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Today activist investor Carl Icahn indicated on Twitter that he’s actually accumulated ‘a huge position’ in the computing giant Apple. Following, in another tweet, he stated that in a discussion with current Apple CEO, he’d actually ‘discussed [his] viewpoint that a bigger [stock] buyback must be done now.’
Another discussion would follow, the tweet went on to say.
Icahn’s twin Twitter missives have actually sent Apple’s stock 4 percent higher, adding more than $10 billion to the business’s market capitalization. What Icahn is pressing for is that Apple deploy more of its tectonic money reserves to repurchase its shares from the general public.
This would focus future per-share profits on continuing to be outstanding shares in the company, raising their per-unit value. Icahn, naturally, possesses numerous of those shares. Thus, the value of his claimed ‘huge’ stake in Apple would enhance, boosting his individual wealth.
If this appears very familiar, you simply have a great memory. What Icahn is proposing today, or possibly demanding, resembles exactly what he proposed for Dell: That the business tender a greater per-share cost for almost all the business’s public equity, greatly boosting the per-share incomes of the shares that he’d manage. It was a great concept, for Icahn.
What’s rather humorous about all of this is that with a simple two tweets, Icahn moved billions in market price. I’d not think that Apple is too thrilled to see its personal conversations put into the public record in this fashion.
Apple currently pays a cash dividend of even more than $3 per share, and in its latest quarterly revenues report mentioned that it was ‘delighted to have returned $18.8 billion in cash to shareholders with dividends and share repurchases.’
Icahn wants more, and Apple can afford it. The concern at hand is that much of Apple’s money is overseas, and hence expensive to use right here. If Apple repatriates the funds, they’ll be charged the full U.S. corporate tax rate. Nevertheless, the business discovered a method around the problem earlier this year, floating a $17 billion bond measure that will, to price estimate Reuters, fund its ‘ambitious program that’ll return $100 billion in cash to owners of Apple shares.’
$18.8 billion so far, out of a coming $100 billion, and Icahn wishes to step on the gas. It depends on Cook now. Investors, for the time being, are positive.