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

uwdude said:
Number 1, Mr. Icahn just wants to pump up the stock price so he can sell and profit. That's his MO. Get lost, Carl.

Number 2, Mr. Icahn yes is a large shareholder. However, in order for him to actually have any power, he would have to be able to convince a large group of other shareholders representing a much larger percentage of the stock to go along with what he wants and force a vote on the matter. This isn't going to happen any time soon. So again, get lost Carl.

And finally Number 3, Apple uses that huge cash hoard to put its weight behind things and get what they want. Like pre-purchasing stocks of silicon, raw materials, buying Beats, etc. Other companies know Apple can just buy whatever it wants or go someplace else, and that gives Apple a lot of power in the marketplace. So no I'm not for distributing most of the cash to people like Icahn. So again 2x, get lost Carl.
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Point three I disagree with. I don't think having $166B gives Apple anymore weight in the marketplace than if it had $50B. It can do all those things you mention with a fraction of the $50B. Also banks would open up working capital lines at near zero interest for Apple in heartbeat.

And iPhone 6 is a huge success. So huge amounts of more cash is coming. Tidal waves of it.
 
Typical American business attitude. He looks to maximize his short term gains to the detriment of the company and the product. Suck the company dry and bail out with a golden parachute.

Notice he said nothing about how to improve Apple's products or sales. It's all about him. How does Apple jack the value of his shares. How does he profit from Apple's giant cash horde?

Cook is a sharp fellow, he'll know what to tell this arsehole to go do to himself.
 
We need a moratorium on stories including this guy, I'm so sick of hearing about his plots to manipulate Apple Stock so he can kill all the Jedi, destroy the republic, and then crown himself Emperor of the first Galactic Empire.
 
TallManNY said:
If Icahn keeps buying more Apple and if Apple "dips" to any significant degree, then these dips will make Icahn's fund look like it has lost money. Then investors won't pay the huge premium necessary to invest through Icahn's fund. Then Icahn won't have new money to buy Apple's stock in significant volume.

There just isn't any real world path to 51% control of a $600 billion publicly traded company that you are envisioning.
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The dips happen daily — trading is computerized these days — and he can use the money he makes on these trades (and on the dividends) to buy more of the stock. I'm not saying it's imminent, but it's something to be wary of.

Look at the influence he has now, with less than 1%, and imagine the damage he'll do if he gets to 10%, let alone 51!
 
mackinmike said:
If the old man is so confident the price will go to 203, then double down on the amount of shares he owns.. Put ur money where ur mouth is. Total manipulation .. The rich get richer
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Icahn doesn't have another $6 billion of investor money to put into Apple. The guy and his funds are not that rich that a billion dollars is nothing to them. He has a huge position. He just thinks he could get richer in a very short period of time if the Apple board would do what he says. And he might be right.

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cwt1nospam said:
The dips happen daily — trading is computerized these days — and he can use the money he makes on these trades (and on the dividends) to buy more of the stock. I'm not saying it's imminent, but it's something to be wary of.

Look at the influence he has now, with less than 1%, and imagine the damage he'll do if he gets to 10%, let alone 51!
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Icahn and his fund is not a computer day trading fund. That isn't his MO and there is no reason to think he and his fund would be better at this than the funds that do nothing but high frequency day trading.

He isn't getting to 51%. Let's just take that off the table. I think a 10% position is incredibly unlikely. But I will agree with you, if he got there and that level isn't inconceivable, it could happen, he would then have a lot of influence. He might even get himself elected to the Board. I don't think he has done damage or would do damage, but yes if Apple were to do a $100 billion tender offer (which is about the most Apple could conceivably do), and Icahn didn't tender any shares, then yes he could be at 1.5% or 2% (assuming he bought more) by the end of the offer. And if you think he is damaging to companies, then he would probably have more influence as a 2% shareholder and hence could do more damage.
 
