Carl Icahn Posts Response to Apple On Proxy Proposal for Share Buyback, Buys $500 Million More in Stock
Several weeks ago, Apple filed a statement with the SEC advising shareholders to vote against activist investor Carl Icahn's non-binding "advisory" share buyback proposal from early December.
The proposal will be voted on by shareholders at Apple's stockholder's meeting, to be held at Apple's headquarters at some point in the next couple of months. Today, Icahn published a seven-page letter to shareholders advocating for a yes vote on its proposal.
He also announced that he purchased another $500 million in Apple stock today, bringing his cumulative total to $3.6 billion. Just yesterday, Icahn revealed that he had surpassed $3 billion in AAPL ownership. He also stated on CNBC that his criticism was reserved for Apple's board of directors, not its management.
In the letter, Icahn explains his belief that Apple's stock is a "no brainer" to purchase, and that Apple's board should be supportive of a significant increase in Apple's share repurchase program. He argues that Apple's stock -- currently priced at $555 -- would be priced at $840 if its price to earnings ratio was the same as the average P/E across the S&P 500.
We believe, however, that this share repurchase authorization can and should be even larger, and effectuating that for the benefit of all of the company’s shareholders is the sole intention of our proposal. The company has recommended voting against our proposal for various reasons. It seems to us that the basis of its argument against our proposal is that the company believes, because of the “dynamic competitive landscape” and because its “rapid pace of innovation require[s] unprecedented investment, flexibility and access to resources”, it does not currently have enough excess liquidity to increase the size of its repurchase program. Assuming this indeed is the basis for the company’s argument, we find its position overly conservative (almost to the point of being irrational), when we consider that the company had $130 billion of net cash as of September 28, 2013 and that consensus earnings are expected to be almost $40 billion next year. Given this massive net cash position and robust earnings generation, Apple is perhaps the most overcapitalized company in corporate history, from our perspective.
The full letter is
available from the SEC and comes ahead of Apple's
first quarter earnings report, scheduled for Monday afternoon. The company is expected to report the strongest results for any quarter in its history.
Popular Stories
Apple today seeded the second release candidate versions of upcoming iOS 18.2, iPadOS 18.2, and macOS 15.2 updates to developers and public beta testers for testing purposes, a week after releasing the first RCs. The first iOS 18.2 RC had a build number of 22C150, while the second RC's build number is 22C151. Release candidates represent the final version of beta software that's expected to see a ...
The next iOS 18.2 update featuring more substantial Apple Intelligence features will be released to the public before the holidays, according to Apple, but we have a more definite timeframe from other sources.
In a newsroom article dated October 28 highlighting Apple Intelligence capabilities, Apple states that "new Apple Intelligence features will be available in December." Then in...
Apple's forthcoming iPhone SE 4 will feature a single 48-megapixel rear camera and a 12-megapixel TrueDepth camera on the front, according to details revealed in a new Korean supply chain report.
ET News reports that Korea-based LG Innotek is the main supplier of the front and rear camera modules for the more budget-friendly ~$400 device, which is expected to launch in the first quarter of...
Apple seeded the release candidate version of iOS 18.2 today, which means it's going to see a public launch imminently. Release candidates represent the final version of new software that will be provided to the public should no last minute bugs be found, and Apple includes release notes with the RC launch.
The iOS 18.2 release notes provide a look at all of the new features that are coming...
Apple plans to remove the notch from the MacBook Pro in a few years from now, according to a roadmap shared by research firm Omdia.
The roadmap shows that 14-inch and 16-inch MacBook Pro models released in 2026 will have a hole-punch camera at the top of the display, instead of a notch. It is unclear if there would simply be a pinhole in the display, or if Apple would expand the iPhone's...
Apple is set to release iOS 18.2 in the second week of December, bringing the second round of Apple Intelligence features to iPhone 15 Pro and iPhone 16 models. This update brings several major advancements to Apple's AI integration, including completely new image generation tools and a range of Visual Intelligence-based enhancements. There are a handful of new non-AI related feature controls...
Norwegian payment service Vipps has become the world's first company to launch a competing tap-to-pay solution to Apple Pay on iPhone, following Apple's agreement with European regulators to open up its NFC technology to third parties.
Starting December 9, Vipps users in Norway can make contactless payments in stores using their iPhones. The service initially supports customers of SpareBank...
In 2025, Apple is planning to debut a thinner version of the iPhone that will be sold alongside the iPhone 17, iPhone 17 Pro, and iPhone 17 Pro Max. This iPhone 17 "Air" will be about two millimeters thinner than the current iPhone 16 Pro, according to Bloomberg's Mark Gurman.
The iPhone 16 Pro is 8.25mm thick, so an iPhone 17 that is 2mm thinner would come in at around 6.25mm. At 6.25mm,...
Despite being released over two years ago, Apple's AirPods Pro 2 continue to dominate the wireless earbud market. However, with the AirPods Pro 3 expected to launch sometime in 2025, anyone thinking of buying Apple's premium earbuds may be wondering if the next generation is worth holding out for.
Apart from their audio and noise-canceling performance, which are generally regarded as...
