“It’s hard to see how the current rate of purchases can support [Apple Inc. (AAPL)] stock for another 9 months, much less 2 years,” Kyle Spencer writes for Seeking Alpha. “That’s where Carl Icahn comes in.
“In a nutshell, Icahn’s pitch is that Apple will actually save money by borrowing at historically low interest rates to increase both the size and rate of its buyback program, as the company will no longer have to shell out dividends for those shares,” Spencer writes. “Icahn is also counting on the fact that a bull run in the stock will squeeze short sellers by forcing them to cover their positions. Finally, a price run up may very well reverse the bearish narrative and hand the consensus back to the bulls. If you believe in free lunches, it’s a win-win all around.”
Spencer writes, “On the other hand, the success of the Icahn Proposal will ultimately depend on Apple having new, exciting products in the pipeline.”
Much more in the full article here.
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