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

[giantfan1224]

It is not the horror that Ichan wants to get a return. It is the horror that he could give crap about the company. If getting his money means throwing the company under the bus, he is going to be for throwing the company under the bus.

It is not too significantly different that a Mafia protection racket. "You need to funnel money into my pockets or your business life might happen to run into drama/trouble". If he was actually contributing something in return, but he really isn't. He should get more money largely because he has a big pile of money. Yeah horror is in there.

I get the sentiment held by many that Icahn is something of a corporate raider. I just think that many here are overestimating the influence and power he can have as a 0.5% stakeholder in the most valuable company in the world that has a more than healthy balance sheet.

 

[dastinger]

Has anyone made an iCahn joke yet?

 

[subsonix]

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.

Guy gets in too late, acts like a sour loser and attempt to artificially manipulate the stock price instead. What's good for him personally short term, may not be what is best for the company, long term. You are setting up a false dilemma here.

 

[IJ Reilly]

Has anyone made an iCahn joke yet?

No, and iCan't imagine why.

 

[dastinger]

No, and iCahn't imagine why.

Fixed

 

[deconstruct60]

I get the sentiment held by many that Icahn is something of a corporate raider. I just think that many here are overestimating the influence and power he can have as a 0.5% stakeholder in the most valuable company in the world that has a more than healthy balance sheet.

It is pragmatically more than 0.5% stakeholder position. He tends to draw a number of smaller sharks and a herd of remoras along with him. Throw on top the leveraging power of derivatives bought on credit and the whole notion that a small number of players can't piss around with market pricing goes out the window. Like I said it is alot like the Mafia. The top end folks aren't going to be the ones who accidentally throw brick threw window or doing the grunt work.

All the short sellers and doom-and-gloom volitility vampires need is someone to start the momentum going, from there it is just a matter of catering to rounding up more doom-and-gloomer to pile on board and pimping their momentum.

Icahn doesn't want to take-over over anything. ( His disaster of TWA is only indicative of what the result would be). If you pay him off, eventually he leaves. Eventually the stock stabilizes and this kind of buy-and-manipulate stuff loses leverage.

 

[Arganos0]

First of all, this is not a corporate raid - Icahn cannot force a decision to be made with the small stake he holds in Apple. He can have lunch with Tim Cook, and Mr Cook can still say 'no'. He can try to enter into a proxy war, but that will take ages, and I doubt he is willing to do that in the case of Apple.

Second, people here comment on the fact that Icahn does not care about the real business of the company. Perhaps. The argument runs that none of the companies he has invested in during the past have benefited from his investments and that he is a parasite leeching funds off the company to make a quick gain. That may be true to some extent. However, corporate raiders do not take over (or invest in) companies where the management is doing a perfect job - typically, they only invest in companies where management is doing a subpar job and there are gains to be made from the time and money invested. Those gains have to be sufficient enough to warrant the huge investments and time spent, so that means the management must truly be doing something inefficient.

This whole activity is simply a form of correction, where market participants monitor the management and take action if capital can be deployed more efficiently somewhere else. Without knowing that much about apple's business, it seems that Apple can return at least 50 billion in cash to investors and still have a sufficient cushion to invest in R&D and save for a rainy day. Perhaps the investors would prefer to invest that 50 billion in biotech, or semiconductors, or even cereal companies. As owners of the company they have certain rights to demand the cash back.

 

[Mebsat]

Icahn cannot force a decision to be made with the small stake he holds in Apple. He can have lunch with Tim Cook, and Mr Cook can still say 'no'.

This meeting is in NYC. I hope Tim Cook had other reasons to be there, and that this is not a command performance.

If not, next time Icahn better fly in to Cupertino. Even if Steve would ever had met with Icahn (unlikely), you know he would never have flown in to do it.

 

[nexusrule]

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.

Could you explain in detail how you estimate (or completetly make up maybe) the exact value Apple stocks should have?

