Investor Carl Icahn to Meet with Apple CEO Tim Cook on Monday, September 30

[RogueWarrior65]

What's the end-game?

What is Icahn's real goal here? Most people at that level aren't interested in whether or not we get an iPad with OLED displays or a 17" Macbook Pro again. So is he simply just trying to drive up the stock price up so that he can sell it off and make a ton of money? One could argue that the guy's already super rich so what's the motivation to make more? However, Heinlein talked about the motivations of the rich in "Stranger in a Strange Land." Basically he said that the reason rich people are rich is because what motivates them is making money as opposed to having it to spend.

 

[IGregory]

He might as well be a homeless beggar compared to Apple's value.

Okay, what do I have to do to become a homeless beggar in Icahn's under the Interstate bridge shelter?

 

[giantfan1224]

Apple is not undervalued. $700 was a scam. $300-$350 is the correct price for their stock. Anything higher is a bubble that will burst. Apple has yet to prove that they won't have the same outcome of Nokia or Blackberry since phones are half their business.

A bubble based on what? Trailing P/E? Future P/E? Future EPS? Certainly you have some figures to back up your opinion that AAPL at $487 is a bubble waiting to burst. Can you somehow spin that 9 million iPhones sold as being a sign of the bubble bursting? Or that Apple revised it's guidance up, and we know they always beat their own guidance?

 

[Technarchy]

Apple is smart to hoard as much cash as possible. It's a great bulwark against being the next Palm or BlackBerry...or Apple in the middle years.

This whole "undervalued" notion is the language of vultures looking to pick Apple dry.

 

[Apple Corps]

Makes tons of sense. Apple is sitting on a useless cash pile. More companies should divest themselves of cash hoards through stock buybacks and dividends, rather than moaning about tax rates. If you can't figure out how to spend the money, give it to your stockholders so they can pay the taxes and spend/invest the rest as they wish.

Makes no sense - waste of cash. If you want to return $$ to shareholders - which they should - issue a special dividend of $20 a share so that current shareholders actually see the ROI.

Spending that same amount on a buyback does NOT translate to the "decreased supply of shares = higher share price" that many are touting.

 

[Gasu E.]

This guy is a parasite, he wants Apple to accelerate the buyback for one reason only, it increases the value of his holding. He doesn't give a damn about the long term or Apple as a company, all he cares about is his own wallet.

This is why there are publicly traded corporations, why Apple can raise money in the capital markets, why you (or anyone else) can buy and sell stock, and why companies such as Apple can grow without being constrained by cashflow. It's based on the fact that random people, otherwise uninterested in the company, can buy stock low and sell it high. It's not a "necessary evil" for capital markets to exist; it's the foundation for capital markets to exist.

Go reject capitalism if you want; it's not the only way humanity could organize itself. But if you choose to embrace it (and implictly you do so, if you are a fan of Apple, Inc.), at least understand it before you deride one of its fundamental tenents.

 

[mabhatter]

Icahn is a stockholder, and like all stockholders he is legally a partial owner of the company. Stockholders in the aggregate are Tim's boss. Insofar as Icahn's interests are in line with other stockholder's interests, such as wanting for Apple to pay out their unused mountain of cash, Apple should be listening to him very carefully, and doing the best they can for their owners.

Icahn is a "guerrilla" investor who attacks companies with easy money when no other investors have asked him to. He makes his money off crazy demands then flips his stock to move on to another victim.

The best thing Tim could do would be toss him off a tall building... Icahn is exactly what's wrong with Wall Street attacking healthy companies simply to shake out cash in 1-2 quarters then pull out their stake and let the company and all the other investors they "represented" crash. There's no money in companies that JUST make big bags of money in profits... That's not what Wall Street has done since the 1980's.

 

[zgh1999]

This is all very bad news for Apple.

Icahn is bad news.

His involvement implies the beginning of the end for Apple. Just take a look at what happened with Dell.

I just don't understand Tim Cook at all.

Apple went from the industry leader to a company unable to innovate. It can't even get over its fixation on iPhone's tiny screen size.

