Today Carl Icahn released the following open letter to shareholders of Apple Inc.:
Dear Fellow Apple Shareholders,
While we are disappointed that last night ISS recommended against our proposal, we do not altogether disagree with their assessment and recommendation in light of recent actions taken by the company to aggressively repurchase shares in the market.
In their recommendation, ISS points out, and we agree, that “on the spectrum of options for allocating capital, the board appears to have been sluggish only in returning excess cash to shareholders,” and even though the company has in place “one of the largest buybacks in history” we agree with ISS that this effort seems “like bailing with a leaky bucket” when “given the scale of the company’s cash reserves.”
That being said, we also agree with ISS’s observation, taking into account that the company recently repurchased in “two weeks alone” $14 billion worth in shares, that “for fiscal 2014, it appears on track to repurchase at least $32 billion in shares.” Our proposal, as ISS points out, “thus effectively only asks the board to spend another $18 billion on repurchases in the current year.”
As Tim Cook describes them, these recent actions taken by the company to repurchase shares have been both “opportunistic” and “aggressive” and we are supportive. In light of these actions, and ISS’s recommendation, we see no reason to persist with our non-binding proposal, especially when the company is already so close to fulfilling our requested repurchase target.
Furthermore, in light of Tim Cook’s confirmed plan to launch new products in new categories this year (in addition to an exciting product roadmap with respect to new products in existing categories), we are extremely excited about Apple’s future. Additionally, we are pleased that Tim and the board have exhibited the “opportunistic” and “aggressive” approach to share repurchases that we hoped to instill with our proposal. It is our expectation that Tim and the board continue to exhibit this behavior as fiduciaries to the shareholders since they clearly seem to agree that our company continues to be extremely undervalued, and we all share a common optimism with respect to the company’s bright long term future.
Carl C. Icahn
Source Shareholders’ Square Table
MacDailyNews Take: Buh-bye, Carl.
Icahn’s stake is “large” to him, not to Apple. To Apple, it’s a drop in the ocean. So, while he can squawk on Twitter and other media, less than a quarter of one percent doesn’t buy him a lot of financial leverage to “force” Apple to do anything beyond a yawn. At 0.22%, he’s lucky Tim even bothered to pick up the phone. – MacDailyNews Take, August 14, 2013
Carl Icahn isn’t rich enough to affect Apple. – MacDailyNews Take, November 15, 2013
New York City Comptroller to urge Apple investors to vote against Icahn’s buyback proposal – February 10, 2014
Proxy advisor: Apple shareholders should reject Carl Icahn’s buyback proposal – February 7, 2014
CalPERS criticizes ‘Johnny come lately’ Icahn’s push for additional Apple buybacks – December 12, 2013
Carl Icahn ups Apple stake to $3.6 billion, reiterates calls for larger stock buyback – January 24, 2014