 

[Battlefield Fan]

iPhones are iPods too. iPhones sales have never been better. So there's that.

Nice try but that's not how Wall Street nor Apple themselves present their numbers. You're talking functionally but I'm talking investment.

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Yes, all speculation, with not a shred of evidence to back that speculation up. Why are people going to move away from the iPhone by 2017? What will iOS look like in 2017? What will the iPhone look like in 2017? What other markets will Apple have penetrated by 2017? OS X is over 10 years old; if 10 is such a magical number, why aren't Mac sales declining?

You don't have any of these answers. Before speculating, try to come up with some reasons to back that speculation up. I don't really want to see a market share chart either. The smartphone market is growing rapidly, so you can have sales growth with declining share, and Apple's pretty good at carving the most profitable niche out of a market.

Once apple released the iPhone 5c they cheapened their stance into the market like they did with the iPod nano and shuffle and other icrap. They'll dilute the market with multiple sizes of iPhones and iPads and different price entries. Apple isn't going past $550 ever again unless they can manage to overturn a new market but that won't happen without Steve.

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Could you explain in detail how you estimate (or completetly make up maybe) the exact value Apple stocks should have?

I do it because I do.

 

[KellyC]

I own 4 shares of Apple but I don't think I can just pop in and schedule a meeting.

Don't sell yourself short. Have you checked the actual mutual fund positions in your 401K/IRA? You probably own more Apple than you think.

 

[subsonix]

Once apple released the iPhone 5c they cheapened their stance into the market like they did with the iPod nano and shuffle and other icrap. They'll dilute the market with multiple sizes of iPhones and iPads and different price entries. Apple isn't going past $550 ever again unless they can manage to overturn a new market but that won't happen without Steve.

Not at all, it's priced the same as previous "last year models", but it's not strictly a last year model, hence they increase the value of what is offered across their iPhone line.

 

[giantfan1224]

Nice try but that's not how Wall Street nor Apple themselves present their numbers. You're talking functionally but I'm talking investment.

Yeah, they show declining sales in a lower end category and increasing sales in a higher end, more profitable category. But even then, the iPod is not in an entirely separate category from the iPhone simply because the iPhone has the same capabilities of an iPod, and more. I haven't purchased a single iPod since I got my first iPhone in 2009. The iPhone cannibalized, for me, all further iPod purchases. I have a feeling that doesn't bother Apple in the least.

 

[wizard]

Before people start circlejerking saying how it's the end of Apple as we know it, etc...

It could be you really don't know what his intentions are.

Carl Icahn is a huge investor, yes, but his net worth is NOT capable of taking over Apple. He might as well be a homeless beggar compared to Apple's value.

If he can get +10% of the stock he can exert a tremendous amount of influence over Apple and how it is managed. This is what people don't understand, people like Icahn can impact any company significantly, they don't need to be the majority share holder.

What he's doing (attempting to manipulate the value of his own investment) is still wrong and should be highly illegal, but it's not really going to actually effect Apple as a company.

Why should it be illegal? As a share holder, effectively a part owner of the company, he is free to express his opinion about how the company should be managed and how he should profit from the company.

Apple wouldn't be the first company to be taken over by evil share holders looking to cash in. This is the evil side of the stock market and unfortunately often a public side of the stock market. It is often like owning a car you suddenly need to get rid of, you price that so that you get maximum benefit from the sale and avoid listening to sob stories from people wanting it for a lower price. It is unfortunate that some share holders don't couple their success to the companies and instead just see very profitable assets that can be used to line their pockets. Frankly the only difference here between a large corporation and a small business is size. A small business with a bad owner / manager feels the results of his practices personally (the good and bad). In a public ally owned company the companies management team often takes the brunt of the blame for the decisions the owners make.

 

[TallManNY]

- 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

That is the basics of the argument. But I'm pretty sure not even Apple could borrow $150 billion. That would be several times larger than the largest corporate debt issuance ever (which we just had a few weeks ago by Verizon at $49 billion).

