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Icahn investment in Apple hits $3 billion; says buying the stock is a "no brainer"

Posted: , by Alan F.

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Icahn investment in Apple hits $3 billion; says buying the stock is a
Investor, Greenmailer and man about town Carl Icahn has increased his stake in Apple by another half a billion dollars which takes his position to $3 billion worth of Apple shares. Icahn revealed this in a series of tweets in which he continues to lambaste the board of the tech titan for not buying back its own stock. For those who stay away from Wall Street, Icahn is demanding that Apple use $150 billion of its own cash to buy back Apple stock.

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

Carl Icahn tweets about Apple


source: @Carl_C_Icahn via AppleInsider

10 Comments
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posted on 22 Jan 2014, 12:02 4

1. domfonusr (Posts: 280; Member since: 17 Jan 2014)


An Apple stock buyback would also increase Icahn's percentage share of the total outstanding stock that remains. He's no dummy.

posted on 22 Jan 2014, 12:40 2

3. Alan01 (Posts: 170; Member since: 21 Mar 2012)


Actually, that is not true. If the company commences a buy back, a pro rata amount of Icahn's stock would be included in the buy back, thus keeping his percentage of ownership the same.

Regards,
Alan F.

posted on 22 Jan 2014, 12:55

6. domfonusr (Posts: 280; Member since: 17 Jan 2014)


Really??? Wow!

posted on 22 Jan 2014, 19:53

10. roscuthiii (Posts: 1785; Member since: 18 Jul 2010)


"Investor, Greenmailer and man about town Carl Icahn has increased his stake in Apple by another half a billion dollars which takes his position to $3 billion worth of Apple shares." - Alan F. (From the article.)

Icahn just increased his stake, wouldn't he still own more than most either way, thus making the OP's post a little more accurate?

posted on 22 Jan 2014, 12:36 2

2. Finalflash (Posts: 1412; Member since: 23 Jul 2013)


What kind of idiots does he think Apple's management and directors are? They have some of the sneakiest and most under-handed tactics in the industry and he takes them for idiots or something? He really decided to go after the wrong company this time. It just isn't going to work even in the smallest sense.

posted on 22 Jan 2014, 12:41 6

4. TylerGrunter (Posts: 859; Member since: 16 Feb 2012)


This guy has really a plan, tell people that you are buying so they also buy and the stock and make the price rise. Manage that Apple do the buy back to rise even more. Then sell and leave all the other buyers with a low valued stock.
The only one that gets benefits from the plan: him!
I hope Apple management don´t go for it, for the shake of all the other stockholders.

posted on 22 Jan 2014, 12:44 3

5. AfterShock (Posts: 2034; Member since: 02 Nov 2012)


That is my reading on it too.

posted on 22 Jan 2014, 12:59

7. domfonusr (Posts: 280; Member since: 17 Jan 2014)


Well, then its a question of what percent of it he owns now. If he ever sells in a giant lump, how much of the stock will be sold at that point? If the percentage isn't really high, then Apple suffers only a small bounce-back toward the bottom, and it won't last long if it is done in the middle of a buyers' market. It might not hurt Apple hardly at all, and Icahn walks away with a fortune.

At first I was thinking that this was a power play to increase his percentage of ownership in the company, but Alan says it can't be, so now it all can only have to do with money, straight up.

posted on 22 Jan 2014, 13:34

8. ZeroCide (Posts: 683; Member since: 09 Jan 2013)


No-brainer untill stock tanks.

posted on 22 Jan 2014, 14:33

9. androiphone20 (Posts: 1391; Member since: 10 Jul 2013)


he needs all the votes he can get for his proposal, I'm still voting no.

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