Carl Icahn Asks for Accelerated Stock Repurchase Program in Letter to Apple's Tim Cook

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Original poster
Apr 12, 2001
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In a letter addressed to Tim Cook today, activist investor Carl Icahn praises Apple for its innovation, while again asking the company to accelerate its stock repurchase program. Icahn previously pressured Apple to increase its stock buyback program to as much as $150 billion, but dropped that bid following Apple's decision to repurchase $14 billion shares in February of this year.

Icahn continues to note that Apple is "dramatically undervalued in today's market" with its shares trading at half of Icahn's estimated $203 value. This valuation is likely to change as Apple's new product lineup chips away at Android's market share.
While we recognize and applaud the company's previously increased share repurchase authorization, we ask you to consider our advice once again (to the benefit of all shareholders) and consider accelerating share repurchases again via a tender offer. Our valuation analysis tells us that Apple should trade at $203 per share today, and we believe the disconnect between that price and today's price reflects an undervaluation anomaly that will soon disappear.
Icahn calls Apple's new iPhone models "best in class" and applauds Apple for growing its mobile ecosystem of services that surround the handset, including Apple Pay, HealthKit, and more.
Beyond simple price comparison, we see the iPhone as best in class, supported by expert reviews and by the lines of people all over the world waiting to buy it. Perhaps most importantly, we believe the iPhone will take market share because its merits are no longer viewed in isolation from the overall Apple ecosystem of products and services, which include iOS, iPad, Mac, Apps, App Store, iCloud, iTunes, and (more recently) Apple Watch, Apple Pay, Home, Health, Continuity, Beats. With the iPhone as the foundation, Apple's ecosystem has come to play an important role in the daily life of Apple users, and while Apple continues to make impressive strides to improve it, the competition falls behind in what is arguably the most important race of this technological era.
For its part, Apple has acknowledged Icahn's letter but given no indication on its plans for the future beyond its current policy of reviewing the capital return program on an annual basis.
We always appreciate hearing from our shareholders. Since 2013 we've been aggressively executing the largest capital return program in corporate history. As we've said before, we will review the program annually and take into account the input from all of our shareholders.
Icahn disclosed last year that his holding company had taken a large position in Apple with Icahn now owning 53 million shares of AAPL. Icahn's note follows Apple's April announcement of an increased stock repurchase program that authorizes the purchase of up to $90 billion in stock and a 7:1 stock split that was instituted in June 2014. As part of its capital return program, Apple pledged to return more than $130 billion to shareholders by the end of 2015.

Article Link: Carl Icahn Asks for Accelerated Stock Repurchase Program in Letter to Apple's Tim Cook
 

MacSince1990

macrumors 65816
Oct 6, 2009
1,347
1
Every one of his pictures makes me want to punch this guy in the face.

So tired of hearing about this bullying prig.
 

keysofanxiety

macrumors G3
Nov 23, 2011
9,537
25,262
Can't stand this guy. He's a microcosm for everything cancerous about Western civilisation.
 

Vol7ron

macrumors 6502
Jun 11, 2009
281
189
Derry, NH
At least Macrumors used a different picture of him...

I cant stand this guy and listening to him complain about what he wants Apple to do...
 

MacSince1990

macrumors 65816
Oct 6, 2009
1,347
1
And here I was thinking I'd have a good day. That mug can ruin anyone's mood.
So true LOL! And look at those nails. Jesus. I've literally noticed a total of maybe three other guys' fingernails in my life, and his are just.... he looks like a male witch.
 

OldSchoolMacGuy

Suspended
Jul 10, 2008
4,197
9,050
Why does Icahn think they care? They've shown that they don't have any interest in doing what he says each time. :rolleyes:
 

paul55br

macrumors member
Feb 23, 2012
67
43
Too risky Carl. Apple is on its way to keep raising their shares as most of walstreet now realizes that in the post-Jobs era, Apple is still Apple - releasing great products and new product lines.
 

longofest

Editor emeritus
Jul 10, 2003
2,836
1,352
Falls Church, VA
Let me rephrase that for you:

"Accelerate the repurchasing of your stock to drive the price up faster so I can sell my shares faster and make my $ faster. I really don't care about the company's long term prospects"

There you go.
 

JHankwitz

macrumors 68000
Oct 31, 2005
1,907
58
Wisconsin
But, he has 5.3 billion dollars worth of stock. Because of this, he owns a big chunk of Apple, and as a majority owner, Apple has to at least listen.
 
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TallManNY

macrumors 601
Nov 5, 2007
4,347
1,202
Well

I have to say I agree with Icahn. Apple seems undervalued to me. The iPhone is the best in class and I agree that the smartphone market is the most important piece of technology. I also think that Apple is dominating that market and will continue to do and its dominance is on the the assent.

Icahn has been right about these stock buy backs for years now. Apple and their shareholders would have gotten a fantastic return if Apple had followed his advice more whole heartedly over the last few years. Now Apple has a continuing growing stockpile. The supper successful iPhone launch (one in which people are not recognizing will include sales at a much higher price point and probably higher margins (more people will buy the 64 GB 6 and the 6+, then in the 5s launch where the most common phone sold was probably the 16gb version)) is going to add tens of billions to this cash pile over the next two quarters.
 

spyguy10709

macrumors 6502a
Apr 5, 2010
898
332
One Infinite Loop, Cupertino CA
This isn't a popular opinion around here, but shareholders own the company. Apple is worth more than 610 billion dollars. They're virtually printing money, and their future growth is going to be incredible. He's doing a good thing in the long run - with more value in the company, Apple can purchase more/larger corporations. When a company buys another, it's rarely done in terms of cash. It's done in stock. Under Icahn's projections, Apple would be worth over 1.4 Trillion dollars. That would allow them to acquire really, really big name players.

Apple truly owes money to the shareholders... because they own Apple... If the company does well, and is just sitting on a pile of cash, it is really their responsibility to give it back...

edit : Think - if they bring their stock up to a fair value, buying one of the big 2 US Cell carriers wouldn't be a problem. Or buying literally every cable company in the USA...
 
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cleirac

macrumors 6502
May 7, 2014
465
0
Fast Forward to 10/16/2014 Apple Keynote

Tim Cook: One more thing ... Carl Icahn, ****, stick your money in your *** and go away!
 

macaron95

macrumors regular
May 5, 2014
216
12
the vampire just woke up again this quarter... :confused:

this guy is truly annoying, i was wondering if Tim Cook could lose his temper and tell him to get the **** off ?
 

Karma*Police

macrumors 68000
Jul 15, 2012
1,891
1,382
Too risky Carl. Apple is on its way to keep raising their shares as most of walstreet now realizes that in the post-Jobs era, Apple is still Apple - releasing great products and new product lines.
You'd never know it by the number of trolls commenting on these boards and the media hopping on any negative Apple news, no matter how minor (true or not), for more eyeballs.
 

rmatthewware

macrumors 6502
Jul 22, 2009
493
126
Carl Icahn, destroyer of once great companies. He's trying to ride eBay into extinction and he'd love to milk Apple to death. I wonder what the funeral of a man like that is like. Great Gatsby? He's 78, maybe he'll go away soon.
 

thekeyring

macrumors 68040
Jan 5, 2012
3,441
2,075
London
Even if Apple only had 10% of it's cash reserves - $16,000,000,000 - it could still make a loss of $100,000,000 a year for 160 years. So yeah, it probably does have more money than it needs. It wouldn't hurt to reward investors where possible.
 
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