Carl Icahn Pushed for $150 Billion Stock Buyback at Dinner with Apple CEO Tim Cook [Update: Has $2 Billion Invested]

[charlituna]

This guy will be Apple's financial downfall.

More like folks listening to his tweets will be.

He needs to piss off. Seriously. If he thinks Tim is doing a fine job then leave him alone to do it. Dude doesn't have a majority share of stocks, isn't and better never be on the Board etc.

Only thing he needs to be saying is if he wants to keep or sell his shares and what color he wants his iPhone to be. I bet he would look real sexy with the gold one. Cause ya know, it looks like money.

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. But seriously, what is he thinking? Having dinner and courting a guy like Icahn.

Guy runs his mouth, indicates he will keep running it until he gets a sit down with Cook.

So he gets his sit down. He gets to run off his mouth and is told Tim will think about it. Three weeks later when they continue Tim says thanks again for the feedback, he's thought about it and won't be doing any of it at this time (was probably never going to but for PR reasons won't say that on the first day). Gives the impression he actually did think about it even if he didn't. And who knows perhaps there is a good nugget or two in all the garbage.

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And how do you think they can manage to do that? Why do you think they [Apple] would want to do that?

If the company went private there would be no more of this up and down over the rumors the ANALysts push out. The company would earn based on what they do or don't do.

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Guy invests $2B in your company.....you can't just blow him off.

It's not about the money. It's about his big mouth. Appease him with this chat and he will hopefully shut up at least for a while

 

[IJ Reilly]

That was my point last time. The buyback generates a quick hit so the share price goes up but as other factors come into play the share prices comes back down again. That's what I was saying. How does that help shareholders in the long term? Ok if you want to make a quick profit like Icahn I can see the benefit but it doesn't help genuine long term investors who want to see their shares gradually appreciate over time presumably to build a nest egg for their retirement or something like that.

You are still wrong. All other things being equal, fewer shares means a higher stock price. Buybacks do genuinely help all longterm investors, especially considering that over time current shareholders will be diluted as the company issues new shares to executives as part of their pay packages.

It can be honestly debated whether the same dollars applied to dividends or buybacks are more beneficial to investors, but not whether either one is beneficial. Both are.

 

[69650]

Ok but it's because of those other factors that the stock price may have settled down to where it was (I say 'may' because the buyback is not completed and there's no way really to show a direct correlation of the price settling back to where it was before the buyback). Void of those other factors--which may or may not be present during the entire course of the buyback--and the stock price will go up, strictly based on decrease in supply and increase in EPS.

You are still wrong. All other things being equal, fewer shares means a higher stock price. Buybacks do genuinely help all longterm investors, especially considering that over time current shareholders will be diluted as the company issues new shares to executives as part of their pay packages.

It can be honestly debated whether the same dollars applied to dividends or buybacks are more beneficial to investors, but not whether either one is beneficial. Both are.

I give up. If you think the shares are going to rise due to the buyback and stay there I suggest you invest your life savings in Apple stock right now and keep hold of them.

 

[IJ Reilly]

I give up. If you think the shares are going to rise due to the buyback and stay there I suggest you invest your life savings in Apple stock right now and keep hold of them.

Yes, I come here for investment advice. So thanks.

I guess it should have been apparent that nobody was arguing for or against AAPL as an investment, let alone that the shares would "rise due to the buyback." I think your answer strongly suggests that you will not be getting it. So I give up too.

 

[Michaelgtrusa]

Perhaps he wants Apple to outsource to Mars.

 

[GfPQqmcRKUvP]

I give up.

You should. You objectively do not understand the topic at hand.

If you think the shares are going to rise due to the buyback and stay there I suggest you invest your life savings in Apple stock right now and keep hold of them.

So...you haven't been reading any of the replies you've received?

 

[aliasfox]

Great ideas, all of which could be accomplished with only a quarter of their cash pile.

1/4 of their cash is ~$35B USD. I'd rather they spend $35B on investing in their supply chain, media partners, and advertising and use the remaining $25B on a buyback rather than all $60B on a buyback.

As for investments such as these not hitting the 30% margin, well, they're not thinking long term enough, nor are they thinking negative enough. Apple's been through media/software crunches as well as hardware crunches multiple times in the past with the Mac. Someone there should recognize that they never want that to happen with iOS. It won't happen next quarter, nor next year, but if Android is 90% of the market five years down the line, Apple will be comfortable knowing that least it can make sure that Netflix and Hulu and Pandora etc have clients for them. Unlike Windows Phone, which seemingly has to fight for each media client and Instagram style app.

 

[s2mikey]

Perhaps he wants Apple to outsource to Mars.

Of course he does. Investors HATE employees and the costs associated with taking care of people. Any company always looks to find the most miserable place on Earth for labor since it will be cheapest. Soon, China will be OUT since they'll start making "too much". My guess is Afghanistan being next for building electronics. They can "pay" them nothing which is great.

Honestly, I wish private company ownership was the norm. Investors only ruin employees lives and their obnoxious expectations & demands cause companies and its workforce a lot of stress.

Im all about captilalism(mostly) but this kind of stuff goes too far.

 

[Michaelgtrusa]

Of course he does. Investors HATE employees and the costs associated with taking care of people. Any company always looks to find the most miserable place on Earth for labor since it will be cheapest. Soon, China will be OUT since they'll start making "too much". My guess is Afghanistan being next for building electronics. They can "pay" them nothing which is great.

Honestly, I wish private company ownership was the norm. Investors only ruin employees lives and their obnoxious expectations & demands cause companies and its workforce a lot of stress.

Im all about captilalism(mostly) but this kind of stuff goes too far.

I can agree with you here and this makes me wonder what will happen to Apple in the near.

 

[giantfan1224]

I give up.

You should've given up long ago. Do yourself a favor and take a college level investment course. If you're the investor you say you are then you really need it.

 

[69650]

You should. You objectively do not understand the topic at hand.

You should've given up long ago. Do yourself a favor and take a college level investment course. If you're the investor you say you are then you really need it.

I understand perfectly and I do not appreciate your comments above. End of debate.

 

[lildimsum7]

1/4 of their cash is ~$35B USD. I'd rather they spend $35B on investing in their supply chain, media partners, and advertising and use the remaining $25B on a buyback rather than all $60B on a buyback.

As for investments such as these not hitting the 30% margin, well, they're not thinking long term enough, nor are they thinking negative enough. Apple's been through media/software crunches as well as hardware crunches multiple times in the past with the Mac. Someone there should recognize that they never want that to happen with iOS. It won't happen next quarter, nor next year, but if Android is 90% of the market five years down the line, Apple will be comfortable knowing that least it can make sure that Netflix and Hulu and Pandora etc have clients for them. Unlike Windows Phone, which seemingly has to fight for each media client and Instagram style app.

Don't forget offshore cash. That makes excess cash $150B and growing, hence the buyback. Why should Apple spend more on the things you mentioned and destroy shareholder value? In the scenario you mention, Apple would not even earn its cost of capital. They are already spending a lot on those things already! There's really nothing that can be improved. Do you really want Apple to waste $$ like Microsoft at the expense of shareholders?

 

[macgabe]

Does Apple have a venture capital fund? If not that would be something I'd like to see them spending maybe one or two billion on.

I see there's an iFund http://www.kpcb.com/initiatives/ifund/companies but that's only $200m and maybe not all their own money.