Icahn says Apple board is ‘working against shareholders’ then buys $500M more shares

By , Jan 22, 2014

Billionaire-Investor-Carl-Icahn-Buys-More-Apple-Stock

Greedy activist investor Carl Icahn has escalated his anti-Apple rhetoric on Wednesday after recently filing a proposal to put his aggressive stock buyback proposal up for a vote. Apple responded by confirming that any changes to its own corporate stock buyback program will be discussed in the “first part of calendar 2014,” likely at the upcoming shareholder meeting in February.

Be that as it may, Icahn now feels the Apple board is “doing great disservice to shareholders” by refusing to boost the company’s buyback markedly, according to a tweet today. An in-depth letter will follow soon, the shark investor ominously announced.

At the same time, Icahn announced buying an additional half a billion dollars worth of shares, pushing his stake in the iPhone maker to north of a respectable $3 billion. He called the latest investment a “no brainer”

Icahn last August announced that he’d taken a large position in $AAPL. He’s been presumptuously pushing for a significant increase of Apple’s buyback ever since.

After meeting with Tim Cook on several occasions, Icahn discovered that the Apple CEO wouldn’t budge so he scaled back his original $150 billion proposal to “only” $50 billion.

If Apple appeased to Icahn’s requests, the company would borrow many more billions of dollars, in turn exposing itself to uncertainty and increasing risk. Apple’s $150+ billion cash horde works out to about one percent of the U.S. gross domestic product.

As Richard Waters of Financial Times points out, with nearly $150 billion in its coffers, “Apple is sitting on close to ten per cent of corporate America’s cash.

By the way, a precatory proposal does not bind Apple executives to implement Icahn’s buyback proposal, even if the majority of shareholders approved it.

The problem with Icahn: predatory tactics.

He typically buys massive amounts of shares, essentially buying himself the right to install minions on a company’s board, which gives him a leverage to seek concessions and even push for board/CEO changes, as is his wont.

Speaking to CNBC today, Icahn argued that he’s actually better off if Apple does nothing because “I plan on buying more of Apple’s stock”.

Apple is a culture with a great ecosystem. What bothers me a hell of a lot is that billions of dollars is just sitting there.

“What they’re doing I think is ludicrous in not taking it up right now,” Icahn said of the Apple board’s reticence to raise the company’s ongoing share buyback.

He insists he’s not criticizing the Apple board or the management, but points out “there’s no on on Apple’s board that’s finance guy”. I will not go into when the last time I spoke to Apple CEO Tim Cook was,” he said. “We have a good relationship.”

Luckily, Cook has proven thus far that he can’t be pushed around – the Apple board is all Steve Jobs people – and I hope that the company won’t cave in to Icahn’s pressure.

Otherwise, he could ruin the only truly thriving American corporation left standing, which brings me to my thought of the day: Apple should pull a Dell and take itself private.

This would disentangle Apple from nonsensensical pressure from big shot investors. If anyone is working against Apple and its shareholders’ interest, it’s Icahn himself.

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  • DopamineAddicted

    i hope a huge and great company like apple won’t allow this old guy with lots of money to push them around. that would suck.

  • FrankensteinBlack

    Steve would have told Carl to Pis-Off!!

  • https://twitter.com/MrElectrifyer MrElectrifyer

    If Apple doesn’t want his ‘problems’, why didn’t they buy him out when he asked for it? If they couldn’t ‘afford’ it, it implies this guy owns a big % of Apple and is one of the main reasons Apple exists.

    • James Bailey

      He owns less then 1% so I don’t think they have much to worry about.

    • Rowan09

      Why would they need to buy him out? He’s a shareholder he can just sell his shares if he’s not happy.

  • n0ahcruz3

    Greedy activist lol

  • La Cucaracha

    Icahn NOT