Carl Icahn files shareholder proposal with Apple for share buyback

In an exclusive interview with TIME, billionaire investor Carl Icahn reveals that he filed a shareholder proposal with Apple on Nov. 26 to persuade the company to share some of its $147 billion cash hoard with stockholders. His measure comes in the form of a precatory proposal that calls for Apple to buy back its own shares on the public market. The move would almost certainly drive up the price of Apple’s stock — and increase the value of Icahn’s holding along with those of all Apple investors.

Apple in an exclusive statement to TIME stated, “As part of our regular review process, we are once again actively seeking our shareholders’ input on our program, and as we said in October, the management team and our board are engaged in an ongoing discussion about it which is thoughtful and deliberate.”

Icahn on Tim Cook’s leadership: “Tim Cook is doing a good job with the business. I think he’s good whether he does what I want or not.” But, he adds, “Apple is not a bank.” On his relationship with Cook: “We’ve discussed a lot of things, and he asked a lot of questions, and really listened… A lot of people say Steve Jobs probably wouldn’t have talked to me, and maybe that’s true. But I think he [Cook] found our conversation sort of interesting. He said, ‘Look, you’ve accomplished a lot, and we want to listen to you.'”

Read more in the full article here.

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  1. That is a proposal to move a lot of wealth out of Apple and into the coffers of Mr Icahn. It is a very self interested proposal. It is also in the interest of any of the big holders.

    As a “little guy” – I would rather see increased dividends. That would be $$ in my pocket. Of course he is not interested in that as he would have to pay taxes on it.

    1. Amen. I had several friends who were pilots for TWA. They told some interesting stories about Icahn selling everything he could get his hands on. Spare engines, parts and anything he could find of value to sell. Icahn raped TWA! He’s bad for Apple. He’s bad for AAPL. There are many corporate boards out there that are answering to no one. They are doing underhanded things without any oversight. Shareholder activists are needed in those situations. From what I can see the board at Apple is doing a fine job. Besides, Icahn is not a shareholder activist he is a prick.

          1. That was set in motion well before he ran for any office. GM has been unimaginative and clueless in the automotive market place for years. I think your friend Mr. Obama inherited the whole conservative bag of hurt from those who want to keep life at a standstill.

  2. When Time Cook said: ‘Look, you’ve accomplished a lot, and we want to listen to you.’, Tim Cook probably wants to say “piss off wanker” instead. But that wouldn’t be polite to say to a shareholder’s face who owns a half of a percent of Apple.

    Get a clue, Icahn. You’re a fly that Tim wants to swat.

  3. Cook is an impressive CEO. He keeps growing the company, returns value to shareholders through buybacks and dividends and vigorously defends the franchise from attacks by the likes of Samsung/others.

    The stock price is up. Icahn will gain zero traction with his shareholder proposal. I believe Icahn realizes this and that’s why he was almost complimentary toward Cook and Apple in the interview.

    At the end of the day, Icahn will not go nuclear with his proposal. Rather, he’ll shut up and enjoy the ride as his investment continues to appreciate.

  4. Icahn is one of these greedy pricks. He has never made anything or helped the economy. He cannot manage a business that actually does something useful. It is all about how he can make money at the expense of others. Guys like this should be in prison just out of principle.

  5. During the meeting Tim Cook looked and listened intently as Icahn words kept flowing. Exclusive we recorded what Tim heard.

    Icahn: blah blah blah, blah blah, blah blah blah.

    Tim: Go on. We are really interested in what you have to say

    Icahn: *with a gleam in his eyes and a predatory grin* continues: Blah blah blah, blah blah, blah blah blah….

  6. I’ve posted this in other forums, but here’s my take on all of this.

    Tim Cook should seriously consider Carl Icahn’s suggestion IF AND ONLY IF Icahn signs up to the following:
    Carl Icahn signs an iron clad agreement with HUGE financial penalties for non compliance, and each and every organization he advises in any way shape or form, signs an agreement, to the effect that
    1. They will not sell any AAPL stock during the calendar years 2013 and 2014 that has been acquired by them before 1 January 2015.
    2. They will not sell more than 5% of their holdings of AAPL that they have on 31 December 2014 in any one calendar year through the years 2015 through 2019.
    3. They will not sell more than 15% of their holdings of AAPL that they have on 31 December 2014 in any one calendar year through the years 2020 through 2024.
    4. Starting 1 January 2025 there are no restrictions on any sales of AAPL.

    Why through 2025? Because the corporate bonds Apple would have to sell in order to finance this buyback would likely be paid off by 2025.

    This will FORCE Icahn AND anyone and every company and fund he advises to be long term investors of AAPL (at least 11 years to some extent and through the loan service period). This removes any possibility of Icahn and his associates making any immediate money on the short term bump in stock price due to the announcement of the buyback.

    Let’s see what his opinion of borrowing money to do the buyback is once he and all his associates sign up to such an agreement.

    Without such a scenario here’s how it WILL play out.
    1. Apple announces that it will borrow money to do a massive buyback.
    2. The media widely forecasts a bump in AAPL
    3. A significant bump in AAPL happens.
    4 Icahn proclaims to anyone who will listen how he has forced Apple to unlock wealth in AAPL and how everyone is now much better off. The media buys this hook, line and sinker and repeatedly retells this tale.
    5. Apple finalizes the debt financing and starts the stock buyback. Apple is saddled with $150 B in additional debt.
    6. There is another bump in AAPL.
    7. Icahn (and his associates) sells off a significant fraction of his AAPL holdings and tries to pass it off as “just profit taking” and that “he’s still a big backer of Apple.
    8. The media picks up on Icahn (and his associates) dumping AAPL and the stories get widely circulated.
    9. AAPL drops to the level of step 3.
    10. Icahn and his associates sell more AAPL before it drops further.
    11. The media widely proclaims that Icahn has lost confidence in Apple as clearly shown by his dumping AAPL.
    12 The stock drops to its pre step 1 level.
    13. The media widely circulates stories about how large investors are leaving AAPL and are worried about Apple having so much debt.
    14. The media widely circulates stories wondering how Apple is going to service the debt with its current business model and revenue base.
    15. Icahn publicly states he has lost confidence in Apple management and wonders how Apple is going to service the debt load.
    16. There are many, many loud statements in the media calling for Tim Cook’s head.
    17. AAPL drops to well below its December 2013 level.
    18. Apple starts getting the beleaguered label again.
    19. AAPL drops below $400 again.

    I believe this scenario is EXTREMELY likely if Icahn gets his way. The only people who will make out are those who dump their stock before Icahn does (and, of course, Icahn and his pals, too). The long term investors get royally screwed. Apple gets screwed. In the long term, Apple’s customers get screwed. (We can’t put more money into IR&D. We need to service this huge debt!)

    And so the tale goes.

    1. I think you are pretty much on the money there. I’m hoping Apple’s BoD and all are able to see the very big downside to all of this borrowing just because Ichan wants Apple to do it. Just think of all of the acquisitions of this year alone.. as well as previous years. Without Apple’s so-called “bank” of money none of this would be possible, or at least less so, and with much more risk.

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