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

[MacRumors]

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 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

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.

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

 

[luckydcxx]

yesssss .... AAPL is up. Keep on buying it Carl.

 

[JayLenochiniMac]

Can MR at least not post that photo of him?

 

[mozumder]

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.

 

[JackieTreehorn]

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.

 

[MTL18]

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...

 

[2457282]

Mac Rumors, PLEASE, PLEASE, PLEASE..... use a different picture. The one you keep using is creepy.

 

[huntlane]

Already voted no on this.

 

[captain cadet]

Just another way to make money off apple!

 

[MacMadHatter]

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.

 

[Rogifan]

Who writes this stuff?

With respect to all of Apple’s new and existing opportunities for growth, they will only prove to be successful with strong execution from the company’s management, in whom we hold great confidence. Naysayers say Tim Cook is not Steve Jobs, and they’re absolutely right. He is Tim Cook and we believe he is doing an excellent job, and Jonathan Ive, Senior VP of Design, is Jonathan Ive and we believe he’s doing an excellent job, etcetera.

 

[Daalseth]

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.

 

[bradl]

Such horrible short-term thinking by Icahn. There could be a billion other things Icahn could do with that money over the long term to improve humanity.

Fixed that for you.

BL.

 

[FriednTested]

He is so pushy and clingy and annoying and shorter sighted... Not to mention creepy...!

 

[koruki]

lol Apple's never listened to shareholders or customers, I don't think $3b is gonna change that.

 

[FriednTested]

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.

I hope and pray Tim doesn't bend with pressure...

 

[Return Zero]

iCahn't stand any more of this guy.

 

[micropig]

"I don't always push stock buybacks...but when I do, I prefer Dos Equis. I mean AAPL."

 

[ck2875]

Icahn should ask (i.e. bribe) Judge Cote to be the next court appointed monitor on the ebooks thing.

 

[themoffster]

I think he's right.

 

[Xerotech]

If he was genuinely interested in a long term investment, he would talk more about reinvesting into different technological sectors and push for dividends based on performance. All I ever see him talking about is the stock being under valued and should be around $840. You saw what he did to Netflix, all he wants is a quick buck.

 

[Jibbajabba]

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...

Who wouldn't in his position

 

[tdar]

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.....

 

[Prof.]

Mac Rumors, PLEASE, PLEASE, PLEASE..... use a different picture. The one you keep using is creepy.

I think that's the point. To vilify him and make him appear to be a total creeper. Which he is.

 

[roadbloc]

Nice to know somebody has $500million to throw about.