Carl Icahn chops Apple buyback demand

“Carl Icahn is softening his approach to getting at Apple Inc.’s bulging cash pile, now seeking a shareholder vote for a more-modest share buyback than what he proposed earlier this year,” David Benoit reports for The Wall Street Journal.

“The activist billionaire had originally urged the technology company to repurchase $150 billion of its stock immediately. He called a previously announced buyback by Apple, which the company said was the biggest buyback authorization in history, too small and too slow,” Benoit reports. “Now, he is asking for $50 billion in buybacks on top of Apple’s previous program, according to people familiar with his latest overture to Apple. The proposal would call for the buybacks to be done by the end of September, these people said.”

“Apple in April said it planned to repurchase $60 billion in shares and return a total of $100 billion, including in dividends, through 2015,” Benoit reports. “His latest request could also help Mr. Icahn reach a middle ground with management. Apple CEO Tim Cook has had dinner with Mr. Icahn, and both sides have expressed a willingness to talk and avoid any protracted battles.”

Read more in the full article here.

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  1. Why is Apple even talking to this guy? Surely there are other individuals or companies who own as much or more Apple stock. If so, I’ve never heard of them getting such private discussions.

    1. Yeah, isn’t it a violation of SEC rules for Cook (CEO of the company) and Icahn (a private investor) to have a private meeting discussing future plans of a publicly traded corporation, particularly ones which obviously will have a significant effect on the stock price?

  2. This is a stupid idea for what Apple can do with its cash. If I had Icahn’s clout, I’d recommend that Apple acquire the best one thousand app developers. It would cost less than $100B. It would take those all of those mobile apps out of the Android store, while giving Apple the best few thousand Cocoa engineers in the world.

    Hundreds of engineers at those top thousand app developers are ex-Apple engineers anyway. They’d bring their real-world perspective back into the company. Retreads FTW.

  3. Apple is going to have enough money after Q1 to easily do a $50 billion buyback without issuing any debt. This quarter will possibly see profit on the order of $20 billion . Q1 will be about 9 months of the anniversary of the first dividend announcement.

    Here’s what Apple could do in Q1:
    -Announce an additional 50 billion on top of the existing 100. It will be spent over two years–no problem.
    -Announce that there will be a dividend increase but not until later in the year (who knows when)

    If there is a selloff like last year, Apple can simply eat up the shares before they announce the blockbuster products of 2014.

    It’s going to be tough for Google, Amazon, Wall Street to keep Apple down. For one, they are a premium brand and will make a ton of money no matter what. Many people don’t give a shit how ugly a PC box is, but phones spend a lot of time in your hands (and in public view). Luxury matters. Second, Apple focuses and focuses well. Amazon and Google are all over the place. In essence, I think they will end up like Microsoft eventually.

    /end rant

  4. NOTE to Carl: your GREED is showing. No one cares what you think. Go away, and play with your toys like a good boy. Stop bothering people that are actually producing inovative products. You’re not entitled to Apple’s money.

    1. Greed is just the tip of the iceberg.

      This line says it all: ” …too small and too slow,”

      Instant gratification is what he wants. Wall Street no longer wants to wait 5-10 years for an investment to pay off, they want it in days.

  5. BeingCarl, he may finally have shed his snake-skin ruthlessness and decided that he doesn’t have enough power to ruin this company. It is NOT a money generation machine.

  6. Maybe, just maybe, Icahn has listened to Cook and Cook’s quietly persuasive charm has convinced him that Apple is, and always will be a company that looks to the long term and will not be adopting any ill-conceived short term strategies to temporarily inflate the share price.

    If Icahn wants to invest in AAPL in the long term, I’m sure that Cook will welcome him with open arms and will do all he can to make that decision pay off for Icahn and all other investors, but if Icahn wants to speculate on AAPL just for a few months, then Cook will hear what he says, but ignore him.

  7. The only logic I see in an increased stock buy back is that Apple is actively investing its cash stockpile, and in terms of stock investments the best company to invest in could very well be Apple, Inc.
    By further investing in their own company as the best decision, they also improve their own investments by reducing supply and raising the stock.

    It’s a rare positive catch-22 of how to invest their cash in the best investment. Usually a company does the buyback out of desperation but perhaps not in this case.

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