Apple goes green on report of larger iPhones, Icahn buying


Shares of Apple (AAPL +0.5%) have gone green on the day on the back of a report that the iPhone maker will launch 2 new models with larger screens in 2H 2014. But, Carl Icahn is also lending a helping hand - the activist announced he bought another $500M in Apple stock today (roughly one-tenth of today's shares traded), bringing his total to $3.6B.

As to his rebuffed calls for a buyback, "If board doesn't see AAPL's 'no brainer value we sure do," he chides on Twitter.

Update: Icahn pens a 7-page letter on "why [Apple's] buyback should be markedly increased.”

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Comments (42)
  • hko2012
    , contributor
    Comments (752) | Send Message
     
    Apple should stop imitating Samsung and using Samsung parts.
    23 Jan 2014, 03:25 PM Reply Like
  • owens7301
    , contributor
    Comments (142) | Send Message
     
    You must be confused. I believe it is Samsung that hires people to work in Apple subs factories to get what they need on the technology inside their products then pops out a lower standard product to get the first sale. Like the I-watch......but , you will not agree so this is waste of time.
    23 Jan 2014, 04:35 PM Reply Like
  • chopchop0
    , contributor
    Comments (5215) | Send Message
     
    If that's the case, why has AAPL continuously returned to samsung to pretty much fab everything? Processors, screens, etc. They've tried Sharp and others and it just never cuts it for them.
    23 Jan 2014, 08:23 PM Reply Like
  • Azazello
    , contributor
    Comments (1779) | Send Message
     
    @hko2912
    you may be out if business:
    http://reut.rs/LO3ZMY
    23 Jan 2014, 09:37 PM Reply Like
  • platonicbomb
    , contributor
    Comments (1621) | Send Message
     
    Looks like it's going to be just another SA comment section on AAPL. Shriners and whiners, welcome all!
    24 Jan 2014, 02:10 AM Reply Like
  • Humble Eagles
    , contributor
    Comments (2751) | Send Message
     
    Hilarious!! Icahn talks Apple up again. If you are long Apple you have to love Icahn. 3.6Bn is putting your money where your mouth is!! Meanwhile, many of the executive team and Apple's BOD can't dump their Apple shares fast enough--just look through the SEC form 4s for the last few years!!
    23 Jan 2014, 03:26 PM Reply Like
  • 8747S1115R
    , contributor
    Comments (275) | Send Message
     
    Cant dump their shares fast enough? You must be misinformed on why people sell stocks. In apples case it is certainly not because it is overvalued. There is only one reason to buy I think you know that answer.
    23 Jan 2014, 03:31 PM Reply Like
  • Humble Eagles
    , contributor
    Comments (2751) | Send Message
     
    Steven, my point is that people vote with their feet/pocketbook! Icahn has invested billions in Apple and many of the BOD and exec team have sold billions (in aggregate). What does that tell you about who believes Apple is undervalued? Just making a point. And yes, executives often sell their stock as a payday. They have the right to do anything they want to do with their stock, and I would certainly recommend diversification. However, when you go back and see that some of them have gotten millions (not kidding) of options, and they have been selling them all since the 20s, you have to ask who is right about Apple finances: owners like Icahn, or people who have kept little to none of Apple for the last ten years. You also have to ask if it wouldn't have been smarter to give them less options and more money, but that is a matter for the BOD.
    23 Jan 2014, 03:41 PM Reply Like
  • ks_droid
    , contributor
    Comments (152) | Send Message
     
    It's actually funny as all iPhone users are "laughing" at my Galaxy Note screen, so maybe they will not be laughing any more :)
    23 Jan 2014, 03:28 PM Reply Like
  • chopchop0
    , contributor
    Comments (5215) | Send Message
     
    just like they laughed at a 7" android tablet until the IPad mini came out lol
    23 Jan 2014, 08:24 PM Reply Like
  • Azazello
    , contributor
    Comments (1779) | Send Message
     
    @ks_droid
    sorry girl but your funds are CUT:
    http://reut.rs/LO3ZMY
    23 Jan 2014, 09:38 PM Reply Like
  • gensearch2
    , contributor
    Comments (1556) | Send Message
     
    It was down this am on the same news.
    23 Jan 2014, 03:30 PM Reply Like
  • scott trader
    , contributor
    Comments (7021) | Send Message
     
