Icahn Takes Apple Stake, Talks Buyback With CEO

Aug 14 2013 | 9:31am ET

Carl Icahn took to Twitter to announce his latest activist campaign, targeting Apple Inc.

The hedge fund billionaire wrote that he had taken "a large position in Apple," which he said was extremely undervalued. Then he got to his point.

"Had a nice conversation with Tim Cook today," Icahn wrote, referring to the technology giant's CEO. "Discussed my opinion that a larger buyback should be done now. We plan to speak again shortly."

Icahn, who is currently battling Dell Inc.'s proposed management buyout, elaborated in an interview with Bloomberg News. "They have so much cash and they could borrow money," he said. "Even if the earnings and multiple stay the same, the stock value is greatly enhanced by the buyback."

Icahn believes that Apple's stock could soar from about $490 to more than $700 with a more aggressive buyback program.

"We appreciate the interest and investment of all our shareholders," Apple spokesman Steve Dowling said. "Tim had a very positive conversation with Mr. Icahn today."

Icahn is the second prominent hedge fund activist to push for Apple to return some of its huge cash horde, $146.6 billion at the end of June, this year. In February, Greenlight Capital's David Einhorn agitated for the issuance of preferred shares that would pay a perpetual dividend.

Icahn, whose stake in Apple is said to be more than $1 billion, favors a buyback to a dividend. He is also pushing a share buyback program at Dell.


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