Investor Icahn wants Apple to make $150 billion tender offer for the company's stock

Investor Icahn wants Apple to make $150 billion tender offer for the company's stock
Investor Carl Icahn has just scored a better than 400% profit after dumping his shares in Netflix. Now, he is turning his attention to Apple. The former "greenmailer" has written an open letter to Apple CEO Tim Cook urging Apple to make an immediate tender offer for $150 billion of Apple stock at the current price of $525. A tender offer at that price would allow Apple stockholders to sell their holdings back to the company which would lower the number of shares outstanding. This would raise the company's earnings per share figure which should lead to a higher stock price.

The long time stock market trader even computed that by borrowing the entire $150 billion at 3% and using the money to buy back the stock, it would produce an immediate 33% boost to Apple's earnings. That, said Icahn, would lead to an immediate 33% jump in the price of the stock assuming no change in the company's P/E ratio. The one time raider, who managed to avoid getting caught in the Michael Milken-Ivan Boesky insider trading scandal that defined the market in the 1980's, sees Apple's shares rising to as high as $1250 assuming that the shares receive a normal valuation instead of the discount they now have.

This isn't the first time that Icahn has tried to get Apple to buy back its stock. Back in August, he suggested the same plan to Apple via a tweet and subsequently met with Tim Cook. Icahn now holds 4.7 million shares of the Cupertino based tech titan which means that he added 700,000 shares recently. His stake is now valued at $2.5 billion. Cajoling companies that he invests in to buy back stock or take other moves to push up the stock price is how Icahn makes his money. So far though, Apple has refused to follow the investor's game plan and there is no indication that it will. Icahn has told a television audience on Thursday afternoon that he would consider asking shareholders to vote on his plan via a proxy vote which would force Apple executives to buy back the stock. Stay tuned!

The lengthy open letter from Carl Icahn appears below.



source: AppleInsider

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18 Comments

1. kozza3

Posts: 778; Member since: Oct 17, 2012

its all fiat anyways TROLLED

2. GrapeEyes

Posts: 248; Member since: Sep 01, 2013

no comment

3. Pdubb

Posts: 249; Member since: Aug 08, 2011

So basically he wants to make money without really spending any money. Sounds like one of those get rich schemes but this would probably work. I wish I were rich.

14. Finalflash

Posts: 4063; Member since: Jul 23, 2013

He is a complete douche, does this all the time. Buys a controlling stake, forces companies to artificially increase stock price at real damage to themselves, laughs all the way to the bank (probably one he owns). Cook probably isn't going to listen to this idiot, likely because he is financially savvy enough to know this guy is just looking out for his own back.

17. Reluctant_Human

Posts: 913; Member since: Jun 28, 2012

Well said finalflash. People like him won't think twice about destroying a company if it can turn him a prophet and constantly do things that should be or are illegal.

4. scotjo

Posts: 6; Member since: Oct 24, 2013

It's difficult to wrap my head around the scale of this proposal. All the average user wants from Apple is a phone they can afford.

5. tedkord

Posts: 17413; Member since: Jun 17, 2009

So Icahn wants people to sell the stock at it's current price so he can sell it right after at a much higher price? Why works anyone sell it back to Apple if it were about to explode?

6. PAPINYC

Posts: 2315; Member since: Jul 30, 2011

Kudos to him. He's a smart man and, obviously, he wants to increase stock value before it totally tanks. Oh, and it's actually Carl iCahn because heCahn..

7. tedkord

Posts: 17413; Member since: Jun 17, 2009

Actually it's Carl iCon.

9. PAPINYC

Posts: 2315; Member since: Jul 30, 2011

Not true, he gives more to charity than anyone I know. Besides, he didn't tell ANYONE to go stand on line on September 20th, so how can you accuse him of such?

11. Finalflash

Posts: 4063; Member since: Jul 23, 2013

All the criminals have some charity front, its a small price to pay for making millions. Just look at congress, you pay them 10k and make 2 mill because of it. Just pay some charity with your dirty money, if you're good, the charity is a cash funnel you set up.

13. PAPINYC

Posts: 2315; Member since: Jul 30, 2011

Technically, it's a "Tax Shelter" and quite legal as, the laws governing such were passed by Congress itself and never vetoed by any U.S. President.

12. tedkord

Posts: 17413; Member since: Jun 17, 2009

What has people standing in line got to do with it? He's trying to convince Apple to buy back shares from everyday people at zero markup so his shares will go up in value. He's a con man. That's hardly the only story about him, BTW.

18. Reluctant_Human

Posts: 913; Member since: Jun 28, 2012

Your going to compare how much he donates to Warren Buffet? Someone who is 100 times smarter, better and more ethical than anyone out there when it comes to investments.

8. downphoenix

Posts: 3165; Member since: Jun 19, 2010

he is a crook.

10. MobileCaseReview

Posts: 242; Member since: Feb 10, 2012

LOL@ most of the comments made toward this. Obvious financial gurus with investment expertise at work.

15. Napalm_3nema

Posts: 2236; Member since: Jun 14, 2013

Oh, and here I thought all this time it was Steve Jobs and the employees of Apple who made the company great and profitable. Carl should go back to doing what he does best, making money for himself as a corporate raider, and leave Apple to do what they do best, make great products. He has absolutely zero idea what Apple really needs, and destroying the accrued funds they have in holding and adding debt removes the ability to perform acquisitions when and where necessary.

16. pongkie

Posts: 663; Member since: Aug 20, 2011

he's blowing an air balloon!!! apple don't listen to him

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