Icahn turns up heat on Apple, hints at proxy fight over $150B buyback
Says CEO Tim Cook 'doing a fine job,' but blasts the company's board for not taking on debt to buy back shares
Computerworld - Billionaire trading activist and agitator Carl Icahn yesterday turned the heat up on Apple, saying he would "test the waters" with a proxy fight if the company's board doesn't yield to his demand for an historic $150 billion stock buyback.
Icahn went on a media blitz Thursday, making the proxy fight comment on CNBC, which was preceded by an interview on Bloomberg TV and after he launched a new website, Shareholders' Square Table on which he posted a letter he'd sent to Apple CEO Tim Cook.
In those interviews and his letter, Icahn repeated his demand that Apple boost its share price by buying $150 billion worth of stock, a move he called a "no-brainer."
"We're not in this for the short term, for the quick turn," Icahn said on Bloomberg TV, of his Apple investment, which now amounts to 4.7 million shares or about half of 1% of the company. Icahn's holdings were worth approximately $2.5 billion as of the 10 a.m. ET share price. "But Apple's not a bank. Shareholders didn't buy share for Apple to be a bank."
That remark was a reference to Apple's huge horde: As of June 30, Apple held $147 billion in cash, securities and other investments.
Icahn repeatedly said he had no problem with Cook and the Apple management team. "I respect Tim Cook, I think he's doing a fine job. We have no complaints about the management there, as far as what they're doing in technology," said Icahn, who sometimes agitates for management changes at the companies he targets.
But the 77-year-old billionaire -- his current worth of $20 billion put him as the 26th-richest person on the planet, just five spots behind Google co-founders Sergey Brin and Larry Page, according to Forbes -- had nothing nice to say about Apple's board of directors.
"We're not criticizing Tim Cook, we're criticizing a board that won't do [the buyback]," Icahn said on Bloomberg TV.
In his letter to Cook, Icahn elaborated.
"It is our belief that a company's board has a responsibility to recognize opportunities to increase shareholder value, which includes allocating capital to execute large and well-timed buybacks," Icahn wrote. "Apple's Board of Directors does not currently include an individual with a track record as an investment professional. In my opinion, any further delay in executing the buyback we hereby propose will reflect this lack of expertise on the board."
Icahn has been banging the buyback drum since August, when he revealed on Twitter that he had a "large position" in the company. Since then, he has tweeted about scheduling a dinner with Cook, then after the meal that he had again pressed the chief executive on his $150 billion brainstorm.
Icahn, who typically buys a stake in a company to demand changes and advocate the use of cash reserves to boost the share price, again argued that Apple should borrow billions to fund the buyback. While Apple has a massive cash reserve, much of it stemmed from foreign sales and is banked outside the U.S. The company has resisted calls to repatriate it to the U.S. because it would have to pay taxes on those monies.
- Apple unveils minor bumps to MacBook Pro laptops
- Feds arrest Florida man who allegedly conned Apple out of $309K
- Yosemite's traffic share triples after public beta debuts
- Apple hasn't exhausted its supply of Yosemite betas
- 13 pieces of advice for Yosemite beta testers
- The other Apple economy: $2B in devices on eBay
- Apple sends users scrambling for OS X Yosemite
- Long replacement cycle drags down iPad sales
- Apple unwraps OS X Yosemite public beta Thursday
- Apple grows Mac sales by 18% on the back of the MacBook Air
- SANS: Next-Generation Datacenters = Next-Generation Security This whitepaper takes a look at some new technology that may allow security teams to implement more flexible and capable protection models in...
- SANS: Protecting Virtual Endpoints with McAfee Server Security Suite Essentials SANS review of McAfees Server Security Suite Essentials that address some of the emerging challenges of securing virtual platforms and cloud environments.
- Safeguarding the Next-Generation Data Center Use of virtual and cloud servers has exploded. Unfortunately, security often lags behind. McAfee recommends looking at innovative solutions in order to erect...
- Aberdeen: Securing the Evolving Datacenter This report highlights ways security technologies and services are evolving to provide the visibility and control needed to deploy workloads flexibly in the...
- Is SQL Server AlwaysOn really as powerful? Tips and Tricks from the field With the introduction of AlwaysOn, Windows Clustering Services is now more critical than ever.
- What Does it Take to Deliver a Superior Customer Experience? The Two Top-Rated Online Retailers, B&H Photo and Crutchfield Electronics, Share Their Secrets Discuss practical CX tools and service methods such as contact center agents and the use of realtime speech analytics to help contact center... All Macintosh White Papers | Webcasts