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Icahn would "test the waters" on Apple proxy fight if buyback plans spurned

  • During a CNBC talk discussing his letter to Tim Cook (AAPL +1.2%), Carl Icahn says he would "test the waters" regarding an Apple proxy fight if his calls for a bigger buyback are ignored.
  • With a market cap of $482B, Apple is much bigger than Icahn's historical proxy war targets, and his current stake remains below 1%. However, Icahn does claim to have received significant interest from major Apple shareholders regarding a larger buyback.
  • Apple has gradually moved higher on an up day for equities.
  • Earlier: Icahn discloses larger Apple stake, calls for $150B tender
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Comments (46)
  • wigit5
    , contributor
    Comments (4222) | Send Message
     
    Getting bolder O_O... interesting.
    24 Oct 2013, 12:24 PM Reply Like
  • kimboslice
    , contributor
    Comments (1660) | Send Message
     
    iCahn should drop dead.
    24 Oct 2013, 12:26 PM Reply Like
  • lh2soda
    , contributor
    Comments (57) | Send Message
     
    Is this MF serious? Man people like him is what makes being a public company horrible. Apple should do buyback like 100% of its outstanding shares and put most tech analysts, market makers, news reporters out of work.
    24 Oct 2013, 12:28 PM Reply Like
  • wigit5
    , contributor
    Comments (4222) | Send Message
     
    Does it have enough money to buy back all of its shares... and then if it does how will you profit from their execution/products down the road?
    24 Oct 2013, 12:30 PM Reply Like
  • lh2soda
    , contributor
    Comments (57) | Send Message
     
    Borrow $500bn. And with Cash pay off debt, it'll be in a 70/30 D/E. Apple should have the cash flow to satisfy interest payments on $350bn debt - $10.5bn / year on 3% int rate - effectively $7.5bn on tax adjusted basis. Apple currently generates $50bn from CFO with net income of $41.7bn. It has more than enough capacity to go private.
    24 Oct 2013, 02:14 PM Reply Like
  • Glenway Fripp
    , contributor
    Comments (1207) | Send Message
     
    BS
    25 Oct 2013, 02:37 AM Reply Like
  • owens7301
    , contributor
    Comments (108) | Send Message
     
    With average trade volume at around 12 million shares or so, he is not a bull in a china shop. All Cook has to do is add another $60 billion buyback within a shorter time frame and bump the dividend a couple of bucks a year and he is done. Icahn gets his $600/share number and around there as it is going there anyway and he shuts up...if that is possible. He is just making waves.
    24 Oct 2013, 12:41 PM Reply Like
  • Applocrat
    , contributor
    Comments (1008) | Send Message
     
    It is tragic that Icahn sets himself up as a freedom figheter: a bold,unconquerable soul struggling to liberate cash from corporate balance sheet.

     

    If he bought in the 400s he's likely already up some 20 percent. Which means that he has already made some 200 million dollars, if he chose to sell!Think about that. A man whi made hundreds of millions on one position acting as if he is victimized by the miserly company.

     

    My few hundred shares oppose his, for what it's worth.
    24 Oct 2013, 12:45 PM Reply Like
  • nguyenvanphuoc
    , contributor
    Comments (388) | Send Message
     
    "A man whi made hundreds of millions on one position acting as if he is victimized by the miserly company."

     

    I think you don't understand his motivation.

     

    Icahn likely isn't content to simply make $200 million if the thinks that there's an additional $500 million to be made.

     

    There's nothing wrong with what he's trying to do, unless it starts to interfere with the effective management of the company, which an unwelcome proxy fight MIGHT do. My estimation though is that with the current outlook for the company, Ichan will have a lot less support for such a fight than he might have 6 months ago.

     

    Otherwise he's doing what he thinks should be done. Apple is under no requirement to do what he says, or even to listen to him. FWIW, I think it would be stupid of Tim Cook NOT to listen - why would anybody turn down a chance to hear what an investor like Icahn has to say?
    24 Oct 2013, 12:58 PM Reply Like
  • King Rat
    , contributor
    Comments (922) | Send Message
     
    Listening is one thing. Complying to every demand of a spoiled child is another. Apple has more problems such as shrinking tablet, smart phone, and PC market share. Those need to be addressed first.

