$200-500 million bucks. But yeah. :/
Luckily even with his massive net worth, he's still not much more than a bug on the back of the beast that is Apple.
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Investor Carl Icahn to Have Dinner With Tim Cook, 'Magnitude' of Share Buyback to Be Discussed
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$200-500 million bucks. But yeah. :/
Luckily even with his massive net worth, he's still not much more than a bug on the back of the beast that is Apple.
No one has a qualm against him making money. He just a less than reputable history of tanking companies in the name of short term profit. TWA still leaves a bitter taste to many.
If he had interest in long term growth and sustainability, that'd be one thing. His history would suggest otherwise. Not that what he's doing (or rather, may do) is illegal -- it just has the potential to be ****** towards long term gains. Some of course vehemently support Icahn -- and understandably so -- if you're a current shareholder in AAPL and dump when he dumps you'll stand to make a good profit from the ordeal. Hold on after though, and you're liable to get burned.
He doesn't leave companies in better shape than when he found them.
With regards to Badandy -- there is a time and place to split up and sell companies, but don't be fooled into thinking it's good for anyone but investors. Such sales shaft the general workforce, not just management as you would like to believe, especially when a perfectly viable company is broken up and sold for IP. Don't get me wrong -- if the company is tanking restructuring is necessary and important, but when promising ventures or companies are broken up in the name of immediate profit people tend to dislike the practice. Everything in moderation.
I also don't think you read the TWA article you cited. He sold the London routes. He didn't buy a new fleet of planes. He was the CEO, and didn't want to take action to save the company or create future growth. They eventually got him out with a deal that cost the company dearly. Doesn't exactly sound like someone who was interested in the company's success over short term gains. That's not to say the other management pre and post Icahn was particularly good either though, but that wasn't macs4nw's point.
You're comparing startup investors, old ladies and market speculators. Wow, really?
Uhhhh...I was responding to the blanket statement made that "Speculators are the most useless people on Earth." Certainly you're capable of following a conversation thread? And yes, little old ladies with their retirement accounts are speculators.
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I think you're overestimating his reach at a 0.2% position. Yes, it may be enough to get a sitdown dinner with the CEO but the Apple of today is in a slightly (sarcasm) different financial position than TWA was in in the '90's.
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He's a venture capitalist. To that lot, altruism is an evil thing. Ask Ayn "People who take social security are parasites but look the other way while I take it in my husband's name because I got ill" Rand. Her supporters might want to read up on some of her statements, since she was ironically anti-wealthy as well: http://aynrandlexicon.com/lexicon/middle_class.html
Oh certainly. Right now his position is rather minimal, and Apple is doing much, much better than TWA. That's liable to change though -- as Apple commences a buyback his % stake will automatically increase. Unless he convinces Apple to dump the bank (hopefully not), that alone won't float his stake that far. There are other shareholders however who probably hold similar views. With the combination of a large buyback and general discontent with sliding growth, one could envision that he could team up with other investment firms to maximize profits, within the legal framework of course.
That's purely speculative though. It will be interesting to see what actually happens. If Tim launches a successful product into a new market it won't matter.
If Cook actually shows for this dinner we can definitively say Steve would never . . .
Somewhat OT, but Ayn Rand did write a piece in the 1960s about accepting government payments or working for the government. The gist of it was that since we have a mixed economy it could be acceptable in certain circumstances. E.g. if accepting Social Security was a return of taxes, or Medicare because the government effectively monopolized health insurance for the elderly, or working at a university that receives government assistance (i.e. virtually all of them) because you are a researcher, it could be justified. Just because we don't have a perfectly capitalist society doesn't mean an advocate of capitalism needs to be a martyr.
Anyway, I'm not sure what she'd think of someone like Icahn. She wasn't anti-wealthy at all, but she was anti-cronyism. It's become common to associate capitalism with "big business," but it's pretty explicit in Atlas Shrugged that big business is often anti-capitalist in that they lobby governments to get contracts, or drive out competitors. I think she'd be pretty comfortable with much of the tech sector, though, since there are a lot of self-made people like Mark Zuckerberg, Bill Gates, and Steve Jobs, as those are/were the type of people represented by her character Hank Rearden.
As for Icahn, he's a mixed bag. TWA still leaves a bad taste for many, but the airline industry is an unusual case. It was coddled under a government-sanctioned oligarchy for nearly 50 years, and since Carter de-regulated the industry (probably his biggest accomplishment) it has taken until now for them to develop a sustainably profitable business model. It's no accident that every major airline today that existed prior to deregulation has gone through bankruptcy except Southwest (which wasn't a major airline back then). TWA was a high risk/high reward attempt at financial restructuring. It didn't work out, but neither did just about every other airline deal.