Here's the thing:
Good idea or not- they can't do anything this dbag suggests. As he's shown... give him an inch & he'll take a mile.
He is a bullying jerk and hopefully he sells off soon. Until then, he'll armchair CEO vocally and be a constant annoyance.
 
cwt1nospam said:
Look at the influence he has now, with less than 1%, and imagine the damage he'll do if he gets to 10%, let alone 51!
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As has been explained to you ad nauseam, there is NO REALISTIC SCENARIO by which he would have 51% of outstanding shares.

The damage he'll do? What is everyone talking about in this thread? It boggles my mind every single time a finance story makes it to the front page.

Here are the facts:

1: Apple has more cash than it could ever profitably deploy (investing in projects that earn a return in excess of its cost of capital)

2: They have been growing this cash pile for ten years (meaning the cash you're seeing on the balance sheet has not been used)

3: Apple is not a private company. It is owned by the common shareholders, of which Icahn is a significant one.

Here's an accurate analogy that captures what everyone here is saying if they are against Icahn's proposal:

You go to Best Buy and you want a great TV. The TV you want costs $1,500 but they charge you $2,250. In the box is a TV that is worth $1,500 and then $750 in cash in a secure box. The cash is in your possession, and is yours legally, but you can't take it out of the box because Best Buy management has the key. It just stays there until who knows when. The TV and Best Buy management keep insisting that the cash needs to stay in the box (meaning you can't use it) even though they have absolutely no use for it as demonstrated by them not needing excess cash for ten years. You are all advocating on behalf of this twisted arrangement.

Icahn's point is very simple. Open the box and give the owners of the money the cash you aren't using (increase buybacks) and try to slow down the amount of money you shield from the shareholders as you make more of it in the future (increase dividends).

If you, like Icahn, believe that Apple is undervalued then increasing the buyback is a value-generating activity. Period.


The way people dismiss arguably the greatest investor of all time as a parasite that should die (seriously, listen to yourselves people) when he is putting billions of his own money into the same securities that normal retail investors own is pathetic. I would be ecstatic if he invested in a company I had an investment in. He's that good.
 
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See THIS is one of the major systemic problems with capitalism in the USA! Parasitic old and and soon to be dead billionaires who do nothing but create wealth for themselves that they'll never be able to spend in thousand lifetimes. It's an inhuman and extreme form of greed that needs to be reduced, by any means necessary.
 
Badandy said:
If you, like Icahn, believe that Apple is undervalued then increasing the buyback is a value-generating activity. Period.


The way people dismiss arguably the greatest investor of all time as a parasite that should die (seriously, listen to yourselves people) when he is putting billions of his own money into the same securities that normal retail investors own is pathetic. I would be ecstatic if he invested in a company I had an investment in. He's that good.
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He'S not "an important one", he is a parasitic leach and his opiniojn is no more important than the other 99%. Yet, we hear is senile rambling ad nauseum.
 
Badandy said:
The way people dismiss arguably the greatest investor of all time as a parasite that should die (seriously, listen to yourselves people) when he is putting billions of his own money into the same securities that normal retail investors own is pathetic. I would be ecstatic if he invested in a company I had an investment in. He's that good.
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It's a fair guess that most of the posters who denigrate Carl Icahn don't have any of their own money invested in AAPL. Any who does would have to notice the positive impact his comments have on the stock price.
 
Keirasplace said:
He'S not "an important one", he is a parasitic leach and his opiniojn is no more important than the other 99%. Yet, we hear is senile rambling ad nauseum.
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If you have no desire to address your own ignorance or back up your statements with anything more than trite parasite comparisons then it's not worth engaging in a discussion. *shrug*. Oh well.
 
rGiskard said:
Typical American business attitude. He looks to maximize his short term gains to the detriment of the company and the product. Suck the company dry and bail out with a golden parachute.

Notice he said nothing about how to improve Apple's products or sales. It's all about him. How does Apple jack the value of his shares. How does he profit from Apple's giant cash horde?

Cook is a sharp fellow, he'll know what to tell this arsehole to go do to himself.
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Except that Cook has pretty much done everything Icahn has asked for.
 