     

    Throughout the history of mankind it seems only in the past 10 years that any individual or organization with lots of cash and little-no debt is being fiscally irresponsible. What Icahn wants is to make Apple a high-debt, low cash company. That's what credit agencies and governments around the world consider responsible so why shouldn't investors?
    24 Oct 2013, 01:11 PM Reply Like
  • nguyenvanphuoc
    , contributor
    Comments (388) | Send Message
     
    What makes you think Apple is complying with every demand Icahn makes? It seems as though they increased the initial buyback based on his suggestion, and given where the stock price has been that seemed to be a very wise decision.

     

    Has Apple announce that they are going to do what he says? If so, I missed it. As I said, they'd be stupid not to listen. Doesn't mean they have to take any of his advice.
    24 Oct 2013, 01:15 PM Reply Like
  • American in Paris
    , contributor
    Comments (5504) | Send Message
     
    Hey,

     

    It is very simple. Icahn is a bully. Is that so hard to understand?

     

    He bullies companies into making short term changes that make him a lot of money and then he dumps his shares.

     

    He is not a long term investor. He is just a bully in an expensive suit.
    24 Oct 2013, 01:59 PM Reply Like
  • Toastypro
    , contributor
    Comments (444) | Send Message
     
    You are right, he is a bully in WallST.
    Here is a long history of what he did, specially one with TWA.
    http://bit.ly/1d3alkJ
    24 Oct 2013, 03:06 PM Reply Like
  • stvrob_63
    , contributor
    Comments (1113) | Send Message
     
    @King Rat
    "Throughout the history of mankind it seems only in the past 10 years that any individual or organization with lots of cash and little-no debt is being fiscally irresponsible."

     

    You might want to look at what Carl Icahn, T Boone Pickens, Ronald Perelman and others were up to in the late 70's, early 80's. Look into what happened to TWA for instance. History repeats itself.

     

    Carl Icahn might have the backing of a so called "Blind Pool" of investors, though I doubt it.
    24 Oct 2013, 07:58 PM Reply Like
  • Glenway Fripp
    , contributor
    Comments (1207) | Send Message
     
    Excuse me? Proxy War is an extremely hostile act toward management. It means that icahn will be forcing himself into board room meetings as a proxy for shareholders who want Apple to execute a $150 Billion dollar buyback. Not only are there a lot of shareholders who would love a pump and dump to $600 I have no doubt that part of the rise in stock price now are buyers jumping in on the prospect. A proxy war could lead to the the largest mass pump and dump in history and could leave Apple holding stock worth a whole lot less than what they bought them for. Apple is much better off creating a floor by buying shares on downturns which is obviously their current strategy which is, in my opinion, more sound and ,at any rate, shouldn't be any of iCahn's business and certainly is not a decision to be put in the hands of rabid investors. "Buy low never sell". that is how to do a buyback.
    25 Oct 2013, 08:01 AM Reply Like
  • Glenway Fripp
    , contributor
    Comments (1207) | Send Message
     
    I suspect that his upcoming websight will function as a way for iCahn to gather votes he will use to push his agendas. Very worth keeping a close eye on.
    http://bit.ly/1ii5ufV
    25 Oct 2013, 09:10 AM Reply Like
  • harrykutcher
    , contributor
    Comments (83) | Send Message
     
    it is to apple's best interest to buy stock,that said,until the 1st round is finished ,no need to increase .....i would like them to speed up at these levels but until next week ,i have no idea how many shares where bought this quarter.....if icahn has that information,he's got a problem!!!!!
    24 Oct 2013, 01:01 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4108) | Send Message
     
