Carl Icahn Rallies Apple Shareholders To Demand Stock Buyback

The newest cover for TIME Magazine featuring Carl Icahn, the legendary investor who has set his sights on Apple.

The newest cover for TIME Magazine featuring Carl Icahn, the legendary investor who has set his sights on Apple.

Carl Icahn, the richest investor on Wall Street who has been pressing Apple to make a $150 billion stock buyback, has announced the next phase of his master plan. He has submitted a proposal to Apple shareholders that asks them to vote on his buyback, which effectively puts more pressure on Apple to meet his demands.

The question is whether a more aggressive buyback is actually in Apple’s best interest.

In a cover story for TIME, Icahn reveals that he has submitted a precatory proposal for Apple’s next annual shareholders meeting. The nature of the proposal means that even if the majority of shareholders voted for it, Apple’s management would not be forced to comply. But it would pit investors against Apple and possibly create a proxy fight between large stockholders, notes TIME.

Icahn owns nearly 4 million shares in Apple, and he wants the company to take back billions of its own stock and put that money back in the hands of shareholders. The reason for this desire is obvious: since Icahn is a large shareholder himself, Apple agreeing to his buyback proposal would drive up the value of AAPL, and in turn, make Icahn’s holdings worth more.

Apple’s response to Icahn’s new proposal:

“Earlier this year we more than doubled our capital return program to $100 billion, including the largest share repurchase authorization in history. 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. We will announce any changes to our current program in the first part of calendar 2014.”

Icahn has said that his proposal to shareholders is less than his original $150 billion number, and CNBC is reporting that it’s closer to $50 billion.

Tim Cook has been meeting with Icahn personally over the past few months, and the two share a common opinion that Apple’s stock is severely undervalued.

“We’ve discussed a lot of things, and he asked a lot of questions, and really listened.” Icahn says his most recent conversation with Cook was a 20-minute phone call Nov. 21—which Cook’s assistant initially tried to schedule at 5 a.m. Pacific Time. “That’s usually when I go to bed! This guy’s tougher to get than the President.”

  • MrsCleaver

    “Carl Icahn Rallies Apple Shareholders To Demand Stock Buyback”

    It’s way past time for Carl to mind his own business—which is solely investing and making money—and leave the those who make that possible to their own business. His greed cannot be allowed to direct Apple (or any company), and I have faith Apple shareholders and Tim Cook know that.

  • Market_Mayhem

    Icahn can go to hell. No more buybacks, please! Dividends or large acquisitions are what I’d like to see (I’d love to see Apple acquire Tesla). Dividends to attract more institutional and mutual fund investors or large acquisitions to excite potential investors with the dreams of increased revenue. Having $117 billion of overseas reserve cash just sitting in some foreign bank collecting cobwebs isn’t going to do anyone any good. Amazon continually acquires new businesses to build up a solid base and it seems to be working because no one is telling Jeff Bezos how to run his business and shareholders are getting rewarded handsomely. Trying to get anything out of Apple is like pulling deep molars.

  • SumatraFire

    The only thing Carl Icahn is interested in, is Carl Icahn. He’s a troll.

  • aardman

    Amasses AAPL stock in a very short period of time, then demands share buyback. I don’t think Apple management and long-horizon stockholders are too stupid to realize what’s going on here. As a long-term investor in AAPL I’m perfectly willing to go through another swoon in AAPL just to burn this greedy b*stard and have him walk away with his tail between his legs and a billion dollar realized loss. Those of us who are in it for the long haul just scoff at these speculator-driven dips, knowing fully well that after each cohort of speculators play out their hand, the stock’s true value inevitably comes through. Bring it on!

About the author

Alex HeathAlex Heath is a senior writer at Cult of Mac and co-host of the CultCast. He has been quoted by the likes of the BBC, KRON 4 News, and books like "ICONIC: A Photographic Tribute to Apple Innovation." If you want to pitch a story, share a tip, or just get in touch, additional contact information is available on his personal site. Twitter always works too.

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