    Curious humble why you despise apple to such a compulsive degree....actually after reading a few of your comments on google and apple I get confused where you stand or does it flip flop
    23 Jan 2014, 03:31 PM Reply Like
  • Humble Eagles
    , contributor
    Comments (2751) | Send Message
     
    I like Apple!! Have a lot of the products, Scott and I'm a long term bull. I just think Icahn is right and the BOD was wrong in squirreling away so much cash in treasuries for the last few years. Also, I am sure they have done well in other areas. Do you not believe in constructive criticism?
    23 Jan 2014, 03:35 PM Reply Like
  • scott trader
    , contributor
    Comments (7021) | Send Message
     
    @humble. Sorry...I just couldn't get a good read on your where your comment basis was coming from...I prefer deductive criticism over blind sided optimism any day..........I have been critical for apple not acquiring more innovative start ups...I also think they should have made a play for nflx. Pre Icahn... Hopefully they pull a rabbit out of their hat in 2014 ....
    23 Jan 2014, 04:07 PM Reply Like
  • Humble Eagles
    , contributor
    Comments (2751) | Send Message
     
    Scott, a couple of more points: I really don't get the whole Apple cult thing--if somebody criticizes Apple's mistakes, then they hate Apple? Would you be that way about IBM, or Intel, or McDonalds? Companies, like individuals, make mistakes. Talking about those mistakes on an investing site like SA is quite productive imo. It helps us all make better decisions. On the cash, just think about how much higher Apple would be if they had been buying the stock back for the last five years. Instead, they have been buying US Treasuries, many yielding less than the dividend! If they had simply reduced the shares, they would have more money from the decreased payout, or more money to hike the dividend. I think Apple gets an A+ on product design and production. The BOD hasn't done as well on finance. That was Icahn's point and I think he is right! I think they will do better if they listen and increase the buyback. Finally, check back through my comments and you will consistently find that I am a big Apple bull. Nobody designs consumer electronics better. You probably weren't saying that, and sometimes good natured sarcasm and humor are hard to read online. Good luck, and hopefully Apple will blow it out Monday!
    23 Jan 2014, 04:10 PM Reply Like
  • scott trader
    , contributor
    Comments (7021) | Send Message
     
    @humble I agree Apple design and quality is first class...I like Icahn stepping up based on fundamental value and putting his money where his mouth is....I have been pathologically long since 2007 so my cost basis is pretty low..

     

    .that being said If I had entered into a large position in the last year there would not have been much for gains and watching high flyers like amazon and google steal all the thunder would have been even more frustrating..... I sold a few apple shares this morning, not that I don't believe earnings will be decent but because Wall Street never gives apple much due respect."plus I bought up some other beat up stocks...twitter and lulu...anyway good luck to all longs tonight...
    27 Jan 2014, 01:14 PM Reply Like
  • Humble Eagles
    , contributor
    Comments (2751) | Send Message
     
    Except when you sell...then it goes nuts! I originally thought it would be a blowout, so I think somewhere between a modest beat and a blowout, but you are right about Mr. Market--he loves to take Apple to weird places and you never know. I wouldn't be surprised if we see the 600s or the 400s after hours today!! Long term, I am excited about a bigger phone and new product categories, so if we get a huge, but unwarranted sell off I might add, and if we get a blow out I might add, too. We'll see what they say. The problem is that there are so many potential catalysts right now! CHL, the ER, a lot of questions about the buy back and new products--I am scared to be in or out. Scott, actually I think the Icahn noise is designed to put pressure on the Board to pay attention to shareholders, and I think it will end up working perfectly. Icahn doesn't want to run Apple, but I think he wants the Board to be aggressive. No doubt it will get asked and shelved, but I think it is all good for Apple. Good luck and thx for the commentary!
    27 Jan 2014, 03:03 PM Reply Like
  • scott trader
    , contributor
    Comments (7021) | Send Message
     
    When you sell it goes nuts.....funny that is why I have been on the fence for the last few years ...so many times I wanted to push the sell button...that's why I sold a paltry amount hoping my superstition pays off......owning apple has been a great experience but often feel like I am a tightrope walker.... But then the circus is exciting...
    27 Jan 2014, 03:10 PM Reply Like
  • Humble Eagles
    , contributor
    Comments (2751) | Send Message
     
