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Carl Icahn Increases Apple Stake to $2.5 Billion, Requests Immediate $150 Billion Stock Buyback

Obviously this is not a forum for finance majors, because there have been some of the stupidest comments I have ever seen here. Most companies do not hold on to much cash and most companies are in debt. Not because they aren't well run but because the are well run.

You use debt so that you can grow faster, introduce new products, go into new markets. Apple doesn't need to go into debt because they are not constrained by money, but by other outside factors. So, they pile up cash hand over fist.

Why would a company have a bunch of cash? Two reasons, they are either planning to spend it as soon as they have enough or find just the right opportunity, or they can't figure out what to do with it. Which of those do you think Apple is?

Apple has held on to the money for so long that they have demonstrated that they don't have anything to spend it on. So, that cash is not doing anything for anyone. As an investor I would say give it back to me so I can find a company who does know what to do with some cash. People complain about why APPL is low, part of it is because they have a bunch of money that they don't know what to do with. That is not good.

That's not to say Apple is not doing great, they are doing so well that they don't have opportunities to use their profits. And for those ridiculous comments like this would destroy the company, please elaborate. How does buying back stock with money that you don't know what to do with hurt Apple? And it won't just help Icahn, it will help everyone who owns Apple stock, because Wall Street will see this as responsible actions by the executives.

Before you go spouting a bunch of crap on tech forums, you better go back to business school.
 
rodpascoe said:
But are you an investor at the same level that Icahn is? Are you internationally renowned for being an investor? Is it your living?? Would you get a meeting with Tim if you requested it? I very much doubt it. This man is qualified to give advise, none of us here are.
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No, not remotely, but it doesn't matter a jot. Is he on the board no. I am very sure Peter Oppenheimer, FCO is as sick of Ichan as everyone else is.

You are not getting it, he is purely trying to lift the stock for his own benefit.

Read his bio / Wiki... He's a complete ass. Hostile takeovers, Breaking up companies. Laying off staff. Honestly He makes Gorden Gecko look like Mother Teresa

"In 1988, Icahn took TWA private, gaining a personal profit of $469 million, and leaving TWA with a debt of $540 million. In 1991, Icahn sold TWA's prized London routes to American Airlines for $445 million.[10]"

Basically Destroying TWA. FFS he was only trying to take over Dell in July!!!!!!

Please don't be under any illusion. He doesn't want anything other than to make himself money.

He's sell the company to samsung he he had the chance.
 
goobot said:
Um, yea. You shouldn't put your life savings into something that can only go down in price. That's the stupidest move you can do.
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Pump and dump schemes are not just for high priced stocks. Many a penny stock has suffered from these. So when a stock goes from $.75 to $5.25 in a week and then falls back to $.60 the little investor not in the know who thought he could afford to buy 10000 shares at $2 when it was going up like a rocket just lost $14000.
 
Icahn Math

Just so I understand this correctly:

Icahn buys lots of Apple shares relatively cheap
Wants Apple to take a loan to buy them back so that the share value goes up (manipulate the market for short term gain)
Icahn sells the shares at high value to make more money

Here is a simple solution:

Tim flips him a finger and tells Icahn to sit and spin
Icahn has heart attack and dies
Icahn can't take his fortune to the grave - no more problem
 
markdj said:
Pump and dump schemes are not just for high priced stocks. Many a penny stock has suffered from these. So when a stock goes from $.75 to $5.25 in a week and then falls back to $.60 the little investor not in the know who thought he could afford to buy 10000 shares at $2 when it was going up like a rocket just lost $14000.
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"You keep usin tha word. I don thing it means wha you thing it means."

"Pump and dump" is a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price.

Not what's happening here, but thanks for playing.
 
markdj said:
Pump and dump schemes are not just for high priced stocks. Many a penny stock has suffered from these. So when a stock goes from $.75 to $5.25 in a week and then falls back to $.60 the little investor not in the know who thought he could afford to buy 10000 shares at $2 when it was going up like a rocket just lost $14000.
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No they lost 1500$ and the price would likely go back up.
 
what's wrong with $100B buyback over 3 yrs?
It'll still leave $50B cash which is still enough for Apple to run operations even if they go into a slump. It'll also be enough for apple easily jump on any acquisition opportunities that comes up. If that $50B does grows significantly (7% EBIT) before the stock prices rises, then they can always re-plan and buy back more.

The $100B will take roughly 180-200M shares off the market, saving APPL from issuing $2.4B in dividends. That money can be used to finance the $3B in annual interest.

.
 
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jdguggs10 said:
Correct. And Icahn is right. I even agree with him about financing this with debt.
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The problem is that you cannot predict income and cash-flow of consumer product companies like Apple too far into the future. There is too much uncertainty as other companies in this sector have shown in the past. That is why AAPL trade seemingly undervalued right now. It makes sense to keep a balance sheet that is not too lean when you are operating in this environment. Now, Apple certainly has more cash on hand than needed. But to throw it all out while being in a major product transition (iOS7) would be very unwise. Apple has different shareholders. Some of them are looking for long-term returns. If all investors were like Icahn a company like Apple could never have been built because short-term targets are a killer to all long-term strategies.
 
