Seeking Alpha

Icahn to keep pushing for larger Apple buyback, has $2B stake

  • Discussing his lobbying for a $150B Apple (AAPL +2.5%) buyback on CNBC, Carl Icahn promised he's "not going away until [Apple hears] a lot more from me."
  • Icahn refused to share Tim Cook's reaction to his proposal, but did say the discussion "got a little testy" due to CFO Peter Oppenheimer's presence. He added his stake in Apple now stands at $2B (still less than 0.5%).
  • Apple is trading near its session highs. Credit analyst Tim Backshall observes the company's borrowing costs are now notably higher than they were in April, when the company raised $17B in debt to help pay for its buyback efforts.
Comments (25)
  • vbbv
    , contributor
    Comments (71) | Send Message
     
    Higher buyback would be nice, but personally, I would like to see a significant increase in the dividend as well...
    1 Oct 2013, 12:31 PM Reply Like
  • GaltMachine
    , contributor
    Comments (1135) | Send Message
     
    This just seems so close to insider trading based upon inside info that I wonder how he can go on TV and say stuff like this.

     

    When you meet a CEO in private and then trade on that stock in the aftermath of that doesn't that violate the rules?
    1 Oct 2013, 12:35 PM Reply Like
  • Justin Jaynes
    , contributor
    Comments (3078) | Send Message
     
    Here is the thing that I find hard to swallow - there was the announcement regarding TC's salary being tied to AAPL share price a while back. Now you have Icahn meeting with TC, trying to coax a larger buyback.

     

    TC's reward is that it holds the stock price up, therefore directly affecting his salary. Icahn's reward is that he gets the capital appreciation from the buyback and dividend, and can later trade out of the stock once the buyback is complete.
    1 Oct 2013, 01:22 PM Reply Like
  • Andreas Hopf
    , contributor
    Comments (7969) | Send Message
     
    Sounds like $BBRY shenanigans on a higher level.
    1 Oct 2013, 02:20 PM Reply Like
  • wilsondoc
    , contributor
    Comments (47) | Send Message
     
    I plan to ask for a lunch w/ Tim Cook, also. I should have the same access as Icahn does. Just fair. I will buy, in case that is an issue.
    1 Oct 2013, 12:40 PM Reply Like
  • AutoRegressive
    , contributor
    Comments (179) | Send Message
     
    Are you a world renowned investor who is giving Apple free advice?
    1 Oct 2013, 12:52 PM Reply Like
  • sbkamm
    , contributor
    Comments (40) | Send Message
     
    What he actually is, is a world renowned egomaniac who is trying to manipulate the stock price to his own benefit, and his alone.
    1 Oct 2013, 12:58 PM Reply Like
  • AutoRegressive
    , contributor
    Comments (179) | Send Message
     
    What he is doing is voicing his opinion about apples absolutely horrific capital allocation which is one of the major reasons it trades at such a discount.
    1 Oct 2013, 01:12 PM Reply Like
  • Jale
    , contributor
    Comment (1) | Send Message
     
    I feel exactly the same way.
    1 Oct 2013, 03:18 PM Reply Like
  • rrose39
    , contributor
    Comments (681) | Send Message
     
    Not sure, but if his efforts lead to stock price appreciation, I think he's also doing it for my benefit and a lot of other people too
    1 Oct 2013, 03:55 PM Reply Like
  • AnselWade
    , contributor
    Comments (21) | Send Message
     
    Gotta wonder why Icahn is even discussing or letting the world know about their meeting ....

     

    In my humble opinion, Apple should be buying back as much stock as they can afford .... I remember when Apple only had 40 billion verses the 160 billion today and Jons saying they needed the monies to buy companies and who knows what else but $160 billion is too much ....

     

    Let's have a special dividend and increase the dividen as well .....
    1 Oct 2013, 12:42 PM Reply Like
  • kimboslice
    , contributor
    Comments (1476) | Send Message
     
    Icahn should shut up already.
    I will let Apple decide what they think is best for the company, its employees and its shareholders.
    1 Oct 2013, 12:50 PM Reply Like
  • Stan The Man
    , contributor
    Comments (144) | Send Message
     
    This blurb quotes some analyst as saying the "company's borrowing costs are now substantially higher [than in] April." I assume he meant their borrowing costs WOULD BE higher than in April, if they borrowed, not that they are already paying higher rates. Presumably their borrowing costs on their existing debt are fixed. Another way of looking at that, is they could buy back the debt they issued in April at a significant discount because rates have gone up since then. In any case, Apple is still presumably piling up more and more cash, not borrowing currently.
    1 Oct 2013, 12:55 PM Reply Like
  • Gary Bushwacher
    , contributor
    Comments (515) | Send Message
     
    For starters, I am shocked Cook would even entertain listening to Icahn. And I agree it smacks of insider trading.