"Corporate raiders" usually are best when a company is struggling (e.g. Dell), although there are always risks, too (witness Bill Ackman with JC Penney). Apple is an unusual case since they are healthy, but they are just the latest company to deal with the question of what to do with a cash pile bigger than what they need. Google is running into the same issue, and if trends continue Samsung will have this "problem" in a few years, as well. It's more money than they need to grow organically, and so one temptation when that much money is burning a hole in a company's pockets is to do a massive acquisition, which could be a mistake. A buyback is a way to return cash to shareholders in a tax-efficient manner.
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Sure it makes sense. It's a fixed quantity, just like shares. The more you issue the more diluted it becomes and the less it's worth. Basic Econ 101. It's why high end things don't necessarily cost more to produce (a BMW has roughly the same production costs as a VW) but cost more - scarcity.
Share buybacks are good because they raise the price and make the company appear more valuable. Which company is more valuable - Berkshire Hathaway with it's $171,000+ stock price or Apple @ $501? Berkshire looks more valuable because it's stock is less obtainable.
Splits dilute shareholder value but make the stock more easily attainable. What everyone is hoping for is that the stock will appreciate in value over time. Sometimes it does and sometimes it stays put for a long while.
Trying to figure out the stock market is basically not obtainable. There is a huge "herd mentality" in it and way too many large players with lots of control for the individual investor to consistently score big. You do your research, put some $$ down on good companies and hope for the best. Ignore most of the MBA BS (if their lips are moving they are BS'ing) and focus on the basics.
How much of a buyback would Apple have to commence to increase Icahn's position significantly? If they purchased half of the available stock (for roughly $230 billion) it would only increase his stake from 0.2% to 0.4%. Also, if he's such a renowned corporate raider, bent on artificially pumping up a company just so it can cave in on itself, why would any other investment firm with any significant position side with him?
The concern over Icahn having a position in Apple is just so overblown.
No. Your car example doesn't make sense. You don't get to buy back those shares with fairy dust. Value has to be given. If you use the wheels, seats, hood and trunk to "buy back" 20% of the shares, the car is reduced in value by that amount and the value of the remaining 80% of the shares remains constant. The same is true if cash for the buyback comes from borrowing (if 20% is borrowed to buy back 20% of the shares, the remaining 80% of the shares now owns a debt burdened asset worth 80% what it was originally). "Scarcity" has not increased value. That's not only basic Econ 101, it's basic common sense.
I'm sure Carl Icahn is well aware of insider trading laws. Tim Cook can decide to have dinner with any shareholder, whether it's Carl Icahn, who owns $1 billion of stock, or someone who has a single share worth $500. The bottom line is that we as shareholders can give Tim Cook whatever advise we want. It isn't "insider trading" unless Cook reveals something to us he hasn't shared with the rest of the world, and we trade on that knowledge. My guess is that Apple's general counsel will advise Cook as to what he can and can't say before this meeting takes place. And after it's over, anything he discusses with Icahn will be made available to the public.
But the company is incurring debt or reducing cash to buy those shares, so does this really increase valuation?
You must be crazy if you honestly don't think that in a meeting, Tim Cook didn't give Icahn a sneak peak at their internal road map or at least the Apple TV or iWatch. What else would spur him to buy up so much stock after a meeting with Tim Cook, if all information was readily and equally available to all investors?
You must be crazy for thinking Cook divulged anything not already public in the phone conversation which occurred after Icahn established his large position and/or is going to divulge anything in next month's meeting, if it takes place.
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No, but it buys Cook more time to introduce those many innovations he drones on about.
I want to be an undercover adjacent diner:
Will it be the foamed eel or the all-you-can-eat meatloaf?
Is either on a trendy or stupid diet?
Will they fight over the bill, split it, try to run for the bathroom when the check arrives...and the tip, will it be 10% from billionaires or a dream night for the staff?
Will one of them drink two flaming 180 proof flaming rum pirate cocktails on an empty stomach and make a terrible decision?
What is the over/under on the wine? A dusty $5K bottle or the amusing pink for twenty bucks? Or just water or pomegranate iced tea?
Will they fight in hushed tones, ending in a dramatic table tipping or a thrown drink like in movies? How about a knife plunged into the table, with all the nerdy staff rushing in to protect their leader, like in cowboy movies?
Will it be the foamed eel or the all-you-can-eat meatloaf?
Is either on a trendy or stupid diet?
Will they fight over the bill, split it, try to run for the bathroom when the check arrives...and the tip, will it be 10% from billionaires or a dream night for the staff?
Will one of them drink two flaming 180 proof flaming rum pirate cocktails on an empty stomach and make a terrible decision?
What is the over/under on the wine? A dusty $5K bottle or the amusing pink for twenty bucks? Or just water or pomegranate iced tea?
Will they fight in hushed tones, ending in a dramatic table tipping or a thrown drink like in movies? How about a knife plunged into the table, with all the nerdy staff rushing in to protect their leader, like in cowboy movies?
Reg FD. He made his purchases before meeting with Tim Cook. Anyway, it's illegal to trade on the basis of insider information, and this administration has been going after high profile cases. Carl Icahn would have to be very brazen to make insider trades and then essentially tweet about it afterwards.