And it went from a company that lets its stock price speak for itself, to having to rely on someone such as Icahn to cheerlead its stock. How pathetic is this? Just take a look at what happened to Dell. It is hard to believe that people like Icahn really care about Apple. More likely, they are just in it for the money. They can care less about innovative products and making changes in the quality of life of the customers. Again, it is all about the money. This whole situation with Tim Cook having to resort to talking to Icahn to cheerlead for Apple's stock price is just extremely troubling. It speaks volumes about Tim Cook's inability to lead Apple correctly.

And what is all this talk of paying out dividend? The fact that the payment of dividend is already being done now and that there are more talks of higher dividend payout by Apple is extremely, extremely, worrisome.

Payment of dividend by a company like Apple is an admission by Board and Management that Apple has transited from an innovative, growth driven company to a stagnant company relying on revenue generation rather than growth and innovation. It is an admission that Apple is unable to generate more returns using the cash for the shareholder as compared to giving the cash back to the shareholder and have the shareholder generate the returns himself.

Put it another way, if Apple is still the innovative and growth driven company like it used to be under Jobs, it would surely not payout any dividend -- no shareholders would want it to pay dividend -- because by keeping the cash within Apple and have Apple use the cash to generate returns, the shareholders are able to ensure that there is more returns that way -- since there are no other ways to generate a higher return than Apple.

By shifting to a dividend paying company, Apple is in fact admitting that it no longer has the ability to innovate and grow like it did before, and is thus not able to use the cash to generate a higher return as compared to giving the cash back to the shareholders and have the shareholders themselves generate a return by some other means.

Again, this is all very bad news.

The sooner Tim Cook is gone, the better.

He is the worst thing to have happened to Apple. We are in danger of a redux of the disaster that happened at Apple after Jobs was first ousted.

If nothing is done to reverse this, I think Apple would become like Microsoft or Dell and become irrelevant in a couple of years time like BlackBerry.

 

[hydr]

I hope icahn gets through, and Apple increases its buy-back by 100%.

Let Apple spend it cash where its needed, buy back as many shares as possible and go private. Let analysts eat their own lunch.

 

[GfPQqmcRKUvP]

The financial literacy of the average poster here is so discouraging.

This is all very bad news for Apple.

Icahn is bad news.

Please

His involvement implies the beginning of the end for any company, including Apple. Just take a look at what happened with Dell.

Wait, you mean intervene in a going-private transaction that underpaid the common stockholders by tens of millions of dollars and get everyone a better price? The nerve!

I just don't understand Tim Cook at all.

It's not just Tim Cook you don't understand.

And it went from a company that lets its stock price speak for itself, to having to rely on someone such as Icahn to cheerlead its stock. How pathetic is this?

Apple is publicly-traded. It has no say in who buys its stock. Carl Icahn thinks Apple stock is undervalued given the underlying business. That's it.

Payment of dividend by a company like Apple is an admission by Board and Management that Apple has transited from an innovative, growth driven company to a stagnant company relying on revenue generation rather than growth and innovation. It is an admission that Apple is unable to generate more returns using the cash for the shareholder as compared to giving the cash back to the shareholder and have the shareholder generate the returns himself.

Here's a hint known by literally everyone in the finance community: Apple has had too much cash for years and the payment of a dividend was what should have happened all along. Apple has more than enough cash to throw into R&D and still pay a healthy dividend.

Put it another way, if Apple is still the innovative and growth driven company like it used to be under Jobs, it would surely not payout any dividend -- no shareholders would want it to pay dividend -- because by keeping the cash within Apple and have Apple use the cash to generate returns, the shareholders are able to ensure that there is more returns that way -- since there are no other ways to generate a higher return than Apple.

You act as if that money was being used when they weren't paying a dividend. It wasn't! Their balance sheet was just growing unchecked. You know what's better than getting $300 of a tech company and $200 of cash when you invest $500 into a share of Apple? Getting the same $300 of that tech company and have $200 to do whatever else you want.

 

[Technarchy]

This is all very bad news for Apple.

Icahn is bad news.

His involvement implies the beginning of the end for any company, including Apple. Just take a look at what happened with Dell.

I just don't understand Tim Cook at all.

Apple went from the industry leader to a company unable to innovate. It can't even get over its fixation on iPhone's tiny screen size.

And it went from a company that lets its stock price speak for itself, to having to rely on someone such as Icahn to cheerlead its stock. How pathetic is this?

