Thursday, 2 October 2014
Last updated 4 min ago
Oct 24 2013 | 1:09pm ET
Carl Icahn has expanded his Internet communications empire to a venue that allows him to be more voluminous than 140 characters.
Icahn today launched a new Web site, Shareholders' Square Table, calling it "a platform from which we can unite and fight for our rights as shareholders and steer towards the goal of real corporate democracy." And its first issue is Icahn's most recent letter to Apple Inc. CEO Tim Cook, again calling for a $150 billion share buyback.
Icahn, who announced the letter yesterday and said it would be posted on the new site, called for the buyback to begin immediately, and at $525 per share.
"While this would certainly be unprecedented because of its size, it is actually appropriate and manageable relative to the size and financial strength of your company," Icahn wrote. "Apple generates more than enough cash flow to service this amount of debt and has $147 billion of cash in the bank."
Icahn said that he would not participate in any such buyback, "to invalidate any possible criticism that I would not stand by this thesis."
"There is nothing short term about my intentions here," he wrote.
Icahn has been pushing for a buyback since August, when he took "a large position" in the company. He met with Cook late last month to discuss the proposal.
While Icahn's relations with Cook and Apple have been cordial to date, that has not always been the case for the veteran corporate raider. And to emphasize how he really feels about corporate leadership, SST's Web site is headed by a large cartoon, showing investors laying siege to a castle, flagged "Your Company" and inhabited by directors throwing poison pills, hording "cheap stock," hanging dissident director nominees and raiding the corporate treasury, while jetting off in a corporate jet with Super Bowl tickets.
Beneath the cartoon is a 25-year-old quote from Icahn: "A lot of people died fighting tyranny. The least I can do it vote against it."
The new platform and tougher talk on Apple come as Icahn booked a 457% return on half of his investment in Netflix—a move that divided father and son.
In the regulatory filing announcing his sale of nearly 3 million Netflix shares, Icahn also disclosed that his son Brett and Brett's partner, David Schechter, objected to the move. The two even insisted on rewriting their contracts to ensure that any performance fees they receive from Icahn will reflect any further gains—or future losses—that Netflix makes on the sold shares.
The younger Icahn and Schechter wrote that Netflix remains "significantly undervalued" and, "as a subscription service priced at only $7.99 per month, we believe Netflix is one of the great consumer bargains of our time."
"While I basically agree with David and Brett's assessment above and have often held positions for many years, as a hardened veteran of seven bear markets I have learned that when you are lucky and/or smart enough to have made a total return of 457% in only 14 months it is time to take some of the chips off the table."
In a Bloomberg Television interview yesterday, Icahn went further, saying, "I don't know if it is judicious to have one company with that large of a percent in the portfolio."
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
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