Investment tycoon Carl Icahn has been bullish on Apple lately. In mid-August, Icahn unexpectedly tweeted that Icahn Enterprises, his diversified holding company, believed Apple to be “extremely undervalued.” Immediately, share prices jumped 5.6%. The next week, Icahn announced on Twitter that he and Tim Cook would be meeting in September to discuss a larger buyback program of AAPL shares.
That’s all nice, but Icahn is a business magnate, not an Apple fanboy. So what the heck is he up to here? A new theory being put forward by some investors is that Icahn has ulterior motives for his sudden Apple love affair: he wants Apple to buy Nuance, a company Icahn has a large stake in.
Some background information. Nuance is the company that provides the voice-recognition technology that powers Siri, Apple’s virtual assistant for iOS. In May, Nuance’s CEO confirmed that Nuance powers Siri, although despite many sloppy claims to the contrary, this has been public knowledge for a long time: Apple had copped to it on their official website long before.
The thinking goes that Apple might consider itself overly dependent upon Nuance, which sells other voice-recognition solutions to other software providers (like Android) and even makes the popular Dragon Dictate voice-recognition software for PC or Mac. Apple doesn’t like being too reliant on an outside vendor, so the theory is that Apple should buy Nuance to bring Siri’s core-tech in house for around $7 billion… a mere pittance in Cupertino’s war chest.
That would be a good thing for Carl Icahn, who owns a 16.9% stake in the company. “Nuance is a leader in voice. Voice is the future. Apple needs to expand its future,” says hedge-fund consultant Charles Gradante. Icahn, then, might be in-love with Apple right now because he’d stand to benefit if the shares of both Apple and Nuance were pushed as high as possible before the deal goes through.
What do you think? Is Icahn just an Apple fan, or will he be suggesting to Tim Cook over dinner in September that Apple could do worse than pony up $7 billion for Nuance? Let us know in the comments.
Source: New York Post