- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Carl Icahn Increases AAPL Stake to $2.5B, Requests Immediate $150B stock buyback
Posted on 10/24/13 at 6:49 pm
Posted on 10/24/13 at 6:49 pm
quote:
Billionaire activist investor Carl Icahn has published a new letter sent to Apple CEO Tim Cook, addressing his thoughts on an enhanced stock buyback plan for the company. The letter, released on Icahn's new Shareholders' Square Table website and republished by StreetInsider, also notes that Icahn now holds $2.5 billion in Apple stock, having increased his position by over 20% since he met with Cook at the very end of last month.
"When we met, you agreed with us that the shares are undervalued. In our view, irrational undervaluation as dramatic as this is often a short term anomaly. The timing for a larger buyback is still ripe, but the opportunity will not last forever. While the board’s actions to date ($60 billion share repurchase over three years) may seem like a large buyback, it is simply not large enough given that Apple currently holds $147 billion of cash on its balance sheet, and that it will generate $51 billion of EBIT next year (Wall Street consensus forecast)."
quote:
Icahn lays out his expectations for earnings per share and stock value growth that could be expected from such a move, and notes that Apple could easily manage debt payments if it were to finance the entire $150 billion buyback with debt at 3% interest.
"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. Apple generates more than enough cash flow to service this amount of debt and has $147 billion of cash in the bank. As we proposed at our dinner, if the company decided to borrow the full $150 billion at a 3% interest rate to commence a tender at $525 per share, the result would be an immediate 33% boost to earnings per share, translating into a 33% increase in the value of the shares, which significantly assumes no multiple expansion. Longer term (in three years) if you execute this buyback as proposed, we expect the share price to appreciate to $1,250, assuming the market rewards EBIT growth of 7.5% per year with a more normal market multiple of 11x EBIT."
LINK
You guys think Apple will heed his advice? How much could this push up the price if Apple does indeed accelerate its buyback plans?
Posted on 10/24/13 at 7:17 pm to saintforlife1
I hope they do. I've been in since $330s.
Posted on 10/24/13 at 7:23 pm to saintforlife1
This simpletons opinion: Billion dollar pump and dump. If he wanted Apple to buy back bc the stock was undervalued he would not have published the letter, which he knows will inflate the price.
This post was edited on 10/24/13 at 7:25 pm
Posted on 10/24/13 at 7:27 pm to Putty
He actually said he would not tender his position.
Posted on 10/24/13 at 9:14 pm to Putty
quote:
Billion dollar pump and dump..
Exactly. Ichan has gotten to be as annoying and self-deifying as Trump.
Posted on 10/25/13 at 9:51 am to GaryMyMan
Does Icahn realize he's gonna die soon, so now he's trying to make as much noise as possible?
Posted on 10/25/13 at 2:48 pm to Putty
quote:
Billion dollar pump and dump
Hard to quietly dump 2.5B.
Edit: The letter is certainly a pump though. Hope it works.
This post was edited on 10/25/13 at 2:49 pm
Popular
Back to top
Follow TigerDroppings for LSU Football News