In Apple's recent debt issuance it was reported that they were paying less than 2% interest on the debt. So you can see how that works out even better for the Shareholders. Apple borrows at 2% and sends that money to shareholders who can't possibly borrow at anything close to a rate that low. But that debt issuance by Apple was a paltry $19 billion.

 

[wizard]

Nice try but that's not how Wall Street nor Apple themselves present their numbers. You're talking functionally but I'm talking investment.

What you are talking is what the bull leaves in the field hat normal people avoid stepping in.

Once apple released the iPhone 5c they cheapened their stance into the market like they did with the iPod nano and shuffle and other icrap.

Baloney! There is nothing cheap about the 5C and frankly it follows the same pattern they have used for years. It does package last years model in a better case but that isn't exactly ground breaking.

They'll dilute the market with multiple sizes of iPhones and iPads and different price entries. Apple isn't going past $550 ever again unless they can manage to overturn a new market but that won't happen without Steve.

This is the most idiotic thing I've seen in years. Multiple sizes of iPads make sense just like multiple size of laptops make sense. Would you expect Apple to sell laptops with just one size of screen?

I do it because I do.

You do it apparently due to blissful ignorance of what has made Apple successful. For example iPod Nano was a very successful product an was extremely important for Apple at the time. Not every product last forever, even the Apple 2 came to an end eventually.

 

[TallManNY]

This meeting is in NYC. I hope Tim Cook had other reasons to be there, and that this is not a command performance.

If not, next time Icahn better fly in to Cupertino. Even if Steve would ever had met with Icahn (unlikely), you know he would never have flown in to do it.

This is a pretty big week in NYC. UN was in session, many large philanthropic institutions are having major meetings this week and over this weekend. You can always meet with many power players in NYC but this week and next you could meet with more than usual. I'm sure Cook isn't traveling just to get the chance to get pestered by Icahn (or, as I see, a chance to get Icahn's advice). They probably just compared schedules and this is when they were both in the same city.

----------

It is not the horror that Ichan wants to get a return. It is the horror that he could give crap about the company. If getting his money means throwing the company under the bus, he is going to be for throwing the company under the bus.

It is not too significantly different that a Mafia protection racket. "You need to funnel money into my pockets or your business life might happen to run into drama/trouble". If he was actually contributing something in return, but he really isn't. He should get more money largely because he has a big pile of money. Yeah horror is in there. Once Ichan has siphoned off a nice chunk of Apple's cash stockpile he'd be off to siphon off some other company's cash.

It isn't like he is personally just taking the cash for himself. It goes to all shareholders.
And Apple has repeatedly shown that they don't have any use for the cash. The evidence is that it sits there unused. Did you see the sales of iPhones during the launch weekend? Do realize Apple is looking at a tidalwave of cash coming in from now until the end of the year? They can afford to raise the dividend and do a few more buybacks.

 

[lildimsum7]

Before people start circlejerking saying how it's the end of Apple as we know it, etc...

Carl Icahn is a huge investor, yes, but his net worth is NOT capable of taking over Apple. He might as well be a homeless beggar compared to Apple's value.

What he's doing (attempting to manipulate the value of his own investment) is still wrong and should be highly illegal, but it's not really going to actually effect Apple as a company.

There's no manipulation. He's just giving advice on how to allocate capital to the benefit of shareholders. Activist investors do this often.

 

[scbn]

Give Icahn a break! What would be the good use of the piles of cash that Apple has? They should return a big chunk of it to the shareholders, one way or another. IBM has been doing aggressive stock buy backs for years.

 

[GadgetDon]

Here's how it will happen.

This talk will mostly be about the buyback, and Icahn will wave a carrot of significant investment from him and friends of his.

"But we'll need someone on the board to look after our interests,represent us. Just one seat. Anyone retiring anytime soon, or just not that interested?"

