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Investor Carl Icahn wants Apple to launch $150 billion stock buyback

Investor Carl Icahn wants a $150 billion buyback at Apple’s current stock price.

Investor Carl Icahn wants a $150 billion buyback at Apple’s current stock price.

NEW YORK — Activist investor Carl Icahn has told Apple CEO Tim Cook that the iPhone and iPad maker should launch a $150 billion stock buyback immediately and disclosed that he now owns 4.7 million shares in the company.

In a letter to Cook posted online Thursday, Icahn said he has increased his stake in Apple by 22 percent from 3.9 million at the end of September. At Apple's current stock price, that's worth about $2.5 billion and amounts to less than a 1 percent stake in the company. He also plans to increase his stake.

Icahn wants Apple to launch the buyback at its current stock price, which closed at $531.91 on Thursday. He stressed that he does not plan to tender any of his shares in the buyback he is proposing.

"There is nothing short term about my intentions here," he wrote. Over the long term, Icahn said he expects Apple's stock price to increase to $1,250 if the company goes through with the buyback as proposed. The highest point that the stock has ever reached was in $705.07, in September 2012.

Apple declined to comment.

Icahn said he wants to make it "very clear" that he supports Cook and Apple's current management team, as well as Apple's culture and "innovative spirit it engenders." It's just that he believes that Apple's current buyback plan — $60 billion over three years — is too small.

Speaking of his proposal, Icahn wrote, "While this would certainly be unprecedented because of its size, it is actually appropriate and manageable relative to the size and financial strength of your company. Apple generates more than enough cash flow to service this amount of debt and has $147 billion of cash in the bank."

The billionaire investor posted the letter on a new website he launched Thursday called "Shareholders Square Table."

Speaking on CNBC on Thursday, Icahn said that if Apple says no to the buyback proposal, he would "test and see how shareholders feel and if we should do a proxy fight."

Investor Carl Icahn wants Apple to launch $150 billion stock buyback 10/24/13 [Last modified: Thursday, October 24, 2013 7:14pm]
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