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Icahn: I wouldn't push Apple to buy Nuance

Posted: , by Alan F.

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Icahn: I wouldn't push Apple to buy Nuance
Former Greenmailer Carl Icahn, who owns $2 billion of Apple's shares, said on Monday that he has no intention of pushing Apple to buy Nuance Communication. Nuance is known for its voice recognition software including the software that powers  Apple's voice activated personal assistant, Siri. Talking at the Reuters Global Investment Outlook Summit on Monday, Icahn said that he would never "micromanage" and speak to Apple CEO Tim Cook about such a transaction.

The billionaire owns 3.9 million shares of Apple worth about $2 billion, and he also owns 16.9% of Nuance. A purchase of Nuance by Apple would have to be done at a premium to the current stock price, which would probably result in huge profits for Icahn. Nuance is known for its Dragon voice recognition software and in 2011 the company purchased swipe to type firm Swype for $100 million.

But right now, Icahn is not pushing Apple CEO Tim Cook to buy Nuance. What he is pushing Cook to do is borrow $150 billion at 3% interest and use the funds to buy back $150 billion of Apple shares. That would retire the stock, raise the earnings per share, and according to Icahn, raise the price of Apple's stock by 33%.

"That is something I would never micromanage and never even think of telling Tim Cook. It has zero to do with the fact that I'm involved with Apple."-Carl Icahn

So far, Apple has resisted the pressure from the investor, but don't expect him to give up easily. That is Icahn's usual game plan. He buys a huge position in a company he considers undervalued and cajoles the CEO into buying back stock or taking other actions that would bring the price of the stock up and allow the former options whiz to reap a huge profit.

source: Reuters

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posted on 18 Nov 2013, 22:03 6

1. Reluctant_Human (Posts: 904; Member since: 28 Jun 2012)

Then after he dumps his shares, Apple's stock would drop again to its current level or lower. Apple would owe interest on the borrowed money and not have anything to show for it..

posted on 19 Nov 2013, 00:45

3. Finalflash (Posts: 3527; Member since: 23 Jul 2013)

Well, then Apple would have $150 billion in cash still with a 3% interest on that but earnings of about 20+ billion per quarter as it does now. So they'd still be filthy rich and getting richer, but just with some debt.

posted on 18 Nov 2013, 22:53

2. spectrums (Posts: 127; Member since: 14 Nov 2013)

Don't Buy, Cause He is Not In Up have Money :)

posted on 19 Nov 2013, 05:53 2

4. superduper (Posts: 151; Member since: 20 Oct 2013)

This guy is obsessed with making a profit for himself. He probably knows nothing about technology and only sees the $$$. It's none of his business what Apple does with its cash. Pushing up the share price to a temporary high (before it comes crashing down) is pretty dumb. I'd rather see Apple invest in its supply chain, as it is doing with the sapphire investments recently, or even just save its cash for the rainy day. But please ignore the technologically illiterate bullies.

posted on 19 Nov 2013, 10:02

5. W.P._Android_in_that_Order (Posts: 208; Member since: 15 Feb 2012)

First of all, @superduper I agree with you completely. Also, this is the first time that I have seen your screen name and I like it.

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