    Hahaha, what a joke. How much % of $AAPL does Icahn own? Like a couple billion? Woah, I think he won't be having many dinners with $AAPL CEO anymore.
    24 Oct 2013, 01:04 PM Reply Like
  • Uncle Pie
    , contributor
    Comments (3655) | Send Message
     
    he owns about one half of one percent of Apple's shares. Then he shows up and demands the money! Comical!
    24 Oct 2013, 01:46 PM Reply Like
  • BornIn87
    , contributor
    Comments (110) | Send Message
     
    I'd pit my shares against Icahn. There are many things apple can do with their profits that add value to the company, and thus, the company's stock. This dude's nothing more than a leech.
    24 Oct 2013, 01:28 PM Reply Like
  • Toastypro
    , contributor
    Comments (444) | Send Message
     
    Carl is only worth about $21B including $800mil he just got from Netflix, which means he has to liquidate everything to wage a war against Apple. He would need $25B to get to 5% share or side with Vangard, State Street or FMR. I doubt these institutional holders are friendly to Icahn. He can keep making noises and twitting as usual.
    24 Oct 2013, 01:30 PM Reply Like
  • SP5524
    , contributor
    Comments (86) | Send Message
     
    The only person Tim Cook should listen to is Michael Blair.
    24 Oct 2013, 01:32 PM Reply Like
  • Humble Eagles
    , contributor
    Comments (2243) | Send Message
     
    Isn't it funny that the shorts don't like this proposal! He is just a mean bully to them. Icahn is up 20+ million $$s right now on the day, btw. You have heard of giant killers: how about Carl the Apple short killer!
    24 Oct 2013, 02:12 PM Reply Like
  • Keyser Smith Jones Soze
    , contributor
    Comments (101) | Send Message
     
    In which case Apple should simply lay down and die, because there is no scenario where they are not doomed to failure, according to MB.
    24 Oct 2013, 04:32 PM Reply Like
  • wigit5
    , contributor
    Comments (4222) | Send Message
     
    MB has been much kinder to $AAPL lately read his comments on some of the recent articles praising apple... I think he even wrote one!
    He ultimately is still short though... I think he'll change that soon though as its on a run and I don't think he'll fight that sentiment.
    24 Oct 2013, 04:47 PM Reply Like
  • Humble Eagles
    , contributor
    Comments (2243) | Send Message
     
    You guys need to read Icahn's letter! He makes very good sense, and Tim Cook & Co. should listen to his counsel imo. The stock might still be at $440 if not for Icahn. The fact that Apple got that low shows the Board isn't minding all of the store. If Wall Street sells Apple shares for 50 cents on the dollar, the Board has to be smart and aggressive to take those shares from Mr. Market at that price. Apple is ridiculously undervalued right now. I don't think they should borrow $150Bn, but increasing the buyback aggressively is very smart. Smart companies have better returns. Apple needs to be smart financially, in addition to being smart about the business.
    24 Oct 2013, 01:33 PM Reply Like
  • Keyser Smith Jones Soze
    , contributor
    Comments (101) | Send Message
     
    Exactly my sentiments. As a shareholder, who would you rather have on the board, Al Gore or Carl Icahn? If the Board of Directors was truly concerned about shareholders, they would not have allowed the stock price to drop nearly as low as it did. They would have used a good portion of that rotting cash to halt the irrational sell-off way, way before it got as low as it got. The board of directors did not behave responsibly. They completely ignored the responsibility they have to shareholders. In fact, it was gross negligence. I would go so far as to say that their failure to intervene when the share price dropped below $450 is grounds for civil action by shareholders. Time and again we see cases where Boards of Directors categorically ignore the needs of shareholders and pursue their own selfish interests. Carl Icahn is on the right side of this battle, and I sincerely hope that before he dies he is able to bring about some change in how shareholders in general are treated by Boards of Directors in general.
    24 Oct 2013, 04:33 PM Reply Like
  • Humble Eagles
    , contributor
    Comments (2243) | Send Message
     