And what is all this talk of paying out dividend? The fact that the payment of dividend is already being done now and that there are more talks of higher dividend payout by Apple is extremely, extremely, worrisome.

Payment of dividend by a company like Apple is an admission by Board and Management that Apple has transited from an innovative, growth driven company to a stagnant company relying on revenue generation rather than growth and innovation. It is an admission that Apple is unable to generate more returns using the cash for the shareholder as compared to giving the cash back to the shareholder and have the shareholder generate the returns himself.

Put it another way, if Apple is still the innovative and growth driven company like it used to be under Jobs, it would surely not payout any dividend -- no shareholders would want it to pay dividend -- because by keeping the cash within Apple and have Apple use the cash to generate returns, the shareholders are able to ensure that there is more returns that way -- since there are no other ways to generate a higher return than Apple.

By shifting to a dividend paying company, Apple is in fact admitting that it no longer has the ability to innovate and grow like it did before, and is thus not able to use the cash to generate a higher return as compared to giving the cash back to the shareholders and have the shareholders themselves generate a return.

Again, this is all very bad news.

The sooner Tim Cook is gone, the better.

He is the worst thing to have happened to Apple. We are in danger of a redux of the disaster that happened at Apple after Jobs was first ousted.

If nothing is done to reverse this, I think Apple would become like Microsoft or Dell and become irrelevant in a couple of years time like BlackBerry.

How droll, but I doubt this is intentional satire.

If you equate a bigger screen with innovation, I doubt you've ever endeavored to be innovative.

 

[Zellio]

Yep, because Tim Cook is not interested in your opinion on financial matters. Carl Icahn is a financial legend. Regardless of if he was a shareholder or not, Cook would presumably find time to have a lunch with him.

Over the years folks have suggested to Apple that they do buy backs and dividends. They have continually failed to do so at a level to stop or reverse the cash pile accumulation. Now this is a fantastic problem to have. But Apple and its Shareholders could have done better than sit around with that cash pile earning 1% returns.

That's kinda mean, and you don't know if the guy is good with financials or not.

As far as icahn, financial legend? By legend you mean infamy I hope, because this guy is the enemy to any business!

 

[SeattleMoose]

1) Wallstreet shark buys huge amount of stock in Company
2) Wallstreet shark wants faster return on investment
3) Wallstreet shark meets with CEO of company to try and coerce CEO to meet his demands

Wow...isn't this illegal?

Is he gonna threaten cook like some tough guy from The Mob? Is he...Mob?

Worse, this is a VERY slippery slope...caving to Wallstreet sharks.

 

[gowhitestripes]

- They should do a $150 billion buyback

- A buyback does result in fewer shares and higher price because it raises the EPS value

- They don't have to use their huge cash pile, they simply borrow at a 3% rate against their cash and pay as they wish


- $500 per share - $150+ cash = $350 for a company making $40+ a year...

- With inflation at 3% every year a higher price becomes more attainable

 

[jdbr]

Parasites

The shareholder parasites, only interested in their own personal return and a quick pound or two, move in .
These people destroy every major company they circle. They force companies down the route of increasing, every year, the return to the shareholder. The companies focus on this return and money is not spent on development or the major stakeholders namely the employees and the customers. These stakeholders get sidelined.
All major companies that have been circled by these people have been destroyed by these people.
Major famous retailers that went back to Victorian times (who put customers and employees first) were damaged by the mantra of 'shareholder value' as they focused solely on the return to the shareholder, it took them years to recover. Shares then collapse and these parasites move on to the next major company.

 

[giantfan1224]

Once again we have a MacRumors article that mentions Icahn and people are frothing at the mouth, that this somehow spells doom for Apple. The difference between this investment versus past investments that have earned him his reputation is the company in which he's invested 1-2 billion is the most valuable company in the world, which is sitting on a very large pile of cash. This guy is peanuts. You're all giving him too much credit for the power and influence you think this guy can have over Cook.

 

[jonnysods]

I would avoid this guy Tim. Remember all the stock scandals Apple was wrapped up in a year or two before Steve died?

 

[giantfan1224]

1) Wallstreet shark buys huge amount of stock in Company
2) Wallstreet shark wants faster return on investment
3) Wallstreet shark meets with CEO of company to try and coerce CEO to meet his demands

Wow...isn't this illegal?

