Apple Inc Takes Heat from Carl Icahn as Stock Climbs After Icahn's Tweet of $500M Investment
Apple Inc is once again the target of billionaire activist Carl Icahn as he posted on Twitter that he bought US$500 million more shares within the past two weeks. With his latest investment in Apple, Mr Icahn's shares are now worth more than US$3 billion.
Carl Icahn has previously urged Apple Inc to agree to another $50 billion stock buyback. In an interview with CNBC, Mr Icahn said he will buy more of Apple's stocks and declares his decision as "one of the greatest no-brainers of all time."
With Mr Icahn's additional investment, Apple Inc's share price climbed 0.5 per cent at US$552.09 after its previous increase of as much as 1.5 per cent. The billionaire investor has made it clear he is not against Apple management, but he is not pulling out his investment.
Apple Inc and Carl Icahn are expected to battle it out in the company's annual shareholders meeting. Mr Icahn is expected to submit his $50 billion buyback proposal in the February 2014 meeting.
Apple Inc's shareholders will be voting on whether or not to accept Mr Icahn's stock proposal to increase the company's buyback programme to $50 billion. According to a previous statement, Apple is urging shareholders to reject the stock proposal.
In the event that Apple's shareholders will decide to accept Mr Icahn's plan, Apple will not be obliged to follow the decision since the stock proposal is a "non-binding advisory resolution." The wealthy investor Mr Icahn has been pressuring Apple to increase the amount of its buyback programme.
After tweeting his additional investment in Apple, Mr Icahn posted a follow-up tweet with the sentiment that Apple Inc is "doing great disservice to shareholders" by not increasing the stock buyback. Mr Icahn's $3 billion stake in Apple is only 1 per cent of the company stock.
Apple Q4 FY2013 Earnings Report
Apple has yet to reveal its official holiday quarter sales until Jan 27, but analysts have released sales estimates of the iPhone and iPad. Some analysts predict a record 55 million iPhone sales. Fortune's Philip Elmer-DeWitt believes Apple's iPad sales could reach 10 per cent year over year.
With only a few days remaining until Apple CEO Tim Cook's earnings conference call, it remains to be seen whether analysts' predictions are right on target.