    Agree, Keyser, and it is all about balance. Icahn brings a nice spotlight to the BOD and I suspect they are keenly aware of his presence, and the fact that he probably now owns more than all of them put together! Look at the SEC Form 4s, and it is obvious that the Apple executive team and BOD have been dumping their own shares (as they have for the last ten years, inexplicably) and Icahn has been buying them. The problem is that one day you can wake up and realize you gave away your company!
    24 Oct 2013, 05:11 PM Reply Like
  • Willow135
    , contributor
    Comments (13) | Send Message
     
    I don't get all the anger focused on Icahn.
    I'm a shareholder and would not sell at $525 or $550 or anything less than $650 per share.
    If AAPL increases the amount it allocated to share buyback it only enhances the value of my shares and I may raise my own sell price accordingly.
    24 Oct 2013, 01:38 PM Reply Like
  • rkysvn
    , contributor
    Comments (5) | Send Message
     
    Icon can help to stockholders and pressure on managment, fill sorry for short sellers.
    24 Oct 2013, 01:38 PM Reply Like
  • JBugalla
    , contributor
    Comments (3) | Send Message
     
    The folks over at APPL fertilize their world in an effort to produce more sales and grow the company via media events such as just took place on Oct. 22. Carl Ichan fertilizes his world in an effort to grow the stock prices higher in his portfolio also via the media. Both efforts generate interest in AAPL to buy products and increase the share price - both are a good thing. The larger issue is the public discussion about corporate governance that has been generated by the Tim and Carl show.
    24 Oct 2013, 01:40 PM Reply Like
  • Ashraf Eassa
    , contributor
    Comments (9286) | Send Message
     
    What a bully.
    24 Oct 2013, 02:08 PM Reply Like
  • Keyser Smith Jones Soze
    , contributor
    Comments (101) | Send Message
     
    A bully, perhaps, but also an extremely smart man whose interests are more closely in line with shareholders in general than are the interests of the board members, who generally are not the least bit concerned about the wants and needs of shareholders.
    24 Oct 2013, 04:33 PM Reply Like
  • Sammy Lee
    , contributor
    Comments (314) | Send Message
     
    Not sure if Icahn understands the volatile nature of tech industry if he's asking for $150B buyback that erases all the cash on their balance sheet. There is a reason why tech companies traditionally like to have redundant cash piles. Things could go dramatically wrong for AAPL in three years time and the buyback would have done nothing but drive up the price per share.
    24 Oct 2013, 03:09 PM Reply Like
  • Ashraf Eassa
    , contributor
    Comments (9286) | Send Message
     
    OMG, YES. Exactly. This. Yes.
    24 Oct 2013, 04:02 PM Reply Like
  • Keyser Smith Jones Soze
    , contributor
    Comments (101) | Send Message
     
    If they were to spend 150B over the next two years, they still would most likely have 100B in cash, which is still about ten times as much as would make much sense for a company to have. The cash is rotting. No better place to put money to work presently than buying share of Apple, and this isn't any different for Apple than it is for anyone else.
    24 Oct 2013, 04:33 PM Reply Like
  • jammerculture
    , contributor
    Comments (402) | Send Message
     
    Vultures. That's all these "activist" investors are. What value do they bring to the world? What do they produce? What innovations do they make?
    24 Oct 2013, 03:52 PM Reply Like
  • Jack Baker
    , contributor
    Comments (971) | Send Message
     
    As an Apple shareholder I am very happy Icahn is now invested and involved in Apple. I agree with him that the board of directors have been derelict in their responsibilities to shareholders. Icahn has a great track record of extracting shareholder value and making inept boards do the right thing. Apple has 147 billion in the bank. They have positive FCF of 50 billion a year. They could pay off the 150 billion with a little more than 3 years of FCF. That is NOTHING!!! Not to mention the fact that market conditions are ripe TODAY for a low carry cost. Interest rate are very low and the stock price is way undervalued. If they don't do what Icahn wants now, they will eventually do it later. They will do it incrementally over a period of years at higher interest rates and a higher stock price. This procrastination will cost shareholders A LOT OF MONEY. The reality is that they can never use all of the positive FCF or anywhere near it on R & D and they don't seem to want to make large acquisitions. They need to do it now. Carl is right. It would put the stock at 706 immediately. Why would any shareholder have a problem with that, LOL? Wait till it gets there and then decide if you want to sell because you don't like the balance sheet. Which, by the way, would still be better than most companies in the S & P.
    24 Oct 2013, 08:17 PM Reply Like
  • scott trader
    , contributor
    Comments (5719) | Send Message
     