    Looks like taking some profits was a great idea, Scott! If we get a big reaction into the 400s you can recycle, but watch the wash rules. Good luck!
    27 Jan 2014, 05:06 PM Reply Like
  • scott trader
    , contributor
    Comments (7021) | Send Message
     
    Hi Humble ...should've sold more lol...anyway will probably do as you said rebuy the shares for a little discount.....still think 2014 is the comeback year....c'mon Tim kick that new stuff out the door...let's see what Jony has been burning the candle on..
    27 Jan 2014, 06:17 PM Reply Like
  • sfinvestor
    , contributor
    Comments (1997) | Send Message
     
    Carl Icahn bought an addtitonal $1B just ahead of earnings on Jan 27th. No brainer, I am long with him on this one. $1B can't be wrong.

     

    btw, the 7 page letter is a fantastic read. I support Carl Ichan's proposal based on merit and reason.
    23 Jan 2014, 03:31 PM Reply Like
  • scott trader
    , contributor
    Comments (7021) | Send Message
     
    Will Icahn buy more now after the stock dropped after earnings that is the question...will aapl buy back share knowing what we don't know..???
    27 Jan 2014, 05:00 PM Reply Like
  • idkmybffjill
    , contributor
    Comments (1911) | Send Message
     
    Must be nice to be able to accumulate $500M of a stock in a single day lol.
    23 Jan 2014, 03:37 PM Reply Like
  • scott trader
    , contributor
    Comments (7021) | Send Message
     
    Looks like I can stepped up to the plate again....still didn't move the needle...pretty amazing stuck in the mud price action
    28 Jan 2014, 01:04 PM Reply Like
  • hko2012
    , contributor
    Comments (752) | Send Message
     
    As soon as Apple comes out with large screen phablets only, I will switch back to Samsung because why would I want to have an imitated phone?
    23 Jan 2014, 03:44 PM Reply Like
  • risleuf
    , contributor
    Comments (5) | Send Message
     
    Every touch screen smartphone running a mobile OS is an Apple-imitation. Because samsung stretches the screen a couple inches they all of a sudden own all of Apple's innovations and accomplishments?
    23 Jan 2014, 04:47 PM Reply Like
  • chopchop0
    , contributor
    Comments (5215) | Send Message
     
    so every IPad is simply a microsoft tablet imitation?
    23 Jan 2014, 08:25 PM Reply Like
  • kato4321
    , contributor
    Comments (87) | Send Message
     
    Humble,
    When I exercised stock options I had to sell stock to pay the income taxes generated because of the option. Maybe the same applies to Apple.
    23 Jan 2014, 03:56 PM Reply Like
  • Humble Eagles
    , contributor
    Comments (2751) | Send Message
     
    kato, yes selling is required sometimes, particularly in CA! However, if someone has been given say, 750,000 options since 2002 and they sold them all? And they have consistently sold 100% of their options since Apple was in the $20s? As I said, it is their money, but do you want someone like that making the buyback decisions for you? I am just saying they ought to listen to the good in Icahn's criticism, not that they should have kept all of their Apple stock. Balance is good.
    23 Jan 2014, 04:20 PM Reply Like
  • kato4321
    , contributor
    Comments (87) | Send Message
     
    Hko,

     

    Agreed, and I believe Apple should eliminate all things Android and Google from devices.
    23 Jan 2014, 03:59 PM Reply Like
  • kato4321
    , contributor
    Comments (87) | Send Message
     
    Humble,

     

    Many of my coworkers sold all their incentives as they were received, taking the money out of the stock market and putting it into realestate, municipal bonds, etc. Not sure I understand it but they said they have/had invested their life into the company (most worked at least 70 hrs/week), they were not going to invest all their money into it as well.

     

    I agree with Ichan that Apple has far too much cash, but would rather a special dividend plus a ten percent annual dividend increase rather than a larger buy back. Give me the cash now, not a hope the share price will rise if number of shares is reduced.

