Carl Icahn’s open letter to Tim Cook worth $8.35 billion for Apple shareholders

“In a letter to Apple Chief Executive Tim Cook that Icahn made public through a tweet at just after 11 a.m. Eastern on Monday, the billionaire activist investor said he believes the technology giant’s stock is now worth $240, which is 84% above where the stock closed on Monday,” Tomi Kilgore reports for MarketWatch.

“The stock was trading down a few pennies at around $128.74 at 11 am,” Kilgore reports. “With the stock closing Monday up 1.1% at $130.19, Apple’s market capitalization increased by about $8.35 billion since Icahn’s tweet, based on data provided by FactSet.”

“In addition, Icahn’s hedge fund Icahn Associates, which is Apple’s seventh largest shareholder with 52.8 million shares as of March 31, saw the value of its investment grow by $76.5 million in a day since Icahn’s tweet,” Kilgore reports. “Since March 31, Icahn has made $303.9 million on his Apple investment.”

Read more in the full article here.

MacDailyNews Take: Apple has gone up (and down) 1.1% or more in the absence of tweets and open letters from Carl Icahn thousands of times. There is no way to prove or disprove that a daily stock price fluctuation is due to a specific event.

12 Comments

  1. That’s the whole point. Carl Icahn does not publish these “open” letters to provide advice to Apple. He can probably do that with a phone call or email, or a one-on-one meeting over lunch. The purpose is to tell the general PUBLIC (people who are not obsessed by Apple) what Apple “might” do and what AAPL should be priced at as a result.

    Go more aggressively into TV. Build cars by 2020. Increase stock buyback. It does not matter if Apple takes the advice. Carl Icahn probably does not care that much either. The point is to make AAPL move up on the POTENTIAL. And there’s nothing wrong with that… 🙂

  2. Isn’t a little cheesy to write a letter to a specific person, like this is to Tim Cook, and then make it public? I can imagine Cook thinking: Hey Carl, you want to write a self-serving open letter? Fine, just leave me out of it, okay?

  3. Carl is Apple’s biggest cheerleader and I concure with him, Apple is way undervalued but $240 a share is a stretch but the $180-$200 range is where Apple should be trading at NOW!

    1. I agree with you. But many at this site think an investor who has about $5 billion in stock is not allowed to express an opinion, while at the same time these same people express asinine opinions here all the time. Icahn simply said what almost all Apple investors think, but he did so from the vantage point of a very successful and wealthy investor, who normally takes management to task but in the case of Apple he completely supports the management, but simply suggests bigger share buybacks. I personally would prefer larger dividend increases, and think those would help drive the stock up. But Icahn is smart and his involvement with Apple has helped to move the price up in my opinion.

      1. Carl Icahn is Apple’s only big investor cheerleader and it appears he’s in the minority. If Apple was seen as a valuable investment it would move. Other investors would buy it without needing Carl Icahn to tell them that.

        Whatever the reason Apple stays undervalued there must be a solid basis for that otherwise the P/E wouldn’t be shrinking. There has to be a good reason why Apple is valued below other similar tech companies in the S&P 500. Google has a P/E of 27 vs Apple’s 15.5. Google is seen as that much better a company than Apple. Investors are willing to pay that much more per share than they would for an Apple share. I think Tim Cook is doing a fine job but he may never find the key to boost Apple’s value in Wall Street’s eyes.

        Microsoft’s P/E of 20 vs Apple’s P/E of 15.5 is all you need to know that Wall Street thinks Apple is one clunker of an investment and that’s a pretty big insult to Tim Cook’s hard work.

    2. When you personally are willing to pay $180 for a unit, AAPL will be worth $180. Until then, buy as much as you can and get your friends to buy as well to drive up the buying pressure and hence the price.

  4. Personally I don’t really care for him writing and open letter but if the man made $303.9 Billion on his companies investment in AAPL stock than good for him.

    If I had as much AAPL stock as his company has, I’d be singing their praises as well. A letter from me wouldn’t mean squat but it obviously got some peoples attention and as a shareholder, I’m OK with that.

  5. The way to end this foolishness from Carl is to pay out all profits to shareholders. 100%. Apple has shares and if they keep buying shares at some point they would have 51% of the shares. That means when dividends are paid out they would retain 51% of the profit. That’s plenty, more then enough to run the company, invest in other projects, etc. The immediate effect would be to drive the stock price up. I’m sure there would be few if any seller of the stock at these low prices. Think more like 1000+ a share.
    At 3 dollars profit per share per quarter, 1000 share, $12,000 a year to a shareholder, so if someone wanted to buy those shares, I’m sure a stockholder would think first. Something like, in 10 years if Apple can keep this up I would make 120,000 dollars, plus I still have the share to sell if I wish, hum, 130 dollars a share now, NO. That’s the kind of money to put to the side for retirement. If an Apple employee has stock, let’s say 1000 shares, that another $12,000 added to their salary. If they have 100,000 shares, that’s 1.2 million. Who needs a pay raise? Just acquire more shares.
    This also eliminates the chance of an LBO.

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