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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.
Bought another $500mil of $AAPL tday, bringing our total to $3.6 billion. If board doesn’t see AAPL’s ‘no brainer’ value we sure do.
— Carl Icahn (@Carl_C_Icahn) January 23, 2014[ 170 comments ]
Top Rated Comments
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56 months ago
Such horrible short-term thinking by Icahn. There could be a billion other things Apple could do with that money over the long term to improve the company.
That's not what Carl Icahn is in it for. He wants dollars. He doesn't care how it impacts other investors, the companies he's investing in or even the good of the country. He's driven by greed and only exists to get more.A truly despicable SOB.
56 months ago
Apple should team up with eBay, buy up iChan's hedge funds, and dump Carl and his funds into Atlantic. Or the Pacific.
Just to tell the greedy old man who runs Apple and eBay.
Just to tell the greedy old man who runs Apple and eBay.
56 months ago
Such horrible short-term thinking by Icahn. There could be a billion other things Apple could do with that money over the long term to improve the company.
56 months ago
Carl only cares about his money, not yours or mine. He wants the buy-back for short-term price gain and a higher % ownership within AAPL...
56 months ago
Mac Rumors, PLEASE, PLEASE, PLEASE..... use a different picture. The one you keep using is creepy.
56 months ago
This guy is a complete douche.
His goal isn't the long term health of Apple, he is a shark trying to force Apple into short term thinking so he can make a quick buck.
His goal isn't the long term health of Apple, he is a shark trying to force Apple into short term thinking so he can make a quick buck.
56 months ago
Sure Carl....Apple was created just for you, so that you might get even richer. None of the other 7 billion people on this planet have any use for it. It all about YOU.
Seems to be what is wrong with our world today.....
Seems to be what is wrong with our world today.....
56 months ago
The man is doing nothing short of trying to bankrupt Apple. Apple already has a healthy dividend etc.
Buying some AAPL stocks and then saying that they should going 150 billion into debt for a stock repurchase that will only cause people like him to dump those Apple shares once he has his money and then the stock will crash.
Jobs would of told him to go to hell, Cook needs to do the same.
Oh and he now owns some Ebay shares and immediately says spin off Paypal. So what Ebay can pay paypal fees, that's why Ebay purchased them in the first place.
Buying some AAPL stocks and then saying that they should going 150 billion into debt for a stock repurchase that will only cause people like him to dump those Apple shares once he has his money and then the stock will crash.
Jobs would of told him to go to hell, Cook needs to do the same.
Oh and he now owns some Ebay shares and immediately says spin off Paypal. So what Ebay can pay paypal fees, that's why Ebay purchased them in the first place.
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