Carl Icahn Posts Response to Apple On Proxy Proposal for Share Buyback, Buys $500 Million More in Stock

carl_icahn_potraitSeveral 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.

Top Rated Comments

JayLenochiniMac Avatar
98 months ago
Can MR at least not post that photo of him?
Score: 48 Votes (Like | Disagree)
Daalseth Avatar
98 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.
Score: 18 Votes (Like | Disagree)
JackieTreehorn Avatar
98 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.
Score: 16 Votes (Like | Disagree)
mozumder Avatar
98 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.
Score: 13 Votes (Like | Disagree)
2457282 Avatar
98 months ago
Mac Rumors, PLEASE, PLEASE, PLEASE..... use a different picture. The one you keep using is creepy.
Score: 11 Votes (Like | Disagree)
MTL18 Avatar
98 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...
Score: 11 Votes (Like | Disagree)

Top Stories

General Apps Messages

All Three Major U.S. Carriers and Google Adopt Rich Communication Services, But No Sign of Apple Interest

Tuesday July 20, 2021 1:15 pm PDT by
For the last several years, Google has been pushing a new communications protocol called Rich Communication Services, or RCS. RCS is designed to replace SMS, the current text message standard, and it offers support for higher resolution photos and videos, audio messages, bigger file sizes, better encryption, improved group chat, and more. Verizon today announced that it is planning to adopt...
AirPods Pro Beta Firmware

AirPods Pro Beta Firmware Now Available

Wednesday July 21, 2021 6:50 am PDT by
Upcoming AirPods Pro firmware updates are now available to Apple Developer Program members as beta versions. AirPods Pro firmware beta one features FaceTime Spatial Audio and Ambient Noise Reduction. Custom Transparency mode, including Conversation Boost, was initially expected to be included in the beta but appears to have been delayed for a later version. Apple made the announcement...
maxresdefault

Apple Music to Livestream Premiere of Kanye West's New Album 'Donda' on Thursday

Wednesday July 21, 2021 1:49 am PDT by
Apple Music on Thursday will host a global livestream for the premiere of Kanye West's tenth studio album, titled "Donda." The sold-out event will take place at the Mercedes-Benz Stadium in Atlanta, Georgia, and Apple Music's livestream will start at 8:00 p.m. Eastern Time. The livestream was revealed in a Beats Studio Buds ad that aired during the NBA Finals. The ad features U.S. track...
ios wifi settings

Apple Confirms iOS 14.7 Fixes WiFi Bug and Many Other Vulnerabilities

Wednesday July 21, 2021 11:38 am PDT by
Following the release of iPadOS 14.7 this morning, Apple has shared details on the security updates that are included in iOS 14.7, iPadOS 14.7, macOS Big Sur 11.5, watchOS 7.6, and tvOS 14.7, all of which came out this week. Notably, Apple's documentation confirms that the iOS 14.7 and iPadOS 14.7 updates address a WiFi-related vulnerability that could impact iOS devices when joining a...
16 inch macbook pro m2 render

Gurman: Redesigned MacBook Pros to Launch Between September and November

Sunday July 18, 2021 7:39 am PDT by
Apple can be expected to release its redesigned 14-inch and 16-inch MacBook Pros sometime between September and November, as part of another packed fall season for new product launches, according to Bloomberg journalist Mark Gurman. In the latest edition of his Power On newsletter, Gurman says that the new MacBook Pros will go into production in the third quarter and can be expected to be...
macOS Malware Feature

Common Windows Malware Can Now Infect Macs

Wednesday July 21, 2021 8:13 am PDT by
A common form of malware on Windows systems has been modified into a new strain called "XLoader" that can also target macOS (via Bleeping Computer). Derived from the Formbook info-stealer for Windows, XLoader is a form of cross-platform malware advertised as a botnet with no dependencies. It is used to steal login credentials, capture screenshots, log keystrokes, and execute malicious files. ...
magsafe battery pack solo

Hands-On With Apple's MagSafe Battery Pack

Tuesday July 20, 2021 11:14 am PDT by
The new MagSafe Battery Pack that Apple debuted this week is arriving to customers starting today and it's also now available for in-store pickup in many Apple retail locations around the world. We snagged one this morning and thought we'd take a look at it to let MacRumors readers know if it's worth the $99 asking price. Subscribe to the MacRumors YouTube channel for more videos. As the name ...
macOS Big Sur Feature Orange

Apple Releases macOS Big Sur 11.5 With Podcast App Updates and Bug Fixes

Wednesday July 21, 2021 10:15 am PDT by
Apple today released macOS Big Sur 11.5, the fifth major update to the macOS Big Sur operating system that launched in November 2020. macOS Big Sur 11.5 comes two months after the release of macOS Big Sur 11.4. The new ‌‌‌‌‌macOS Big Sur‌‌‌‌ 11.5 update can be downloaded for free on all eligible Macs using the Software Update section of System Preferences. macOS Big Sur...
apple tv 4k design green

Apple Releases tvOS 14.7 for Apple TV HD and Apple TV 4K

Monday July 19, 2021 10:04 am PDT by
Apple today released tvOS 14.7, the seventh update to the tvOS 14 operating system that initially debuted in September 2020. tvOS 14.7 comes two months after the launch of the tvOS 14.6 update. tvOS 14.7, which is a free update, can be downloaded over the air through the Settings app on the Apple TV by going to System > Software Update. ‌‌Apple TV‌‌ owners who have automatic software ...
ipad pro m1 feature

Apple Releases iPadOS 14.7 With Apple Card Merging Option, Fix for 3.5mm Headphone Jack to USB-C Adapter Bug

Wednesday July 21, 2021 10:18 am PDT by
Apple today released iPadOS 14.7, marking the seventh major update to the iPadOS operating system that came out in September 2020. Apple already released iOS 14.7 on July 19, but for some reason, delayed the iPadOS 14.7 debut until today. The iPadOS 14.7 update can be downloaded for free and the software is available on all eligible devices over-the-air in the Settings app. To access the new ...