     

    I once thought Apple was going to vertically integrate and start building their own components, especially chips, to keep everuthing even more private. $150 billion would do it.
    23 Jan 2014, 04:36 PM Reply Like
  • Humble Eagles
    , contributor
    Comments (2751) | Send Message
     
    Kato, I think it is good to diversify away from your company if you have everything invested in it, but I would say to the Apple team--keep a minimum of 10% of the converted options if there is any way possible. In my example, (which is very realistic based on form 4s) an exec would have 75,000 of his 750K. He would be making almost a million a year in dividends right now by simply keeping 10% of his options, not to speak of the ~$40 million value of the stock! I am a huge proponent of buybacks because they keep on giving to owners. If they consistently increase the dividend by the reduced payout amount, it really compounds through the years. It benefits long term Apple holders, but I agree with you that one time payouts insure the current shareholders get the money. Money does have a way of sprouting wings. I originally thought they wanted to buy Intel with the money, but I just don't think the gov would allow it. Great synergy, though.
    23 Jan 2014, 04:52 PM Reply Like
  • Rappenco
    , contributor
    Comments (697) | Send Message
     
    If past earning release are any predictor then Monday the 27th after the market closes expect to see wild gyrations in Apple stock.
    Last time I was in and out of the stock 3 times in about 15 minutes. It was an unbelievable thing to experience. The stock was swinging wildly in both directions.
    I suggest if you own the stock you put an aftermarket sell order in in the 570 range and then try to get it back in the 545-550 rang and then continue on with your shares as if nothing happened.
    The risk is it hits 570 and then doesn't stop. I have 100 shares and will give it a go.
    23 Jan 2014, 04:38 PM Reply Like
  • kgfd1980
    , contributor
    Comments (293) | Send Message
     
    Icahn is buying because you take out the $160. per share in cash (or reduce the float) it's at an 8 multiple............wh... the S & P???
    23 Jan 2014, 04:41 PM Reply Like
  • Savajo15
    , contributor
    Comments (36) | Send Message
     
    @Humble - With ESOP's (option plans), the thing many do not understand is that they typically have 10 year expirations tied to them. Exercise or lose them. Additionally, these same executives are getting more of them each year therefore creating a situation where they are obnoxiously over concentrated and have to exercise/pay the taxes or lose the shares. It is very prudent on their behalf to move exposure away from their company...they still are largely putting their wallets where their mouths are.
    23 Jan 2014, 04:42 PM Reply Like
  • Humble Eagles
    , contributor
    Comments (2751) | Send Message
     
    Sav, just look back at the actual form 4s and ask yourself if selling 100% was a smart financial move. Selling 250,000 options at less than a $100 for instance; some were sold in the $20s that I looked at. I am certainly not saying they shouldn't exercise them!! They should, and they should use them as pay, and they should diversify. However, if somebody was selling all 250,000 Apple options at $28 a share about ten years ago do you think that was a good idea? I would advise them to keep 10% at a minimum. In this case, the exec would have missed a couple of hundred thousand dollars, but he would have made more than a couple of hundred thousand in dividends (more every single year now), and the 25,000 shares would be worth almost $14 million today!! I find it very strange that people argue that selling 100% of their options is a good idea!
    23 Jan 2014, 05:17 PM Reply Like
  • sfinvestor
    , contributor
    Comments (1997) | Send Message
     
    Humble Eagle,

     

    You never really sell 100% of your options as an employee. As these things come with a 4 year handcuff and they roll out and come in annually, even if you sell 100% (fully vested), chances are you have a hell of lot more unvested and in still have a pipeline of options in 0-4 years.
    23 Jan 2014, 05:46 PM Reply Like
  • MIKE LARRI
    , contributor
    Comments (15) | Send Message
     
    I bought NFLX on Monday for around 330 and today I sold it for around 388,so if good stocks are at a reasonable price, and after the earnings reports are above analysts expectations,one would gain around 17% in a few days!
    23 Jan 2014, 05:31 PM Reply Like
  • kato4321
    , contributor
    Comments (87) | Send Message
     
    Apple fans,

     

    How do you think a iPad or iPad mini would be received if it could make cell phone calls like an iPhone? I already pay cell fees on my iPad. Work with ear buds or blue tooth in my car.
    23 Jan 2014, 07:52 PM Reply Like
  • mogwan
    , contributor
    Comments (90) | Send Message
     
    @Kato4321- regarding making phone calls on iPad- see Apple Store- many apps already exist for this: http://bit.ly/1d0erHe
    23 Jan 2014, 10:36 PM Reply Like
  • kato4321
    , contributor
    Comments (87) | Send Message
     
    @mogwan---thanks, I was unaware of the apps. Downloaded the app you highlighted and will try it this afternoon.
    24 Jan 2014, 10:28 AM Reply Like
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