     

    Icahn is doing exactly what I expected.
    It started out at being "friendly discussions"
    And has become "testy"

     

    It can only get worse because Icahn wants Apple to almost empty the warchest at $150M

     

    That's simply self-serving and not the right thing to do.

     

    Cook's biggest mistake was taking the first call.
    1 Oct 2013, 01:12 PM Reply Like
  • kimboslice
    , contributor
    Comments (1476) | Send Message
     
    I predict that from now on Cook will let Icahn talk to Oppenheimer.
    1 Oct 2013, 01:16 PM Reply Like
  • Barnski
    , contributor
    Comments (16) | Send Message
     
    If they take 150$ billion credit to buy back the shares, then I don't quite see how that is going to empty their warchest. They can probably get tax credits for the interests and repatriate some of their cash to invest in the US.
    Since Icahn says it is a no brainer, I assume he sees it as a win-win plan. But I understand any hesitation on Apple's part and would only be surprised if they went just naively into executing this plan.
    1 Oct 2013, 03:18 PM Reply Like
  • cshoxie
    , contributor
    Comments (269) | Send Message
     
    Sounds like something out of the Godfather. " I'm going to make you a deal you can't refuse."
    1 Oct 2013, 09:02 PM Reply Like
  • Clayton Rulli
    , contributor
    Comments (2509) | Send Message
     
    I wonder what they ate at lunch. Carl had APPL pie 4 sure
    1 Oct 2013, 01:18 PM Reply Like
  • what do I know
    , contributor
    Comments (1049) | Send Message
     
    . Unless the conversation was not edible to everybody this conversation could be an issue with SEC with reference to "insider information" and I do not know why Mr. Cook agree to this, because he has to account for his time.
    . I hear Mr. Icahn keep saying "we" all the time but Mr.. Cook did not want to keep pushing Apple for this buy back, this buy back was all Mr. Icahn's idea.
    . You know by issuing "debt" you can not increase stock holders wealth.( it is part of well known finance theorem)
    1 Oct 2013, 01:42 PM Reply Like
  • bfmil
    , contributor
    Comments (221) | Send Message
     
    See what I mean. Market manipulation at its finest. The stock market is so overtly corrupt it's sickening. The two men get together. Icahn orders Cook to buy back 150 billion. Suddenly the stock jumps 11+ points in a few hours. Us small investors are being given the shaft.
    1 Oct 2013, 03:16 PM Reply Like
  • rrose39
    , contributor
    Comments (681) | Send Message
     
    If the stock price jumped 11+ points, and you are long AAPL, then how is it you think that you're getting the shaft?

     

    I don't get that at all.
    1 Oct 2013, 03:57 PM Reply Like
  • HCWHunter22
    , contributor
    Comments (60) | Send Message
     
    Yes, exactly how is it that small investors are given the shaft if our stock jumps 11+ pts. in a few hours? Are you short the stock or were you just waiting for a lower price to buy in?

     

    Personally, I welcome 11+ pt. gains any day of the week. I still think that AAPL is undervalued, but I have a full long position in AAPL right now. I'm also hoping for another dividend increase soon.
    1 Oct 2013, 05:03 PM Reply Like
  • scott trader
    , contributor
    Comments (4646) | Send Message
     
    Small investors can buy one share or a 1000 shares nothing holding you back from buying except fear..
    1 Oct 2013, 04:54 PM Reply Like
  • june1234
    , contributor
    Comments (2553) | Send Message
     
    When Carl tweets markets listen
    1 Oct 2013, 05:21 PM Reply Like
  • Sammy Lee
    , contributor
    Comments (299) | Send Message
     
    I can't help but think this might be a giant pump and dump orchestrated by Icahn. Don't see Tim cook caving in so easily and losing his war chest.
    1 Oct 2013, 07:19 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|