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Icahn speaks to Cook, wants Apple to buy back shares

Posted: , by Alan F.

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Icahn speaks to Cook, wants Apple to buy back shares
According to the Wall Street Journal, investor Carl Icahn owns over $1 billion in Apple stock and could be ready to shake things up at Cupertino. In the 1980's, the mere mention that Icahn owned a position in a company was enough to send the stock surging higher in anticipation of a takeover bid. On Tuesday, that scenario repeated itself as a tweet from Icahn about building a stake in Apple sent the stock up 5% for the day.

Apple's shares have fallen sharply since peaking at slightly over $700 a share on the day that the Apple iPhone 5 launched. Now, Apple's board is said to be concerned about the lack of innovative new consumer products being launched, and competition from Samsung in the smartphone business. And while Apple is expected to launch the Apple iWatch, delays have pushed back the release of the device until next year. Meanwhile, Samsung is expected to show off its Samsung Galaxy Gear smartwatch as soon as September 4th in Berlin.

"This is bad for Apple. They don't need any distractions (while trying to) regain their market share lead in phones. I expect Icahn to run a play similar to Dell, where he is questioning how Apple uses their cash and how they are making decisions."-Patrick Moorhead, analyst

While Icahn clearly doesn't have the wherewithal to purchase Apple himself, his MO is to shake up and cajole the board and executives until they make the changes that he believes will lead to a higher stock price. Recently, the investor has been sending out tweets to Dell explining his opposition to founder Michael Dell's plan to take the company private. His idea for Apple is to let the company use its gilded edge credit rating to borrow money at 3% and use those funds to buy back chunks of the stock at $525. Buying back the stock lowers the number of shares outstanding and raises the earnings per share figure that many investors use to value a company. Even with no earnings growth, Icahn sees Apple rising back to $625.

"This is a no-brainer to go buy stock in a company that can go borrow. Buy the company here and even without earnings growth, we think it ought to be worth $625."-Carlk Icahn

While this is bad new for Apple executives, it should be good news for Apple stockholders as Icahn has a habit of adding value to stocks. Just make sure you exit before he does, because once the word is out that he is out of a position, the shares usually drop. Icahn did have a talk with Apple CEO Tim Cook, a conversation that Apple spokesman Steve Dowling called "very positive". The investor said that he hopes to talk with Apple and Cook again soon.



source: WSJ via USAToday

19 Comments
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posted on 13 Aug 2013, 20:31 3

1. fanboy1974 (Posts: 1291; Member since: 12 Nov 2011)


Is this www.phonearena.com or www.applestockarena.com?

posted on 13 Aug 2013, 20:34

2. TROLL (banned) (Posts: 4851; Member since: 13 Apr 2012)


I have bought shares on Apple 2 years ago and I still have it till know.

Who cares! I'm waiting for it to drop to 400 and below so I can sell it of

posted on 13 Aug 2013, 20:44 5

4. darkkjedii (Posts: 12635; Member since: 05 Feb 2011)


Lmao yeah dude, we believe you. All this time, all these apple stock articles and now you post that? Mmm hmmm yeahhhhhh... Your boy Dorothy69 is coming to your rescue. It'll be ok.

posted on 13 Aug 2013, 20:53

5. TROLL (banned) (Posts: 4851; Member since: 13 Apr 2012)


What is there to lie... I invested £100 on Apple, the FTSE100, Merril Lynch, BNP Paribas french Bank, UBS ammro and in inmarsat and Prudential

posted on 13 Aug 2013, 22:38 1

10. Dorothy69 (banned) (Posts: 498; Member since: 21 May 2013)


Don't expect him to know anything about World financial markets; if it doesn't involve asking the simple question, "M'am, would you like a transfer," he's clueless! I feel sorry for his poor passengers, I bet he knows them all by name and they treat him to some McDonalds!

posted on 14 Aug 2013, 06:02

14. darkkjedii (Posts: 12635; Member since: 05 Feb 2011)


You're a joke now on this site lol. Everyone looks at you as the site buffoon, the grown boy pretending to be a little girl SMDH. Oh yeah tell your lying buddy troll, apple stocks fell below 400 already a couple months ago, when they hit 388. He woulda sold off then, if he had them lol what F'ing miserable lonely jokes you two are. He's married wife bashing apple stock holder, and you're a girl LMAOOOOO! We believe you.

posted on 14 Aug 2013, 06:00

13. darkkjedii (Posts: 12635; Member since: 05 Feb 2011)


I told you your master would be along shortly lol. He's kinda like a puppy, shout and he comes a running.

posted on 14 Aug 2013, 08:13

16. TROLL (banned) (Posts: 4851; Member since: 13 Apr 2012)


Dark Dorothy a Android fan vs Apple fanboy so what's your point. You are no techy... Your a Fanboy. I remember all your posts last year you was a big time Apple Fanboy. ™

posted on 14 Aug 2013, 09:14

17. darkkjedii (Posts: 12635; Member since: 05 Feb 2011)


Have a nice week off. Goodbye, your boy Dorothy69 lost his #1 fan for a week.

posted on 14 Aug 2013, 13:10

18. Dorothy69 (banned) (Posts: 498; Member since: 21 May 2013)


Don't pay attention to her TROLL, I'm going to aim my next house landing just right: on a wedding for two Ügly peoples' in Vegas!!

posted on 15 Aug 2013, 06:09

19. darkkjedii (Posts: 12635; Member since: 05 Feb 2011)


As I said, a complete joke.

posted on 13 Aug 2013, 20:36 2

3. Droid_X_Doug (Posts: 5954; Member since: 22 Dec 2010)


Ah yes, Carl Icahn - the inventor of the term 'greenmail'. I guess it was inevitable that he would crawl out from under the rock he was hiding under.

posted on 13 Aug 2013, 21:27 1

8. Googler (Posts: 813; Member since: 10 Jun 2013)


One of the many things wrong with the stock market, in this case, one person shouldn't have the ability to sway values that much.

posted on 13 Aug 2013, 23:48 1

11. Droid_X_Doug (Posts: 5954; Member since: 22 Dec 2010)


Greenmail as Carl practiced it, involved taking a small (~3% - 5%) position in the target company. The next step involved pushing it under threat of a hostile takeover or other hostile action (like voting out internal board of directors for adverse candidates), to ultimately buy back his position at a significant premium over market. Companies found it was easier to buy him off (hence the term greenmail) as opposed to fighting him.

Somehow, I suspect the push for more innovation is coming from Carl. Buying back his position would then raise the value of everyone else's position.... Sound familiar?

posted on 13 Aug 2013, 20:57

6. cheetah2k (Posts: 869; Member since: 16 Jan 2011)


I Con, er.. I Can, no, wait Icahn has a vested interest in, well... only himself..

Troubled waters for Apple on the horizon maybe?

posted on 13 Aug 2013, 21:09

7. ZeroCide (Posts: 700; Member since: 09 Jan 2013)


If they but back that stock apple won't have that cash to get them throught hte hard times coming. They will soon end up like RIM.

posted on 13 Aug 2013, 21:48

9. AfterShock (Posts: 2983; Member since: 02 Nov 2012)


Do you hear me cook?!?!?

posted on 14 Aug 2013, 00:46

12. AwesomestMaximuss (Posts: 123; Member since: 09 Jul 2013)


No i cant,but i hope u r not cooking apples.

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