$32 Billion Enough for Icahn
Icahn haters will have to hold off on calling the man “greedy”—at least for today. The billionaire activist investor, who owns about $3 Billion in Apple shares, has ceased calls for the consumer technology giant to repurchase $50 Billion in shares.
Feb. 10 at 10:48 AM
In an open letter to Apple shareholders, Carl Icahn said that the company’s recent share buybacks and product road map have encouraged him to drop his proposal. He believes the company is on track to repurchase $32 billion in shares during the fiscal year.
Apple has repurchased $14 billion in stock in the past couple weeks in response to a sharp post-earnings sell-off. The stock is still down more than 5.6% since Jan. 27 when the company’s guidance and quarterly iPhone sales disappointed some investors.
Feb. 10 at 10:44 AM
Icahn wrote: “Additionally, we are pleased that Tim and the board have exhibited the ‘opportunistic’ and ‘aggressive’ approach to share repurchases that we hoped to instill with our proposal. It is our expectation that Tim and the board continue to exhibit this behavior as fiduciaries to the shareholders since they clearly seem to agree that our company continues to be extremely undervalued, and we all share a common optimism with respect to the company’s bright long term future.”
Icahn also said he was influenced by Institutional Shareholder Services, a proxy-advisory firm which had recommended Apple shareholders reject the aggressive buyback proposal. “We do not altogether disagree with their assessment and recommendation in light of recent actions taken by the company to aggressively repurchase shares in the market,” Icahn wrote.
Investors responded positively to the news. The stock is up nearly 2%.
Not all cashtaggers are pleased, however. Apple has nearly $159 Billion in cash on hand. Even with a mystery new product category coming out, some doubt the company needs such a war chest at the ready.
Feb. 10 at 10:23 AM
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