Is he gonna threaten cook like some tough guy from The Mob? Is he...Mob?

Worse, this is a VERY slippery slope...caving to Wallstreet sharks.

Can you articulate why this would be illegal (I'm talking about the facts that are being reported, not your suppositions)?

 

[GfPQqmcRKUvP]

Can you articulate why this would be illegal (I'm talking about the facts that are being reported, not your suppositions)?

No, he can't, because no one here who has a problem with Icahn meeting with Tim Cook knows what they are talking about.

 

[Technarchy]

The shareholder parasites, only interested in their own personal return and a quick pound or two, move in .
These people destroy every major company they circle. They force companies down the route of increasing, every year, the return to the shareholder. The companies focus on this return and money is not spent on development or the major stakeholders namely the employees and the customers. These stakeholders get sidelined.
All major companies that have been circled by these people have been destroyed by these people.
Major famous retailers that went back to Victorian times (who put customers and employees first) were damaged by the mantra of 'shareholder value' as they focused solely on the return to the shareholder, it took them years to recover. Shares then collapse and these parasites move on to the next major company.

All one needs to do is read any of the stupidity of these so called analysts to learn the state of modern investing. It's highly parasitic with little thought given to company health and long term viability.

 

[Small White Car]

This lil market manipulator is just hunting down another avenue with a successful business such as Apple.

Its so sad that a single sentence from such douche bags can have profound impacts on the markets. He literally can increase/decrease the value of a company over night. Tom Cook seems to be a perfect match for him though, its all about making the dough cause you dont have innovation in the driving seat anymore.

I'm a MUCH smaller investor than him and even I agree with the advice he's giving Tim.

So am I a scamming manipulator too? It seems half the posters on this site must think I'm scum for both owning stock and agreeing that Apple should buy more stock back.

 

[everything-i]

This is why there are publicly traded corporations, why Apple can raise money in the capital markets, why you (or anyone else) can buy and sell stock, and why companies such as Apple can grow without being constrained by cashflow. It's based on the fact that random people, otherwise uninterested in the company, can buy stock low and sell it high. It's not a "necessary evil" for capital markets to exist; it's the foundation for capital markets to exist.

Go reject capitalism if you want; it's not the only way humanity could organize itself. But if you choose to embrace it (and implictly you do so, if you are a fan of Apple, Inc.), at least understand it before you deride one of its fundamental tenents.

I would not disagree with the content of your comment so far as it relates to the working of capital markets I stand by my summary of Icahn. He is part of what is rotten with the way markets can currently operate. No interest in wealth creation or real investment he only cares about manipulation of the market to suit his own ends no matter how that damages a company or other investors.

 

[Shirke]

I would not buy it but short it.

 

[IGregory]

Apple went from the industry leader to a company unable to innovate. It can't even get over its fixation on iPhone's tiny screen size.

I don't understand this fixation by some that Apple can't innovate. And, this tiny screen thing is driving me to drink.

The iPhone 5s/5c are on par to outsell previous iPhones. If the screen size was a major issue with the most of us we would not purchase the iPhone. Personally, sure I would like a larger screen, but I am ordering my new 5s today and I will be satisfied with it. To date, the iPhone screen size is a design choice not a failure to innovate.

Innovation? IOS7, Mavericks, the new Macs, iPhone 5s, iCloud, to name a few, what's not to like about these recent products. Can you name something that you would like Apple to build other than a larger screen iPhone?

 

[satcomer]

I don't understand this fixation by some that Apple can't innovate. And, this tiny screen thing is driving me to drink.

The iPhone 5s/5c are on par to outsell previous iPhones. If the screen size was a major issue with the most of us we would not purchase the iPhone. Personally, sure I would like a larger screen, but I am ordering my new 5s today and I will be satisfied with it. To date, the iPhone screen size is a design choice not a failure to innovate.

Innovation? IOS7, Mavericks, the new Macs, iPhone 5s, iCloud, to name a few, what's not to like about these recent products. Can you name something that you would like Apple to build other than a larger screen iPhone?

You trying to rationalize with a FanDroid. I learned through the years just don't reply to them and they will leave.