Friday, November 15, 2013

Icahn Taking Big Bites Of Apple

Carl Icahn, the activist investor that almost every CEO dreads to see in the list of company shareholders, is ready to play hardball with Tim Cook and Apple Inc. Icahn has been pushing for a $150 billion share buyback program that Cook has been putting off. Now, Icahn has revealed that he is holding 3.9 million shares of Apple Inc. (NASDAQ:AAPL) and he’s ready to put the squeeze on.

Icahn’s position in Apple was disclosed to be holdings valued at $2 billion, according to documents filed on Thursday. However, it is expected that his actual holdings will be larger than what was disclosed in the Securities and Exchange filings.

Icahn Pressures Tim Cook
Apple Inc. CEO Tim Cook received a letter from Carl Icahn last month, requesting that the board boost the stock buyback plan. At the time of the letter, Icahn noted he had increased his holdings to 4.9 million shares. He claims the stock is undervalued, which is what is fueling his aggressive purchases.

The stock buyback plan that Icahn is pressing for is a large increase over the current plan to give out $100 billion in buybacks and dividends. However, Icahn says investors need to see that Apple is willing to give back to those who invest in the company. He feels that Apple is too focused on building its already massive cash reserve, which could be better put to use in re-purchasing shares of the company.

Tell Us What You Think
Should Icahn be pressuring Apple Inc. to boost the buyback program, or is Tim Cook on the right path in building a cash pile for Apple’s coffers? Let us know in the comments below.