After that, the "suggestions" keep coming. "If you've got any money tied up in retirement accounts - it's not like they're working for us any more, we can use that for a bigger buyback." "That iPod business really is dying, you should sell it, it'll be big to someone else but to Apple it's small potatoes. Yeah, the Touch might be different, but why are you fooling around with the others?" "The Mac has never gotten any traction - it's time to give it up, sell that part, and focus on where the money is."

At some point, Cook says no. (Hopefully, he says it at the upcoming meeting - and he's smart enough and presumably knows enough about Icahn not to let his nose into the tent.) Then the whispering campaign starts, about how things could be so much better. All that money that's being held offshore should be brought onshore and paid out to the share holders, after taxes of course (Icahn now has a bunch of Washingtonites on his side). There's an attempt to oust Cook and put an Icahn puppet in his place. No, Icahn can't do this by himself, but he can play on other people's fears and greed.

Fortunately, Icahn isn't as invincible as he once was, Apple is still huge, still profitable, and still has a positive vibe (which Icahn doesn't have). So I'm not saying he'll succeed. But because Icahn took an interest, Apple is going to come out of this damaged, hopefully not fatally.

 

[wizard]

First of all, this is not a corporate raid - Icahn cannot force a decision to be made with the small stake he holds in Apple. He can have lunch with Tim Cook, and Mr Cook can still say 'no'. He can try to enter into a proxy war, but that will take ages, and I doubt he is willing to do that in the case of Apple.

It really comes down to two things, the percentage of stock that Icahn owns and any partners he can manage to get to vote his way. If you think Icahn is the only one looking at Apples cash value with longing you are missing the pulse of the market.

Second, people here comment on the fact that Icahn does not care about the real business of the company. Perhaps. The argument runs that none of the companies he has invested in during the past have benefited from his investments and that he is a parasite leeching funds off the company to make a quick gain. That may be true to some extent. However, corporate raiders do not take over (or invest in) companies where the management is doing a perfect job - typically, they only invest in companies where management is doing a subpar job and there are gains to be made from the time and money invested. Those gains have to be sufficient enough to warrant the huge investments and time spent, so that means the management must truly be doing something inefficient.

Actually most of the above is ********. A publicly ran company can be perfectly managed and still subject to raiding by investors. It is all about opportunity to gain dollars.

This whole activity is simply a form of correction, where market participants monitor the management and take action if capital can be deployed more efficiently somewhere else.

Or it can be seen as a way to increase personal wealth.

Without knowing that much about apple's business, it seems that Apple can return at least 50 billion in cash to investors and still have a sufficient cushion to invest in R&D and save for a rainy day. Perhaps the investors would prefer to invest that 50 billion in biotech, or semiconductors, or even cereal companies. As owners of the company they have certain rights to demand the cash back.

It really depends upon long term goals. For example if Apple has a long term goal,of buying AT&T or some other large corporation it may need the cash reserve it has. Further Apples demands for chips just keep growing every year, even a partnership to build a foundry could absorb a huge amount of cash. Apple is a single company having a massive impact on the semiconductor foundry business to the point that no one foundry can handle their needs. As such they may have no choice but to invest heavily in this sector.

 

[foxnews1]

Icahn is like wolves, and he smells blood from a wounded prey, Apple.

He was just done with another wounded prey, Dell.

as predicted, after SJ, growth will be stagnant with the current size of apple. there are more chances for stock to go down than up, as mobile market is starting to mature and saturate. Where to innovate from here? TV?

 

[macchiato2009]

This Icahn guy seems like a pain in the ass.

Tim Cook probably dodges his calls 10 times a day.

just because Icahn owns x% of Apple, i'm pretty sure that the guy believes he's now in charge and he can give orders

 

[giantfan1224]

Icahn is like wolves, and he smells blood from a wounded prey, Apple.

He was just done with another wounded prey, Dell.

Wounded prey with that balance sheet? Please.

 

[foxnews1]

Wounded prey with that balance sheet? Please.

Growth and stock price going up are the concern here, not current cash.