to a couple of splits, so it was $120 at the time if memory serves). A bit later, it crashed for no particularly good reason to about a quarter of that and stayed there for over two years.

If you're a shareholder with a lot of control over the company, you might freak out after two years of this "mismanagement" and fire the CEO (Steve Jobs) and the guys under him, because between 2001 and 2003 the stock you payed $120 a share for is STILL only worth a quarter of that, so they obviously must be incompetent.

In reality, that period was the start of the iPod era and a long term plan that turned the company into the largest and most profitable company in the world, and (if you sold at the 2012 peak) would have given you a 2,500% return on investment (or, if you had bought in at the bottom, a ~10,000% increase). A period during which the shareholders were almost completely ignored, and there were almost no executive changes.

This isn't to say that shareholders are always wrong--there are PLENTY of overpaid, overconfident, incompetent CEOs in the world--but what is best for them is not always what's best for the company. Or, ironically, even what's best for them if they're long term investors.
Score: 3 Votes (Like | Disagree)
Gasu E. Avatar
153 months ago
Sounds like a lovely human being...

I'm not sure guys like Icahn are such a bad thing. Large company executives often run the company as much for their own benefit as for the benefit of the stockholders. You guys all know this-- one of the symptoms is the excessive amount so many CEOs pay themselves. The only way to mitigate this is stockholder pressure. Unfortunately in many cases outside ownership is too diffuse to have any real power. Guys like Icahn force the ownership to focus on the stockholders. In some cases he buys a majority share and the stockholders become HIM, but the other stockholders make out nicely.

Someone mentioned LBOs, but Icahn has made hundreds of investments and only a few have been LBOs. Generally these were sick companies that held on too long or were badly mismanaged. Sometimes the best thing to do with a big company is to return the value to the stockholders, fire the execs and sell the assets to someone who can use them more productively, actually creating more jobs in the process.

Icahn is not altruistic and is not a nice man. Sometime the execs choose to pay him to leave, rather than fix the problems caused by their own incompetence and give up their own perks. He gladly takes this money! But the problem should be laid on the execs, not Icahn.

Guys like Icahn are rightfully considered to be the maggots or vultures of capitalism. Like maggots, they are ugly. But they also recycle dead flesh into useful elements that can be recycled into new growth.
Score: 3 Votes (Like | Disagree)
ValSalva Avatar
153 months ago
Though Icahn has been infamously know for such reputation, I think he. bought Apple stock solely for profiteering.

Well yes. Everything Icahn does is for profit. It's just how he makes his profit that can sometimes be destructive. He can't destroy Apple because it's too big even for him. But if he could destroy Apple for a profit he would in a heartbeat.
Score: 3 Votes (Like | Disagree)

Popular Stories

Mayday Calendar

Apple Acquisition Hints at Upgraded Calendar App on iOS 19 or Beyond

Friday May 9, 2025 9:13 am PDT by
Apple acquired Canadian startup Mayday Labs in April 2024, according to a European Commission listing, spotted by French blog MacGeneration. The acquisition had not received widespread attention from tech publications until now. Apple is legally required to report certain acquisitions to the European Commission, under the terms of the EU's Digital Markets Act. Mayday Labs founder Jeremy...
Nineth iOS 19 Feature

iOS 19 Beta is a Month Away With These New Features for Your iPhone

Thursday May 8, 2025 7:37 am PDT by
The first iOS 19 beta is just one month away, and there are already many new features and changes that are expected with it. Apple should seed the first iOS 19 beta to developers immediately following the WWDC 2025 keynote, which is scheduled for Monday, June 9. Following beta testing, the update should be released to the general public in September. Below, we recap the key iOS 19 rumors...
fortnite apple featured

Epic Games Submits Fortnite to U.S. App Store

Friday May 9, 2025 9:57 am PDT by
As promised, Epic Games today submitted Fortnite to the U.S. App Store, and if approved by Apple, it will mark the first time that the Fortnite app has been available in the United States since 2020. Fortnite will include options to purchase in-app currency from the web rather than through in-app purchase, which is what got the game banned to begin with. This time, though, Apple has been...
iOS 18

Here Are Apple's Full iOS 18.5 Release Notes

Tuesday May 6, 2025 2:17 pm PDT by
Apple today seeded the release candidate version of iOS 18.5 to developers and public beta testers, giving us a look at the final version of the update that will be provided to the public next week. With the release candidate, Apple provided release notes, so we have a more complete look at the new features that are included in the update, including those that weren't found during the beta...
AirPods Pro 3 Mock Feature

AirPods Pro 3 Just Months Away – Here's What We Know

Tuesday April 29, 2025 1:30 am PDT by
Despite being more than two years old, Apple's AirPods Pro 2 still dominate the premium wireless‑earbud space, thanks to a potent mix of top‑tier audio, class‑leading noise cancellation, and Apple's habit of delivering major new features through software updates. With AirPods Pro 3 widely expected to arrive in 2025, prospective buyers now face a familiar dilemma: snap up the proven...
top stories 2025 05 10

Top Stories: iOS 18.5 Release Imminent, iPhone Rumors for 2025 and Beyond, and More

Saturday May 10, 2025 6:00 am PDT by
With Apple's developer conference where it will show off iOS 19 just a month away, the company is wrapping up work on iOS 18.5 ahead of an imminent release to deliver a few new features and updates. This week also saw a number of iPhone-related rumors, encompassing not only this year's iPhone 17 lineup but also Apple's plans for 2026 and 2027, even as Apple's Eddy Cue suggested AI could make ...
iPhone 17 Pro Blue Feature Tighter Crop

WSJ: Apple Weighing Price Hikes for iPhone 17 Lineup Without Blaming Tariffs

Monday May 12, 2025 3:36 am PDT by
Apple is considering raising prices for its upcoming iPhone 17 models set to release this fall, according to people familiar with the matter cited by The Wall Street Journal. The company reportedly aims to pair the potential price hikes with new features and design changes to justify the increased cost to consumers, rather than attributing them to U.S. tariffs on goods from China. The...