    Icahn seems very impatient. Might just be his age talking....I think he wants Wall Street to immortalize him with a bronze statue...

     

    .I believe apple is not utilizing their cash as a expanding tech growth co should.......but maybe the right deal just hasn't come along...

     

    I wouldn't buy back any more shares than they have already committed to but I would increase the divi a full point..
    24 Oct 2013, 09:43 PM Reply Like
  • Nick Cox
    , contributor
    Comments (945) | Send Message
     
    Icahn is delusional.It's time he moved into the retirement home,put his feet up,and dreamed of whatever.Bill Gross had it right about him.
    24 Oct 2013, 10:40 PM Reply Like
  • chemguy2
    , contributor
    Comments (27) | Send Message
     
    Saying AAPL hasn't expanded its business because "...maybe the right deal just hasn't come along..." is like someone saying they're still single because the right person hasn't come along. In marriage and corporate marriage, you have to make things happen, not just wait for something to drop into your lap. AAPL hasn't made any big deal because they don't want to or are afraid to. People have been suggesting many opportunities for the last few years. Nothing has materialized, just like those exciting new products Cook is always promising. AAPL has become paralyzed by their big stash of cash, and Icahn is trying to get them to use it in a profitable (for shareholders) way.
    25 Oct 2013, 12:13 AM Reply Like
  • rrosey2
    , contributor
    Comments (793) | Send Message
     
    Right:

     

    In investing there are no bullies or cowards.

     

    Only winners and losers.

     

    Who has the track record ?
    25 Oct 2013, 12:24 AM Reply Like
  • smart_investoor
    , contributor
    Comments (232) | Send Message
     
    shareholders are in it to make money and if Carl wants to maximize your returns, don't turn your back. that man is genius, retiring many shares as possible would lower yearly increasing dividend payment, increase eps, reduce volatility, and make it even more enticing for long term holders. so what's the problem? if long term apple shareholders have faith in apple, then their ability to finance more debt and still innovate and increase spending on R & D s are all can be managed.
    25 Oct 2013, 12:36 AM Reply Like
  • scott trader
    , contributor
    Comments (5719) | Send Message
     
    Low borrowing interest rates may not hang out down here forever....nice to be able to not be defendant on securing financing..
    25 Oct 2013, 01:05 PM Reply Like
  • harrykutcher
    , contributor
    Comments (83) | Send Message
     
    what you have here is classic...a company with excess cash and no real plan to spend it and a smart financier who has a plan.....somewhere there is actionable decisions that can do both....this started because apple's stock was getting killed,too much cash with no plan,we all wrote that raising a dividend was important,there is no debts to retire so,let's reduce shares and reduce the capital account.....a no brainer with interest rates at an all time low.....tim cook,to his credit has put himself in shareholder's shoes by tying his compensation to stock .I agree that apple's biggest problem is over capitalization,and also agree that carl is correct in terms of size,based entirely on apple's free cash flow...note to apple's board ...invite icahn to join board...speed up buy backs by say,2 quarters,and then start another buyback
    27 Oct 2013, 09:12 AM Reply Like
  • S Blaugrund
    , contributor
    Comments (3) | Send Message
     
    I think if Steve Jobs was still around he would tell Icahn to kiss-off and find another company to jerk with. Steve liked all the cash he could get his hands on because of the many things that can and often do even with the best of tech companies. He probably would also not have approved the dividend or the share buy-back plans for tha same reasons.
    28 Oct 2013, 01:10 AM Reply Like
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