Icahn was able to get Apple to agree to put his share buyback plan on the proxy statement for the annual meeting to be held in late February. That means shareholders will get to vote on the non-binding proposal. Icahn wants Apple to buy back the stock because those shares would automatically be canceled. That lowers the amount of Apple stock in the market and has a two-fold effect. One is that it changes the balance of supply and demand. Fewer shares available for purchase could bring on a rally in the stock. The other reason is a little more complicated. By reducing the number of shares outstanding, Apple's earnings per share will increase which would make the stock appear undervalued to some funds, leading to a rise in the stock. Nothing is guaranteed, of course, and we are certainly not making stock recommendations.
Icahn, though, doesn't mind giving investors a tip. After watching Apple rise from $468 when he first tweeted about his position in August, to the current price of $555, the billionaire says that buying the stock remains a "no brainer". But make no mistake about one thing. Icahn didn't get rich from being altruistic. He is in this so that he can turn a profit, not because he loves the iPhone, or other investors for that matter.
Carl Icahn tweets about Apple
source: @Carl_C_Icahn via AppleInsider