The American businessman and investor Carl Icahn is turning his attention on Apple. Mr. Icahn recently cashed out on his Netflix Investment with a 457% profit. He has now increased his stake in apple to 4.7 million shares. Although this is a daunting number for some it is only half of 1% of Apples outstanding stock.
In a recent letter from Mr. Icahn to Apple's CEO Timothy Cook, he called for immediate tender of stocks. Icahn is pushing the company to repurchase 150 billion in stock at 525 a share. This tender offer would be funded by a combination of new debt and available cash. In addition he want Apple to raise its dividends to share holders.
Icahn claims that this tender would increase earnings per share to 33% through a reduction of share count. He also claims that the result would be a rise in price per share to $1250 in the next three years. Mr Icahn vowed that he would not participate in the tender or sell his shares.
In a statement he said, “In my opinion, any further delay in executing the buyback we hereby propose will reflect this lack of expertise on the board,” he writes. “My firm’s success and my expertise as an investor would be difficult for anyone to argue.” Although Mr. Icahn has a large amount of shares, he does not have a considerable amount of control of the company. He has however gained considerable influence due to his considerable winning streak.
Mr. Icahn is one of a many "activist investors" who want to give more capital to shareholders. Apple stock is down 25% from its 705$ peak around this time last year. Apple is expected to report their quarterly earning on Monday October 28th. The letter from Icahn to Cook is published on his activist website www.shareholderssquaretable.com
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