Billionaire investor, Carl Icahn speaks to Bloomberg Television’s Trish Regan this afternoon on “Street Smart” and said on Apple Inc. (NASDAQ:APPL):

Carl Icahn

  • Apple buyback would be ‘no-brainer’
  • “We are not leaving Apple, we are there to stay”
  • “Apple needs a board that goes in and does a huge buyback. We are saying that. I respect Tim Cook and I expect to talk to him again very shortly and I think he is doing a very fine job.”
  • Apple should buy back $150 Billion in Stock
  • To critics of the Apple buyback:  “[they] have not bothered to read the balance sheet or maybe does not know how to read a balance sheet.”
  • Tim Cook believes the stock is very Cheap
  • Not looking for a quick turn in Apple

Icahn also said on J.C. Penney Company, Inc. (NYSE:JCP): “we have stayed away from years. And we continue” and on Netflix, Inc. (NASDAQ:NFLX): I can only say that my son and Dave, his partner, have certainly earned a say in what they believe we should hold or not, and I do not think they are wrong with what they said in that press release. Basically, Netflix is a great company, but, you know, as I said, I have been a veteran, and a battle hardened veteran of seven bear markets, and, therefore, there comes a time when you are making 500% on your money that you take your chips of the table…. I think Netflix has a great model. But I did take some chips off the table.”

Carl Icahn video embedded below

Carl Icahn on recent criticism of the potential apple buyback program:

“I think that some of the critics that you listen to are just absurd. I just heard someone say that Apple might need the money for other things. That is tantamount to saying that Bill Gates should not fix his house because he needs the money for charity. They have so much cash, with no ballroom, how can you possibly have that type of criticism of a buyback? They might need the money for other things? Apple is not a bank and shareholders did not buy the stock to be a bank. We have no complaints about the management and what they are doing with technology, but there is no one on that board who really had a great knowledge of fiancé as far as I can see, but maybe I am wrong on that, I do not want to start a new war. I will say this, to a list criticism saying that they need money for other things, it is idiotic. Or it is a complete lack of reading a balance sheet.”

Carl Icahn on why he thinks a buyback program is something Apple needs to be doing right now:

“I think a company and its board should do everything they chance to enhance value. This is what you call a no-brainer. At the risk of being a modest, we have the best record by far over the past 12 to 13 years and it is done because of activism and because we proved over and over that you can go into companies and make management accountable or change them, which the boards are lax in doing. If that were done more and the law allowed for it more, we could not have the problems.”

“Look, the market is up right now, but I believe the market is up not because our companies are doing that well but because interest rates are ridiculously low and as a result is companies are making money, but making it the wrong way. Jobs? There are no jobs. The jobs are very scarce. Therefore what you need are companies that are better run. I will say that there are many well-run and great companies. Apple, I believe, is managed well, but the board is not doing the job they should be, take this cash that is making them no money, or borrow, which is the same thing, if you get into financial engineering. If you borrow money at 3-percent, which they can do, they can buy stock that returns 16-percent. It is a no-brainer.  To have critics say that you should leave Apple along because they aren’t icon and because of this and that, they have no knowledge of how to read a balance sheet. They have plenty of money to do anything they want, even if they did the buyback. The interest alone would purchase $150 Billion. It is absurd to make this kind of criticism. I will obviously not tell you what is in the letter, but you can judiciously guess that we are not leaving Apple, we are there to stay and our record shows that we have been very successful in the last 12, 13 years going in, cleaning up companies that need to be cleaned up or changed. I think that Apple needs a board that goes in and does a huge buyback. We are saying that. I respect Tim Cook and I expect to talk to him again very shortly and I think he is doing a very fine job.”

“I would think that Tim would not want to talk to me until his earnings come out, and I would respect that.”

Carl Icahn on whether the model will have to change and Tech companies that are averse to debt will need to adopt new models where they take on debt:

“There is a time to borrow and time not to. But I do not want to digress from what you are really asking. If the company has $150 Billion cash, there is nothing wrong with them borrowing. They are sort of borrowing against the cash in because they cannot repatriate it. Borrowing there is not the same as borrowing money and leveraging your balance sheet, in a sense. It is a completely different equation or dynamic. We are not talking about it being wrong tomorrow. That is a different question that you could argue. Here you are not a bank, sitting on $150 Million. The stock is so low on value related to earning, related to the $50 Billion cash flow, it is patently absurd not to buy it.”

“I owned a bunch of oil wells in 2000. There was a partner that we had, and the partner wanted to sell for one reason or another at a very cheap price. Well, he was nice enough to offer them to me. It is no different with Apple. Apple is selling their stock. Apple stock is selling at a very low price. Why should the shareholders not get the benefit of that if they have another buyer? I get the benefit of buying stock as opposed to Apple getting it.”

Carl Icahn on how big of a buyback does Apple need:

“We have recommended several times, $150 Billion. We are making a bunch of pledges in the letter, and I think you will find it very interesting. I think it will stop any criticism

1, 23  - View Full Page