Apple silences Icahn with share buyback

Apple silences Icahn with share buyback

Summary: Billionaire Carl Icahn said he will back down from a board proposal urging Apple to buy back shares. It took Apple about two weeks and $14 billion to do it.


Well played Apple CEO Tim Cook. You managed to silence Twitter happy, media loving billionaire investor Carl Icahn for a few minutes.

In a letter to Apple shareholders, Icahn said he's going to back down over squawking about share buybacks and how the company uses its cash.

Last week, Apple CEO Tim Cook revealed that the company bought $14 billion of its own shares in two weeks and has new products in the pipeline. ISS, which rates shareholder proposals, said on Sunday that it wouldn't support an Icahn proposal calling for more share buybacks.

icahn twitter

On Monday, Icahn backed down. In a letter to Apple shareholders, Icahn said he was disappointed that ISS wouldn't support him, but did acknowledge that the company's buyback altered the appeal of a proposal urging Apple to buy at least $32 billion worth of shares in 2014.

Previously: Icahn lambasts Apple for hoarding 'cash rather than repurchase stock'

Icahn said:

As Tim Cook describes them, these recent actions taken by the company to repurchase shares have been both “opportunistic” and “aggressive” and we are supportive. In light of these actions, and ISS’s recommendation, we see no reason to persist with our non-binding proposal, especially when the company is already so close to fulfilling our requested repurchase target.

Furthermore, in light of Tim Cook’s confirmed plan to launch new products in new categories this year (in addition to an exciting product roadmap with respect to new products in existing categories), we are extremely excited about Apple’s future.

Add it up and Apple appears to have rid itself of the Icahn distraction---at least for now. If Icahn occupied more than a few hours of Cook's time it's probably too much.

Topic: Apple

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  • laying cash on Ichan's alter is bad, very very bad.

    • that is altar not alter

      alter means to change.

      I have read it is not good for a company to buy back shares. Carl Ichan should be told to shut up, and just tlet them run the company as they please! If the stocks to buy back are his all the better! He would then have no barganing position.
      • Correct your spelling, punctuation, and sentence structure.

      • Typically, if a company buys back shares it's doing one of two things.

        It's either trying to return to private ownership, or it's trying to raise its stock price by limiting shares. Personally, I think Icahn was trying to force a major buyback simply so he could dump his own shares for a profit--after only recently buying thousands (maybe millions?) of shares when it dipped to a relatively low figure. Now, with Apple having purchased back some portion of its shares and pulling itself back out of that market slump, he's challenged to hang onto his shares longer if he wants to take advantage of the typical jump in shares that comes a few weeks after the release of an all-new product.
        I expect he'll still bail at some point, but he'll probably now wait until Apple again hits that $700 mark.
        • That's the problem with these non-investors

          They aren't investing in the company, they are speculating purely on the price of the stock, the well-being of the company be damned.

          Icahn doesn't care if the company he is investing in is still there in 6 months, as long as he can satiate his greed in the next quarter.
  • Choices?

    Innovate or Buy Back Stock? -- Lets buy back stock because innovation is too hard without Steve Jobs.
    Sean Foley
    • Apple didn't have a choice

      If you know who Icahn is, you'll know he's an issue you definitely want to manage proactively!
      • We don't really know.

        Maybe Apple was always looking to buy back and just taking advantage of the lower stock price.
      • We know

        for certain that Steve Jobs would have never let Icahn push him around. My opinion is that Steve Jobs would have spent the money more aggressively on R&D, instead of wasting on short term stock adjustments. I suppose we will never know because Tim Cook is apparently a push over.
        Sean Foley
        • Todd, is that you?

          Just curious. :-)
      • Knowing some

        of his history.....something nasty happening to him could only be construed as a public service......and if dreams were chocolate
    • Right. Because 64-bit mobile CPUs, workable

      fingerprint sensor, and real-time slow motion HD video is just more of the same old same old.
      • Sort of yeah.

        64 bit is old hat in computing. Apple uses the same finger print scanning tech that never took off in laptops and slow motion video capture is new how?

        Nice to have, but nothing to celebrate.
        • "...same finger print scanning tech that never took off in laptops..."

          Maybe you should look at that tech again--because Apple's version is far more advanced than that primitive pad that failed more often than it worked.

          And slow motion video capture IS new; slow motion film requires thousands of images per second and videography had much slower shutter speeds than film for a long, long time. Only with true digital sensors and high-speed recording to media has slow motion videography become possible.
  • buy back

    Icahn doesn't care about the company, he is just out to get more money for himself. Just how many billions do you really need? Eventually this type of greed becomes an obsession and a sickness. Mind you, I have no problem with people getting rich, but there is a point where it just becomes ugly.
    • rich

      I have a problem with corporate raiders getting rich off of companies, and not doing any work for them.
      • Hearsay says he has a strong reputation for doing just that.

        Buy--force the stock to unnatural levels, then sell, often causing a critical drop in his victim's stock... sometimes fatal.