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AAPL Stock: 98.73 ( -0.29 )

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Icahn claims expanded buyback could push Apple shares up to $1,250

updated 10:31 am EST, Fri November 15, 2013

Letter to Cook confirms $2.5 billion in share holdings

Investor Carl Icahn has publicly released a letter he originally sent to Apple CEO Tim Cook in late October. The letter -- issued to shareholders overnight -- confirms that Icahn now owns roughly $2.5 billion in Apple stock, and continues pushing for expanding the company's share buyback program from $60 billion to $150 billion, while having it take effect immediately instead of running through 2015. Icahn claims that his plan could ultimately raise Apple's share price to as high as $1,250, which would make it more valuable than Google.

The letter predates Icahn's recent "good conversation" with Cook. It's unclear though if Apple executives are genuinely interested in Icahn's proposal; neither party has commented on the progress of talks, and Icahn himself admitted that an early dinner meeting became "testy" over whether shareholders should get involved in deciding how Apple executives spend cash.




by MacNN Staff

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  1. prl99

    Dedicated MacNNer

    Joined: 03-24-09

    Icahn wants Apple to really go into debt to pay for this buy back, which in my opinion would cause more potential harm than good. Would Icahn bail out Apple if it doesn't work? Of course not. It's ironic. Apple really doesn't have any debt, so why does Wall Street want Apple to go into debt? To make them money of course. None of this has anything to do with the long-term future of Apple, only the short-term future of AAPL.

  1. RockoBoffo

    Fresh-Faced Recruit

    Joined: 06-12-13

    Just give Icahn 5 billion dollars.

    But I am beginning to agree Apple should not invest in R&D, under Cook that wouldn't result in innovation.
    Innovation is going to come from other companies now. Cook is just not a visionary. He's closer to Icahn than he is to Jobs.

  1. svencito

    Fresh-Faced Recruit

    Joined: 12-12-99

    "Icahn claims that his plan could ultimately raise Apple's share price to as high as $1,250, which would make it more valuable than Google."

    Apple is already more valuable that Google, only the share price (not the value) is currently half the share prize of Google.

  1. prl99

    Dedicated MacNNer

    Joined: 03-24-09

    @rocko Cook doesn't have to innovate. That's not his job. Steve Jobs created a company that is well stocked with excellent people in all areas. Jony Ives does a lot of the innovation as does his team. Cook is there to make sure Apple runs well, he doesn't have to do everything.

  1. jpellino

    Fresh-Faced Recruit

    Joined: 10-29-99

    This is silly. Buyback raises the price by reducing the number of public shares. Sure it might get to $1,200. Who knows - it could get to $30,000 or more if they buy back everything but his. It only benefits the people who already own shares. It makes the shares less attractive to a wider range of potential owners, it inflates the p/e ratio. This isn't 2001. This isn't Twitter. Apple makes tangible hardware and its value to investors is reflected in potential earnings from retail sales. Which will be realized on the basis of those successful sales, not by manipulating the stock price. The increased dividend was a reasonable move, given the cash on hand. Going into debt to make more money for your shareholders sake is questionable - the retirement of said debt may or may not be realized, as re-introducing the stock for public sale can potentially lower its cost based on volume and demand. So in the end the only gain realized will be from actual value, which is based on performance - it'll be there with or without the buyback. I bet Icahn bought AAPL well below $700 and doesn't see a way out from under it with patience and performance, so he's using the biggest hammer he can find. Yes, BRK-A is consistently north of $100k, but it's not being bought by everyday investors. BRK-B is. Check the volumes.

  1. mac_in_tosh

    Fresh-Faced Recruit

    Joined: 12-14-11

    What a system - people like this can manipulate a company so as to make a quick buck, without having any interest in the long term health of that company.

  1. mac_in_tosh

    Fresh-Faced Recruit

    Joined: 12-14-11

    RockoBoffo - do you think Jobs envisioned and invented all those things by himself?

  1. Paul Huang

    Dedicated MacNNer

    Joined: 09-18-99

    He may kick the bucket in 2015, that's why he wanted it done in 2014.

  1. Geoduck

    Junior Member

    Joined: 01-14-10

    "Icahn claims that his plan could ultimately raise Apple's share price to as high as $1,250, which would make it more valuable than Google."
    And this would benefit Apple How?
    It wouldn't actually benefit anyone but Icahn and his ilk.
    I suspect though, that this is a ploy by Icahn to drive shares up. He releases the letter. Suckers think the stock WILL go to $1,250, and rush in to byt APPL. Then when APPL floats up to $800-900 on speculation Icahn cashes in and cleans up while those that fell for the ruse lose their shirts.

  1. Flying Meat

    Dedicated MacNNer

    Joined: 01-25-07

    Kick that Icahn to the curb. He doesn't have any real interest in Apple's health. It's only about the money to him.
    So what if J. Q. Public - long term investor - can't afford even one share. I'll be rolling in it!!!

    It's a stupid idea on a lot of fronts.

  1. obdulax

    Fresh-Faced Recruit

    Joined: 03-28-07

    If you are going to post a stock market related article, please make sure the author understands the stock market.

    "his plan could ultimately raise Apple's share price to as high as $1,250, which would make it more valuable than Google"

    LOL, apple is already much more valuable than GOOG. AAPL market cap is $473 billion and GOOG is $345 billion. Comparing price/share is meaningless unless both companies have identical shares outstanding.

  1. aardman

    Fresh-Faced Recruit

    Joined: 11-18-09

    We should give this mountebank a lot less attention than he's getting. He ust wants to bump up the share price temporarily, make a killing selling his shares, then leave the long term stockholders holding the bag.

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