Apple buyback? Still not happening, but Icahn buys another $500M in shares

Apple buyback? Still not happening, but Icahn buys another $500M in shares

Summary: Investors hoping to hear something new about Apple's share repurchase program were disappointed by more than its sluggish iPhone sales. With the stock under even more pressure, Carl Icahn announced he'd purchased another $500 million worth of shares.

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TOPICS: Apple, iOS, iPhone
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Apple CEO Tim Cook had liitle or nothing new to say about a possible stock buyback plan in the wake of Apple's somewhat disappointing first-quarter earnings report.

Any hope that Apple would escalate its share repurchase plan ended about halfway through the company's earnings call with analysts when Cook essentially said there's nothing new to announce on the buyback front – at least not yet.

"We've been buying back (shares) all year," he said, noting that the company has repurchased just north of $28 billion in stock of the $60 billion authorized to date.

Apple did announce a cash dividend of $3.05 a share Monday that will be paid out to all shareholders of record on Feb. 13.

And while activist investor Carl Icahn has derided Apple's board for hoarding its cash – now almost $160 billion following the latest quarter – Cook made it clear that he and Apple won't be bullied into altering course.

"I'm a big believer in buying back stock," he said. "That doesn't change whether the stock goes up or down."

Well, the down part of that equation became more pronounced in the immediate aftermath of Apple's record-breaking yet somehow disappointing first-quarter results. Sales in the quarter checked in at $57.6 billion and it raked in a profit of $13.07 billion, or $14.50 a share – easily topping the most optimistic EPS estimates.

But that didn't stop Apple shares from plummeting in after-hours trading, and the sell-off continued Tuesday morning as shares fell as much as 8 percent at one point before recovering to be off just $37.50 a share, or 6.8 percent, to $513 a share.

Meanwhile, Icahn broke his silence late Tuesday morning when he tweeted that he had just purchased another $500 million in Apple shares, bringing his total investment to more than $4 billion.

"My buying seems to be going neck-and-neck with Apple's buyback program," he tweeted. "But (I) hope they win that race."

 

Topics: Apple, iOS, iPhone

About

Larry Barrett is a freelance journalist and blogger who has covered the information technology and business sectors for more than 15 years.

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10 comments
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  • Ever tech analyst has a pet theory on why Apple stock prices fell yesterday

    Actually, if one researches past historical trends for Apple stock fluctuations, it becomes apparent that after EVERY record breaking earnings report, Apple stock declines. I don't know why but it does.
    kenosha77a
    • Post Steve Jobs Era

      Apple stock prices are now being driven by hype, not substance.
      Sean Foley
      • re:

        I think you may have that backwards.
        Sir Name
    • Growth vs income

      apple's record quarters mean eventually their growth will slow. Investors try to out smart the market by selling on the good news, and buying back when the stock slides. Icahn just made a nice profit if he bought when apple was down 8%.
      2low_tech
      • Apple's growth is already slow and will stop altogether in the current ...

        ... quarter, according to Apple's own prognosis.

        Interestingly, though, Apple's share on mobile phone markets grew 6-7% in Q4, while Samsung's was down 1%.
        DDERSSS
  • The smartest thing Apple could do, IMO is go

    private. It's amazing how many government regulations you no longer have to worry about if you are privately held. I wouldn't be surprised if this was a long-term goal for Cook. Buy the stock back steadily and quietly to keep share prices stable.
    baggins_z
    • is this why so many companies are going this route?

      Going private seems to be the latest trend, why?
      otaddy
      • Yes, less regulation

        and no need to publish quarterly results. This allows management to focus on their long strategy without the interference of large shareholders.
        2low_tech
  • Icahn

    I wish Apple the best but Mr Icahn I hope somehow you lose your a@#. You have destroyed too many lives in your career.
    fdhealy4
  • Buy for Icahn

    For Icahn...convince Apple to buy back shares and get the word out. This will drive up the share prices then Icahn sells all his shares and makes a ton of money. He a leach that creates nothing.
    bubbagti