This is what is wrong with Wall Street

Apple. Please tell this man to go pound sand. He is what is wrong with Wall Street.

This is like someone demanding that you take out a home equity loan and pay them today, leaving you with the payments. Screw that. If Apple feels safer and stronger being debt free and having some savings in the bank, then great. Good for them.

Too many companies have been driven in to the ground because asshats like Icahn leave them them burdened with debts and no savings, meaning they can't survive the smallest revenue or profit loss.
 
Szamot said:
Just so I understand this correctly:

Icahn buys lots of Apple shares relatively cheap
Wants Apple to take a loan to buy them back so that the share value goes up (manipulate the market for short term gain)
Icahn sells the shares at high value to make more money

Here is a simple solution:

Tim flips him a finger and tells Icahn to sit and spin
Icahn has heart attack and dies
Icahn can't take his fortune to the grave - no more problem
Click to expand...

What's wrong with pushing Apple's stock price up? I think everyone agrees that it is severely undervalued. Do you think that it's going to drop immediately after Icahn sells his stock? This is a semi-permanent fix to the poor asset to debt ratio that Apple has. Any correction to the price will be long term.
 
Naaaaak said:
"Spend *all* of your money on shares so I can get rich quick."

That Tim Cook even entertains this guy with a meeting is a waste of time.

What do you think happens when it doesn't happen? He sells and converts those long positions to shorts? He tries to rally a bunch of other shareholders to his cause? It will be fun watching this blowhard get trolled.
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Exactly! It's completely obvious that Ichan is doing this to make a quick buck. He is not in it for a long haul and has zero interest in Apple's health as a company. I'm sure Cook will ignore him just as he should.
 
prowlmedia said:
Read his bio / Wiki... He's a complete ass. Hostile takeovers, Breaking up companies. Laying off staff. Honestly He makes Gorden Gecko look like Mother Teresa
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Actually Mother Teresa was a total douche too. Only 7% of what she collected in donations went to the poor, the rest was given to the Vatican, she also only few 1st class.
 
IJ Reilly said:
A major stockholder?



Someone needs remedial training in Stock Market 101: buying and selling, it's what makes stocks go up and down.
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Really? You think so? Any other words of wisdom, oh great one?

I'm so glad I have you to guide me.
 

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benh911f said:
I know pretty much nothing about the stock market, so can someone explain to me how all this is not some type of tampering (Not sure of the technical term)? First, to broadcast the fact that he bought stock (In hopes of increasing the share price), and now letting the world know he bought more and wants them to do this and that. This is all legal?
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In short, it is not. In fact large stockholders are required by SEC rules to disclose transactions, and last I checked, anyone is perfectly entitled to express their opinions about anything they like.
 
Yes!

NutsNGum said:
If you have 2.5 Billion dollars and you want more, instantly, does that make you a douchebag?
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The list of companies destroyed by Icahn for his personal enrichment is long and storied (TWA for example). More appropriate would be for Apple to buy back his shares and forever ban him from owning any Apple products.
 
NewbieCanada said:
Really? You think so? Any other words of wisdom, oh great one?

I'm so glad I have you to guide me.
Click to expand...

No idea what your lovely graphic is meant to say, but if you are as mystified by the movement of stocks as you seem to be, then one has to wonder what you understand about the markets.
 
rodpascoe said:
I love how so many people on here think they are smarter than this guy and also that they are smart enough to be advising Tim Cook.

This guy is a BILLIONAIRE, you think *you* know better than him?!

Amazing. :eek::D
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I know more than one or two billionaires, most are not that smart.

Icahn has a history of making his money by buying a bunch of stock in a company, getting on the board, gutting the company, walking off with a bunch of cash while the former company faces bankruptcy. I would not be surprised if Icahn was not working with Samsung in some kind of hostile takeover gambit, probably with multiple third party proxies.
 
Nunyabinez said:
"You keep usin tha word. I don thing it means wha you thing it means."

"Pump and dump" is a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price.

Not what's happening here, but thanks for playing.
Click to expand...

Here is the definition of "pump and dump" from Investopedia:

"Definition of 'Pump And Dump'
A scheme that attempts to boost the price of a stock through recommendations based on false, misleading or greatly exaggerated statements. The perpetrators of this scheme, who already have an established position in the company's stock, sell their positions after the hype has led to a higher share price."

This is exactly what Icahn is trying to do: artificially inflate the stock value by having other investors anticipate an unlikely large buyback. That would decrease the number of shares and increase the share of the company each of these other investors owns. This can cause a frenzy of buying raising the price. The he sells a large quantity of the stock causing its price to fall like a rock while he walks away even richer.
 
If a person has enough influence to sway companies, markets, or even sectors of the economy...they have too much power/money.

It is not a fair playing field.
 
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