Carl Icahn warns stock market could face ‘big drop,’ says does not want fight with Apple management

“Activist investor Carl Icahn on Monday said there was a chance the stock market could suffer a big decline, saying valuations are rich and earnings at many companies are fueled more by low borrowing costs than management’s efforts to boost results,” Svea Herbst-Bayliss and Jennifer Ablan report for Reuters. “Unnerved by Icahn’s prognosis, investors pushed stocks lower. The S&P 500, which was trading near unchanged before Icahn spoke, closed down 0.4 percent. ‘I am very cautious on equities today. This market could easily have a big drop,’ Icahn said.”

“He said share buybacks are driving results, not profitability,” Herbst-Bayliss and Ablan report. “He also hinted at his ongoing plan for Apple Inc, the most valuable U.S. company by market value, saying he does not want to fight with management at the iPhone giant but has no plans to walk away from his investment. Shares of Apple closed down 1.2 percent at $518.92; they were trading at $523.11 before Icahn’s remarks. Icahn said he still thinks Apple’s stock price is undervalued and said the company’s CEO, Tim Cook, feels the same way.”

Herbst-Bayliss and Ablan report, “Icahn, who runs Icahn Enterprises, a diversified holding company, is urging Apple to buy back $150 billion worth of shares. The company has not committed to that. Icahn owns approximately 0.4 percent of Apple’s outstanding shares, according to Thomson Reuters data. Icahn said that he and Cook are friendly, but he still spoke critically. ‘Apple is not a bank and it should not be run like a bank because investors did not invest in a bank,” he said. “Apple has all this money, they should be using it.’ …Icahn said he had looked at investing in Microsoft but did not, declining to give a reason.”

MacDailyNews Take: Because he likes making money, not blowing it on failure?

Read more in the full article here.


    1. Maybe when the government stops giving away ZERO percent money. When the interest rates go back to even 5% the interest on $150 billion is $7.5 billion. Or maybe when Apple uses the money to take over another market.

    1. He doesn’t have any influence. Icahn Enterprises has a total value of $17B, NYSE total capitalization of all listed companies is $14T and NASDAQ is $4T, so his wealth represents about 0.1% of the market. He could dump everything and it wouldn’t cause a ripple. The idiot sheep that listen to him do.

      People should listen to Warren Buffett, Berkshire Hathaway is 16 times more valuable than Icahn Enterprises and he’s a hell of a lot more pleasant. Or John Bogle, Vanguard manages 60 times more money than Icahn, plus Bogle has a fan club.

  1. Sounds like he is trying to manipulate the price lower with his “warnings”. Would be fitting if Apple could buy back *his* stock after any stock price drop (and before it rises back to normal).

  2. Big descrency from what’s being reported by Slimsung! Guess it will be on sale for $49.95 at your local “Best Guess” or just wait for your free one as the prize in your box of “Craker Jacks” going to need to move that 750,000 units stuck in someone’s warehouse!!!

    Samsung’s Galaxy Gear has not been selling well, according to a new report from BusinessKorea. First launched in September, the $299 smart watch has been purchased less than 50,000 times and has received largely negative reviews.
    With daily sales reaching just 800 to 900 units, Galaxy Gear sales are falling below initial industry expectation, despite an aggressive marketing campaign from Samsung.

  3. Is stick manipulation not a crime in the USA anymore? Seriously, this scum should try and setup his own ‘real’ business, i.e., one that produces items of value, not simply one that bullies money out of hard working company hands.

    I would love to have enough money to buy into his companies, then manipulate the stock market to destroy his value. Stop, that would be illegal, surely!!

  4. The stock market is overpriced because the Fed has been flooding the market with $US created out of thin air (QE) and is then lending them at essentially no cost (discount window) to the very same banksters that crashed the economy in 2007-8. That money is seeking a home and lots of it ends up in the Wall Street casino.

    The “theory” is that they are attempting to counter deflation by inflating the money supply. What they are effecting is a massive transfer of wealth from the bulk of civilization to a very small group of extremely wealthy people. By creating Dollars and dumping them into the money supply they devalue every Dollar you have in your pocket or accounts. By loaning it at essentially no interest to a few well connected banks they are enriching them at no risk and the money is then used to buy real assets (shares of companies, real estate, intellectual property, water rights, etc.) with this funny money.

    The Fed has been doing this without the consent of the President, the Congress or any referendum by voter/citizen taxpayers. Add in that the TARP money was spent and the “bad assets” are still largely in the hands of the banksters and you can begin to see the scope of the theft.

    There will be an accountability in the market and it could be very ugly. The only question concerns the timing. Icahn is correct in stating that the market could face a drop.

    1. The stock market isn’t overpriced. Valuations are far from high’s even though the market indexes appear to be at all time highs. People are leaving bonds for stocks because of the Fed’s actions, no question about that. But businesses have grown, US global brands have grown earnings faster than US GDP, hence the increase in stock values.

      Fed has been near perfect in it’s execution of activities to stabilize the economy since 2008. Want to see what happens with poor execution take a look at Japan. High debt, negative economic growth coupled with deflation. It has taken 20 years to stabilize Japan as it now appears to resume meager economic growth.

  5. I invest in Apple. A lot. I like it more than a bank. Unlike a bank, when you count the dividends, Apple pays interest. Which is good. It is profitable. And they make good products. I wish Icahn would just go away. Apple will need a big pile of money to survive the economic shitstorm Obama is bringing to America.

  6. oh, that is classic. Icahn claims that corporate stock buybacks are driving over-valuation in the stock market — and just a few weeks ago he was pushing Apple to spend more money into AAPL price manipulation games.

    Wall Street capitalists like this always fail to understand that the purpose of a company is to serve the customers, community, and employees. That is best accomplished be wise long-term management with consistent focus on execution and development. When corporate managers start manipulating stock price for short-term gain, it is damaging to EVERYONE except the insider traders.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.