JeffyTheQuik said:
Shareholder Equity

Shares Outstanding 6.0 B
Institutional Ownership 58.36%
Number of Floating Shares 6.0 B
Short Interest as % of Float 2.31%

(Source: E*Trade)

Carl's amount: 53M, or 0.83% of the shares. Is he a small investor?
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Yes, I meant outstanding shares. Most independent shareholders own nothing close to Icahn's holding, so, no, he is not a small investor. Looking at Apple's typical daily volume, if Icahn dumped his shares the day after Apple did a huge buyback it would be equivalent to an entire day's trading volume of only sells. You don't think that will have a big negative effect on the price??
 
Buy back More, Faster, Make Me Money

This is short sighted and an accelerated buyback will do nothing but make Apple stock increase so he can sell and make more money.

Stock buy back programs for companies should buy when the market takes a significant dip, so they can buy back on the low.

A company should never advertise it's immediate buyback plans.

Icahn is a greedy manipulative scumbag.
 
puma1552 said:
this asshat is front page news *again*?

if i were cook id ignore him
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cleirac said:
Fast Forward to 10/16/2014 Apple Keynote

Tim Cook: One more thing ... Carl Icahn, ****, stick your money in your *** and go away!
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You guys feel better now? While there are tactics to encourage or otherwise incentivize vulture investors to go away, generally those with a significant ownership are in a far better position to tell the employees (including the CEO) to "go away" than vice-versa.

And CEO's "ignore" crafty "Raiders of the lost off-shore cash cache" at their own peril....

OldSchoolMacGuy said:
Why does Icahn think they care? They've shown that they don't have any interest in doing what he says each time. :rolleyes:
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...and then they've gone and done part of it...

Meanwhile - while I wish he'd go find another target and he's not on my holiday card list - if you want to understand why there are a variety of "iCahns" in the markets, it's worth acknowledging that in the "investment ecology" (as elsewhere in complex dynamic systems), bottom feeders do have their generally unappreciated but often useful place....
 
JHankwitz said:
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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I do not think that word means what you think it means.

spyguy10709 said:
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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It's not necessarily their responsibility to give it back. Apple has, back in its history, also been accused of just "sitting on a pile of cash". It's one of the things that let them ride out some of the worst periods in their company's history. Their cash reserve has thus served long term shareholders better than any buyback could possibly hope for.

Beyond that, it's not necessarily their responsibility to return funds in the form of a buyback, which effects share price, and thus incentivizes selling the stock, favoring short term investors over their long-term counterparts. I'd much prefer, for example, a dividend hike, at least while the tax implications for me remain the same.

prism said:
Buybacks are just cheap tricks to to jack up the stock price, no real value creation here but then again, the works of a vulture.
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The one thing they *can* do is reduce a company's dividend obligations, which can be handy. Intel, for example, saved money in their last buyback.

TallManNY said:
It is actually Apple's responsibility to make money for its shareholders. Most of them are not billionaires. Apple has $166 billion in cash. I predict this is going to increase quickly with the successful iPhone 6.

If you don't want stock buy backs, what should Apple do with its money? Should all the money just go to senior management? That is a possibility. Apple could pay Ivy $50 billion a year. He is a nice guy and makes nice stuff.

Or should the money just sit in bank accounts overseas and continue to earn 1% a year? Is that your proposal?
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Cash reserves to keep the company going when, as all large companies do, they hit a rocky patch. Apple's going good right now, but there is something to be said for being a bit defensive, rather than assuming they can return it to shareholders and then make it back.

Or, for that matter, a dividend increase, which returns the money without necessitating selling the stock.
 
Badandy said:
Apple has more cash than it could ever profitably deploy (investing in projects that earn a return in excess of its cost of capital)
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In which case they should return it to shareholders by way of increased dividends rather than buybacks. That way they reward loyal shareholders in it for the long term rather than rewarding quick buck parasites like Icahn.
 
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