360° Coverage : Icahn Boosted his Apple Investment, Urges $150 Billion Buyback

Icahn Boosted his Apple Investment, Urges $150 Billion Buyback

Mr. Icahn posted a letter for the Apple CEO Tim Cooper, stating that he had enhanced his investment in the company and want to go for a $150 billion buyback strategy

Oct 25 2013, 8:53am CDT | by

Icahn Boosted his Apple Investment, Urges $150 Billion Buyback
Photo Credit: Getty Images

According to The Wall Street Journal, Carl Icahn, the billionaire investor, increased his investment in Apple Inc. by 22% to 4.73 million shares and continued pressurizing the tech giant for a huge $150 million buyback by posting a letter to Tim Cook-the CEO of Apple.

Mr. Icahn wants Apple to apply a self-tender offer in order to buy back the stocks. He states that he is not interested in selling his shares to take profit.

“There is nothing short term about my intentions here”, said Mr. Icahn.

Mr. Icahn advices that performing a buyback at $525 per share will provide Apple’s share with a massive boost after 3 years, raising the value to $1,250.

He said, “As we proposed at our dinner, if the company decided to borrow the full $150 billion at a 3% interest rate to commence a tender at $525 per share, the result would be an immediate 33% boost to earnings per share."

He states that though it “may seem a large buyback, it is not simply large enough given that Apple currently holds $147 billion of cash on its balance sheet.”

Seeing Mr. Icahn’s statement, Bill Gross, the founder and managing director of Pacific Investment Management Co. LLC, responds via tweeter, “leave Apple alone & spend more time like Bill Gates. If Icahn’s so smart, use it to help people not yourself.”

In an interview, Mr. Icahn said ”A lot of critics just keep saying why doesn’t Icahn just leave our companies alone. To me that is like saying: Why didn’t Teddy Roosevelt leave the monopolies alone when they were strangling our economy.”

Apple is yet to make any comment regarding the issue.    

 

 

 

 
 
 


Ehsanul Haque Kanan is covering consumer electronics with passion. He is especially an avid follower of all things Apple.

 

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