Icahn drops Apple buyback proposal


In an open letter to shareholders, Carl Icahn says there's "no reason to persist" with his non-binding proposal calling on Apple (AAPL) to buy back $50B worth of shares in FY14, in light of recent events. The activist investor nonetheless says he's "extremely excited about Apple’s future."

Shareholder advisory firms ISS and Egan-Jones have both come out against Icahn's proposal, and Apple announced last week it has bought back $14B worth of shares since its FQ1 report.

AAPL -0.4% premarket.

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Comments (25)
  • ellio lumbroso
    , contributor
    Comments (30) | Send Message
     
    This Icahn is a shrewed manipulator .
    10 Feb 2014, 09:32 AM Reply Like
  • Humble Eagles
    , contributor
    Comments (2734) | Send Message
     
    Yes very shrewd. It is also interesting that Apple dropped into the low $400s last year, and this year they are climbing through $520--on pretty much the exact same 1Q numbers and 2Q guidance.
    10 Feb 2014, 09:36 AM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (13204) | Send Message
     
    When the stock drops unlike investors that get skittish Icahn throws a fit. He calls for disbursements, buybacks, etc. and calls the management stupid if they don't follow his stupid short term beliefs that are only ways for him to extricate himself from losses. He is the worst sort of investor and an increasingly bad one at that.
    10 Feb 2014, 11:44 AM Reply Like
  • jjkiam
    , contributor
    Comments (403) | Send Message
     
    After a 14 b buyback in the last couple of weeks, Apple has shown it is very willing to defend the stock and protect shareholder value. I expect my Icahn will be further pleased by an extension of the buyback in the next few months
    10 Feb 2014, 09:36 AM Reply Like
  • SivBum
    , contributor
    Comments (2695) | Send Message
     
    Yep, He took profit from NFLX and piled the gains into Apple. Shrewed indeed.
    10 Feb 2014, 09:37 AM Reply Like
  • Rappenco
    , contributor
    Comments (695) | Send Message
     
    Now he needs to start concentrating on RIG!!
    10 Feb 2014, 09:52 AM Reply Like
  • Malph
    , contributor
    Comments (41) | Send Message
     
    Icahn should have stayed in the circus where he belongs.
    10 Feb 2014, 10:00 AM Reply Like
  • Quoth the Raven
    , contributor
    Comments (2063) | Send Message
     
    Next up: Icahn sells his stake in Herbalife.
    10 Feb 2014, 10:02 AM Reply Like
  • Ninja Trader
    , contributor
    Comments (1726) | Send Message
     
    The market is telling you it's happy with Carl's decision. Now we can move on to some awesome new product(s) for 2014. February 28th could bring a dividend increase and hopefully a stock split so more people can buy in.

     

    Long AAPL and loving it!
    10 Feb 2014, 10:14 AM Reply Like
  • omnimoeish
    , contributor
    Comments (492) | Send Message
     
    Buy backs are about the dumbest way for a company to invest its money. It doesn't increase the stock value. The value is what it is based on the market's valuation and P/E ratio ratio. The fact that apple just spent $14 billion on useless stock when they could've bought Netflix and several other up and coming digital powerhouses is pretty stupid. If anything it takes away from apples assets making it worth less. Evidenced by the fact apple lost 8%. The buy back didn't increase the value, just provoked people to sell because they know it's not worth much more than $500/share no matter how you slice and dice it.
    10 Feb 2014, 11:16 AM Reply Like
  • The Count of Cristo
    , contributor
    Comments (293) | Send Message
     
    again, you don't understand what buyback does. lowers the volatility, reduces dividend payments. apple sees more value in itself than netflix and other garbage companies. it isn't that hard for apple to get into video rental and streaming. it's just brings in no profit. it would be waste of money to spend on buying expensive companies. look what happened to google. buying motorola for 12.5 B, now selling at a loss.
    10 Feb 2014, 11:29 AM Reply Like
  • pocohonta
    , contributor
    Comments (661) | Send Message
     
    Omni, when a company buys backs its shares, it reduces the float (shares available for trading) and has two effects: 1) it inflates the EPS by reducing the denominator. 2) it decreases the supplies of shares available to trade and thus prop the stock price up.
    Because of the buy-back, EPS for last quarter was 14.5 (but would've been 14.09 without) The float is now 890.8M shares (but it used to be 950+M)

     

