Icahn takes advantage of Apple's falling stock price and buys another $500 million of the shares

Icahn takes advantage of Apple's falling stock price and buys another $500 million of the shares
Imagine being able to call your broker to buy $500 million of Apple's falling stock. That is exactly what billionaire investor Carl Icahn has done this morning, according to a tweet sent out by the activist investor. That title doesn't mean that Icahn likes to support causes, other than his own wealth. He is an activist in the sense that he likes to buy shares in a company to gain some sort of "in" with the board, and then makes suggestions that will bring a temporary rise in the price of the stock. Once that happens, Icahn is gone like the wind, leaving long term investors holding the bag.

The former options trader and Arbitrager (hence the love of short term profits) is demanding that Apple borrow $150 billion at low rates, and use the funds to buy back $150 billion of it's own stock. That would accomplish two things. It would reduce the number of shares available for purchase, changing the supply-demand balance of the stock, and raise earnings per share figures.The latter is used to determine the P/E ratio, which is a rather off the cuff way of determining if a stock is cheap or dear. Icahn has said that such a buy back would raise Apple's share price by 33%. A vote on the buyback is included on the proxy ballot that shareholders will receive for the annual meeting on February 28th. Apple suggests that holders vote against it (natch!).

Today's purchase of Apple shares by Icahn was done as the stock has tumbled 7% after Apple disappointed investors on Monday. In the last two weeks, he has added over $1.5 billion worth of Apple stock to his portfolio, and now owns more than $4 billion worth of the stock.


source: @Carl_C_Icahn

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20 Comments

1. Mrmark

Posts: 401; Member since: Jan 26, 2013

That's not inside trade that he is doing ?

2. darkkjedii

Posts: 31331; Member since: Feb 05, 2011

Dude has bank.

3. Alan01

Posts: 627; Member since: Mar 21, 2012

No. Insider trading is the use of material, non-published information. If anything, he is a bully. He buys a ton of stock and then tries to force his ideas for pumping up the stock on the board. Most companies will give in just to get rid of him. Alan F.

9. QWIKSTRIKE

Posts: 1459; Member since: Mar 09, 2010

Very true, but you know Alan that insider trading is a fine line between what is and what is not. Raj Rajaratnam and his buddies skewed the lines. I would not be surprised if this is not some move that caused the stock to tank by false data spread by analyst and shorts to allow someone like Icahn to get in at a lower price. I have seen so much scamming you never know what is what any more. Even the media like CNBC has played to hedge funds and guys like Icahn to talk about a stock to raise or lower the price due to news reports! The SEC turns a blind eye because money is being made and when Bush was in office the SEC was scaled back!

4. power_x

Posts: 264; Member since: Aug 28, 2013

A very iRich iCahn

5. ZeroCide

Posts: 816; Member since: Jan 09, 2013

When the stock flops even more he is going to wish he didn't.

7. darkkjedii

Posts: 31331; Member since: Feb 05, 2011

You guys hate apple so much, you even follow the stock market cause of them. That's impressive.

8. ZeroCide

Posts: 816; Member since: Jan 09, 2013

Not really so much as follow as it is thrown into peoples faces by the main media.

10. darkkjedii

Posts: 31331; Member since: Feb 05, 2011

No you follow it cause hate em or love, you're infatuated with apple.

14. joey_sfb

Posts: 6794; Member since: Mar 29, 2012

Funny, you should be aware of apple fan being infatuated with apple. I don't think the rest of the world would be so interested if apple fans aren't so responsive to championing apple on every related news. For example you don't see me posting nasty things on every LG related articles even when LG is a bigger rival to Samsung than Apple in Korean.

17. jroc74

Posts: 6023; Member since: Dec 30, 2010

I bought Apple stock when it was $600 a share....impulse buy. I sold before it started tanking. The few investments I did make wound up making me almost $1000 profit...but the stress and ignorance wasnt worth it. Sold everything and havent invested since. Sold Zynga before it started dropping. Cant remember which stock made me the most money. I WISH I woulda bought Apple in the 90's. My brother had a tip about Merck.. ....he had a chance to get in at the beginning and didnt...I know he's kicking himself about that decision.

20. pixel8or

Posts: 84; Member since: Jun 10, 2010

He's not going to care. He's just playing around.

6. AfterShock

Posts: 4147; Member since: Nov 02, 2012

What a preek. Kind of hope he loses big in near future.

15. joey_sfb

Posts: 6794; Member since: Mar 29, 2012

Yes he is a preek but I do think he will succeed on Apple's cash reserve expense. People buy share to make money and his scheme do help Apple share holder made 33% return and which share holder don't want quick cash out. Being an investor, most would bleed the company dry if they can make quick buck and move on to the next company.

11. superduper

Posts: 151; Member since: Oct 20, 2013

Is Carl Icahn an engineer? No. Is Carl Icahn a software programmer? No. Is Carl Icahn an industrial designer? No. Than could Carl Icahn please stop trying to run the company for his own benefit! :-@

12. zgnilejablko

Posts: 2; Member since: Jan 28, 2014

Why don't you leave reporting on financial issues to Money and instead concentrate on technical aspects of the phones.Or is it too much to ask?

13. alrightihatepickingusernames

Posts: 474; Member since: Dec 29, 2013

PA's gotta milk it.

16. jellmoo

Posts: 2628; Member since: Oct 31, 2011

Many of us are actually interested in these topics, especially with an angle from a more tech rather than finance related site. Might I suggest just skipping past these articles?

18. zgnilejablko

Posts: 2; Member since: Jan 28, 2014

Would you buy a car on advice of a financial magazine?Would you be even interested in what they think about newest supercharged engine and its performance?Just stick to your area of expertise so you will not become "jack of all trades"

19. jellmoo

Posts: 2628; Member since: Oct 31, 2011

I have no idea what you mean. It's an area of interest, that's all. I can visit financial sites to get that aspect of the reporting and tech sites such as this one to get the other side. Again, you are free to skip by articles such as these. Just because you aren't interested doesn't mean that everyone is not.

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