Oct 9, 2014 10:56 AM
Icahn renews push for more Apple share buybacks
The Associated Press
Activist investor Carl Icahn is taking another swing at getting Apple to buy back more of its stock and improve the relative value of the shares.
Icahn asked the iPhone maker's CEO, Tim Cook, in a letter dated Thursday to give the company's board a plan to meaningfully increase share repurchases. In return, the billionaire investor promises not to offer up any of his roughly 53 million Apple Inc. shares in the repurchase.
Icahn said in the lengthy letter that the request is not intended to be a criticism of Cook, whom he called the "ideal CEO for Apple." But the investor outlined several factors that he said "reflect a massive undervaluation" of the Cupertino, California, company's shares.
"You have said that the company likes to be 'opportunistic' when repurchasing shares and we appreciate that," Icahn wrote. "With this letter we simply hope to express to you that now is a very opportunistic time to do so."
Apple representatives did not immediately return calls from The Associated Press seeking comment.
Apple has about 6 billion shares outstanding. Icahn's stake amounts to less than 1 percent of that total.
The company's stock closed at $100.80 on Wednesday, but Icahn said a price of $203 per share is more appropriate, given his forecasts for future growth and the company's cash stockpiles.
Earlier this year, Icahn ended a high-profile campaign to pressure the iPhone maker into spending more money to buy back its own stock.
Then in April, Apple's board voted to spend an additional $30 billion buying back Apple's stock and approved an unusual 7-for-1 stock split. That was the company's first split in nine years.
Although a split doesn't change a company's market value, it often helps lift a stock's price by making the shares appear more affordable to a larger pool of potential investors. In Apple's case, the split caused the stock price to fall from about $645 to $92 to adjust for the issuance of more than 5 billion additional shares.
The shares rose 80 cents to $101.60 in midday trading Thursday and have risen about 20 percent since May 1.