Apple jumps as Icahn tweets about 'large' stake
SAN FRANCISCO — With its market value still more than 30 percent below its peak, Apple Inc. has drawn the gaze of investor activist Carl Icahn, who announced a “large position” on the iPhone maker’s stock on Tuesday afternoon.
The announcement — made through a pair of tweets — gave a notable boost to Apple’s stock, which was up more than 4.7 percent to $489.57 by the closing bell. The shares were up about 1.8 percent prior to Icahn’s announcement.
“We currently have a large position in Apple. We believe the company to be extremely undervalued,” Icahn tweeted.
In another message, he said he had a “a nice conversation with (Apple CEO) Tim Cook today,” adding that they “discussed my opinion that a larger buyback should be done now.” Icahn added that, “We plan to speak again shortly.”
Icahn has recently taken to announcing significant actions over Twitter, including moves related to his battle against a privatization deal at Dell Inc. In related news, the National Investor Relations Institute is floating a proposal for rules that would require large investors to disclose their investment stakes more frequently.
Apple, which reported a total cash hoard of more than $146 billion by the end of June, has long been under pressure to return more cash to shareholders — especially over the last year, as its sales growth has slowed and earnings have begun to decline. That has contributed to a sharp decline in the company’s market value, as its stock peaked just above the $700 mark in late September and was on a mostly downward slope for the first half of this year.
The company began a $10 billion stock buyback last year and boosted that program to $60 billion on April 23. The company has not communicated plans to raise that level further.
“We appreciate the interest and investment of all our shareholders,” Apple spokesman Steve Dowling said in an email. “Tim had a very positive conversation with Mr. Icahn today.”
Apple’s shares have been on the rise of late, picking up nearly 18 percent since late July on rising anticipation of the next round of expected product launches this fall. The stock also rose above its 200-day moving average Tuesday prior to Icahn’s announcement.
Over the weekend, the AllThingsD technology blog reported that the company would unveil its next iPhone at a Sept. 10 media event. The Wall Street Journal reported Monday that Apple is building its next large iPad with the same thin, lightweight it used on the iPad mini. Analysts widely expect the new iPads to be unveiled in October.
This is not the first time Apple has come in the sights of activist investors. Earlier this year, the company found itself enmeshed in a battle with David Einhorn of Greenlight Capital, who was pressing for a new class of preferred stock as a way for Apple to return more of its large cash horde to shareholders.
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