    Had they made acquisitions instead and overpaid like most companies, especially ones that has very little synergy with its current operation (Netflix being one), it actually decrease the stock value because market will still evaluate Apple's current (low) PE even after it acquired a high-PE stock like Netflix.
    10 Feb 2014, 11:44 AM Reply Like
  • stabros
    , contributor
    Comments (79) | Send Message
     
    i disagree smart investor with the no profit in buying companies...doesn't hurt to have bought a company like hulu and plugged the apple logo with links to iTunes, ipads, and other apple products all over the site, along with Apple offers (ie: sign up for Hulu save $50 on an ipad to watch your favorite shows). Unfortunately they let Disney take it and i think failure to make those kind of risks could end up shooting themselves in the foot. Gotta take chances and make mistakes, only need to be right 51% of the time.
    10 Feb 2014, 09:58 PM Reply Like
  • civ-e
    , contributor
    Comments (666) | Send Message
     
    "in light of recent events" -- what recent events does this refer to?
    10 Feb 2014, 11:31 AM Reply Like
  • Brad Johnson
    , contributor
    Comments (91) | Send Message
     
    Icahn got most of what he wanted, I'm glad he pushed Apple.

     

    As an investor, I don't understand why other people get angry at something like Apple investing in itself with a stock buyback. That cash pile belongs to Apple owners (ie stockholders) not some giant piggybank for Tim Cook.

     

    I'm convinced there's people that want Apple to have a $200 billion cash hoard just for bragging purposes. I'd rather watch my share price increase.
    10 Feb 2014, 11:46 AM Reply Like
  • stabros
    , contributor
    Comments (79) | Send Message
     
    depends on how long you plan on holding, if its long term you should probably want them to take more risks with that money, buybacks always seem short lived without good results to back it up (not saying apple doesn't have good results but investors do expect a lot from apple)
    10 Feb 2014, 10:02 PM Reply Like
  • James McRitchie
    , contributor
    Comments (105) | Send Message
     
    Yes, it is fine to have Ichan pushing but buybacks aren't the answer. They are like fishing with dynamite... works great for a short time. Investing in Treasuries at 1% is not responsible either. Apple needs a program like Google Ventures, investing in startups with promise, especially those that integrate well in the Apple universe.
    10 Feb 2014, 12:11 PM Reply Like
  • Brad Johnson
    , contributor
    Comments (91) | Send Message
     
    They can obviously do both.

     

    Of course Apple should use their cash hoard primarily for innovation, but reckless buying of absurdly overpriced startups sounds a lot more like fishing with dynamite that investing their cash hoard into themselves when the price is incredibly undervalued.
    10 Feb 2014, 02:17 PM Reply Like
  • Bankpas
    , contributor
    Comments (21) | Send Message
     
    Maybe Apple can throw Ican a bone whilst buying Nuance!!!!!
    10 Feb 2014, 01:06 PM Reply Like
  • redplanet
    , contributor
    Comments (93) | Send Message
     
    Apple is so much more than Carl and buybacks. Connect the dots and the future is huge and they are making the future, right now:

     

    http://bit.ly/MG3ght
    10 Feb 2014, 03:46 PM Reply Like
  • stabros
    , contributor
    Comments (79) | Send Message
     
    Icahn is annoying, I learned with Yahoo a long time ago don't get involved with his stocks
    10 Feb 2014, 04:07 PM Reply Like
  • marktuthdr2
    , contributor
    Comments (142) | Send Message
     
    appl seems like a low risk investment, whether Icahn is in it or not. I sold half heading into earnings, it went down as expected, then I bought more shares back at the lower price. I bought in the 400's a good while ago, so this has been a very good investment for me. It seems to still be innovative, has tons of cash, a nice little div, a low p/e, so much upside and little downside it seems.
    10 Feb 2014, 04:59 PM Reply Like
  • stabros
    , contributor
    Comments (79) | Send Message
     
    I always liked apple but DO SOMETHING WITH THE CASH ALREADY! haha, and i think buyback is a terrible idea for a company like Apple, they should still be looking at growth instead of trying to act like a blue chip

     

    They need to take a page from the book of Google and tap into new industries. I guess its not a bad idea to buy a few shares and wait patiently but I will wait until Icahn is completely out of the picture to take a look
    10 Feb 2014, 09:54 PM Reply Like
  • DanoX
    , contributor
    Comments (3461) | Send Message
     
    Like Motorola?
    11 Feb 2014, 03:27 AM Reply Like
  • stabros
    , contributor
    Comments (79) | Send Message
     
    Dano you only need to be right 51% of the time, for every bad bet google made they had plenty of bets that paid off, that is just a bad analogy that foolish apple investors are using to support a buyback
    11 Feb 2014, 08:59 AM Reply Like
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