As Apple opened down nearly 8% following yesterday’s earnings report from the previous quarter, activist investor Carl Icahn announced this morning his third $500 million purchase of Apple stock since the start of the month. Icahn has notably made a lot of noise being vocal toward Apple’s Board of Directors urging a larger buyback program for shareholders, something Apple’s Board has taken a position against, and today’s investment pegs Icahn’s ownership somewhere around $4.1 billion. Icahn’s recent purchases come ahead of Apple’s scheduled shareholder meeting on February 28, 2014.

As mentioned, Icahn already announced a $500 million purchase in Apple landing him at $3 billion just last Wednesday as well as another $500 million purchase the following day. Today’s purchase comes just five days later. With Apple’s market cap around $454 billion, his estimate $4 billion means he virtually has 1% of Apple at this point.

Despite pouring loads of money into the company, Icahn is largely seen as a source of friction for the company. From this WSJ commentary piece:

 “I have no respect for Carl Icahn,” said stock analyst Ronnie Moas in an interview. “He needs to start using his power in a different way.”

Apple has already announced a three-year plan to return $100 billion to shareholders through stock buybacks and dividends. If Apple coughed up, say, $10 billion to pay workers, who knows, it might even be able to afford to create jobs in the U.S. Nobody would even notice the money was missing. Except Mr. Icahn. He thinks he deserves it. He’s smarter.

For what it’s worth, Icahn’s announce failed to move Apple’s stock price shortly after his tweet, an effect it’s sometimes had.

At any rate, we should expect to hear more from the ever-verbal investor ahead of Apple’s late-February shareholder meeting.

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5 Responses to “Carl Icahn announces third $500 million AAPL purchase this month after earnings report”

  1. rlowhit says:

    Dollar cost averaging his way out.

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  2. Carl Icahn is going to destroy Apple. Carl Icahn stay away from Apple you greedy son of a bitch! I am all for American capitalism, but when it allows for assholes like this to exist and play games, you have to wonder.

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  3. I’m not so sure Icahn is all that evil or bad for Apple. There has to be some reason why Apple stock is trading so low compared to its earnings and value. It is one of the lowest trading issues in the market which should make it a great buy. Why did it lose 8% in one day? But then I’m not an analyst to stock expert by any means. Icahn is. His stock buy-back proposal makes sense to me. Apple does have a duty to its shareholders. Jobs didn’t care about shareholders, only about making great products. His success in making great products was a benefit to shareholders, but it still kept shares undervalued. Tim Cook is more shareholder friendly, but still has a lot of Jobs’ ideologies. Is Icahn greedy? No doubt. But is Apple equally greedy? Apple is sitting on more cash that they can possibly spend and only want to share a small part of it with their shareholders. Apple is building a nice spaceship campus. Great testament to them and Steve, but it doesn’t benefit the shareholders. I think you have two greedy people vying for the same money.

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  4. Wyatt says:

    It’s trading low because Apple isn’t giving the stock market what it wants which is unreasonable to begin with. They want super-high growth which can’t be sustained over long periods of time. Carl Icahn is doing nothing more than being an a$$ with his public displays of disapproval of Apple’s refusal to give him what he wants which is for Apple to give unreasonably large amounts of dividends back to shareholds and buy back more stocks at the same time. Which by the way increases the worth of publicly available stocks (his specifically) because I’m pretty sure he is not selling his stocks either. I doesn’t take an expert to figure out what he is trying to do which is nothing more than satisfy his own self-interest. Take note that with all his complaining about Apple he refuses to sell his own stock and continues to purchase more only after it drops in price. Also understand what it means to be a shareholder. A shareholder invests it’s money into said company so that said company can create the product(s) its advertising. In return shareholders stock value goes up and if said company pays dividends on those stocks it’s a win-win (double) for shareholders. Shareholds like Carl Icahn seen to forget why they invest and that investing is not a quick money grab, it’s for long-term growth. Apple in this case crated a hit product (iPhone) and wisely banked and continues to bank that money for future use. They have regularly purchased companys which wouldn’t be possible without those funds. And while everyone may think the amount of money Apple is “hording” is extreme keep in mind once that money is gone it can not be recouped and I guarantee that when the time comes that they actually need it (by the way it has happened already but in smaller doses) everyone on the outside of Apple’s inner circle will be glad they had something to fall one. And if you don’t think that money can easily be spent look at all the other companies over the years that have gone bankrupt due to uncontrolled spending and have been larger and made more money and sold more products than Apple ever did. I don’t understand how people see this as any different than their own personal finances but may that’s because most people live in debt.

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  5. I don’t disagree with anything you say, Wyatt. I am an Apple shareholder (for over 10 years). I watch the company and stocks daily. Having a cash hoard like Apple has is a tremendous advantage for them – as long as they are smart about spending it. So far, I think they have been smart about it. The money they might spend on stock buyback can be recouped. Their monthly income is still very high and it probably wouldn’t take too long to recoup. The amount that Icahn wants to be spent in a stock buy back is not excessive in terms of the total cash hoard that Apple is sitting on. That being said, Apple is a very secretive company (with very good reason). They might have plans (long or short term) that would make the larger stock buyback unadvisable. But Apple is not going to tell shareholders nor Icahn of these plans, if any. I place my trust in Apple management (as my proxy went to Apple). Even so, a part of me wishes that Icahn’s proposal passes. It would mean a higher stock value for me as well. It’s a known vs. unknown. Icahn’s proposal is a known short term increase in stock value. Apple is an unknown due to their secrecy and Mr. Cook’s ability (good so far, but we don’t know his long term vision or ability). Whatever happens at the shareholder’s meeting, Apple is still a great company and IMO a good stock to own.

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