Jan 22, 2014
Carl Icahn and associates increase Apple stake to more
than $3 billion
CUPERTINO — Activist
investor Carl Icahn and his associates have increased their stake in
Apple to more than $3 billion while adding more pressure on Apple’s
board to pursue an unprecedented $150 billion stock buyback that some
industry analysts believe would ruin the iconic company.
In a series of tweets
Wednesday, Icahn said that he and his associates bought more than $500
million worth of Apple shares in the last two weeks and added that,
“We feel $APPL board is doing great disservice to shareholders by not
having markedly increased its buyback. In-depth letter to follow
Shares of Apple were up
less than 1 percent Wednesday and were trading at more than $552.
Neither Apple nor Icahn
responded to requests for comment.
Since tweeting about his
position in Apple in August, Icahn tweeted Wednesday that, “we’ve kept
buying shares of this ‘no brainer.’”
Icahn has a history of
shaking up shareholders and board rooms at companies like Yahoo, where
he launched a hostile bid to unseat its board of directors in 2008;
Netflix; and most recently Dell, where he had challenged a buyout
proposal from company founder Michael Dell and Silver Lake Partners.
When he turned his sights
on Apple, Icahn last year publicized a letter he wrote to Apple CEO
Tim Cook urging Apple to pursue a stock buyback program that Icahn
believes would more than double the value of Apple stock.
But Trip Chowdhry of Global
Equities Research believes a stock buyback would hurt Apple’s efforts
to innovate and would signal the beginning of a new era of Apple as a
“If Icahn is allowed to do
what he wants to do, Apple’s demise is very, very near,” Chowdhry
said. “Share buybacks and dividends don’t create sustainable
companies. They are just going to accelerate Apple’s demise so that it
will become the new HP. That’s the way Microsoft thinks, the way Cisco
thinks, the way IBM thinks. If Apple becomes the next HP, that will be
a very sad day for Apple.”
Gary Lutin, chairman of The
Shareholder Forum, was involved in Icahn’s efforts to take over Dell
last year, and declined to speculate about Icahn’s motives with Apple.
“We can’t really know what
he’s thinking, but we do know that the stock manipulation works,”
Lutin said. “… The increasing popularity of activism has made it a
perfect stock manipulation process. All you have to do is make a
public statement that sounds like an activist proposal and the stock
price predictably jumps up, as Icahn’s shown us again.”
Photo by Bloomberg News