Apple Inc. (NASDAQ:AAPL) is undervalued and a massive buyback of shares is a “no brainer,” billionaire investor Carl Icahn said on Thursday, adding that he could consider a proxy fight if the company did not buy back more shares
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Apple board not doing its job: Carl Icahn
While Apple Inc. (NASDAQ:AAPL) CEO Tim Cook has been doing “a great job,” the company’s board of directors is not doing “an obvious thing” by increasing a stock buyback, activist investor Carl Icahn says.
compelling, you say in the letter that you do consider apple to be your most compelling investment. you’ve been buying shares for the last few months. can you give us an idea of what your average price is in apple, as we’ve said, you’ve raised your stake now to 4.7 million. yeah, about $440 a share.440. you’ve made a good amount of cash already, a fewhundred million dollars at least, it would seem. yeah, we bought a lot more stock, you know, since we did the tweet and since we actually spoke to tim, and, therefore — yeah, i believe we have quite a good profit on it. but i think it’s just begun. i think apple is a very, very compelling story. it has a greatpotential. but the obvious thing would be, for the company to use its $150 billion to buy the stock back. i mean, you know, shareholders didn’t buy the company — if they wanted to buy a bank, they could have bought a bank. so you don’t keep 150 billion around. even if you do keep it, the simple way to get around, the repatriation, is to borrow money. and i do think that on the board, there are, as far as i can see, no one that really has financial expertise. you know, you haven’t a — a number of notable ceos and corporate folks who certainly know their way around a balance sheet, carl, all right? you’d admit that. i certainly would admit that. but i would also say that — i think my record proves it, that i think a lot of boards are not doing their jobs in this country. and in this instance, i think the board is not. i have no criticism of tim cook. i think he’s doing a great job. but i think it’s an obvious thing to do.
Carl Icahn reveals what led him to sell Netflix
When an investment grows more than five times, it’s time to take your chips off the table, billionaire investor Carl Icahn says of his sale of Netflix, Inc. (NASDAQ:NFLX) stock.
what some people frankly are calling one of the greatest trades ever. i know you’ve given credit to your son brett and to daveschechter over there, and it’s well deserved. but i’m curious, after you heard reed hastings the other morning say momentum investors are fuelling euphoria in the stock, did that scare you? was that the moment that perhaps you thought now’s the time that i need to take some profits and be prudent? no, that — that wasn’t at all what motivated me to do it.what motivated me to do it, as i said, that i’m a battle-hardenedveteran of seven bear markets, and it’s possible another one iscoming. i believe sooner or later there will be one. i’m not telling you tomorrow, next month, or even next year. but there will be one. and i lived through all of this. you know, it’s sort of an icahn rule. when you make five times your money, that doesn’t mean you’re a short-termer if you sale and take some chips off the table. and i do think netflix is a great company.and i do think their model is great. so it had no — that — that was not the reason to do it. i think reed hastings is talkingabout a euphoria might be accurate, might not be accurate. but what is true as far as my investment philosophy is, you know, when you make five times your money, you take the chips off the table. being that said, i think the model of netflix is an excellent one, and it’s very hard to compete. and that’s why, you know, when i looked at it, actually, dave and brett brought it to me, it took me about 20 minutes to say this is one of the great ones of all time. you know, this is a no-brainer. let’s just go. 58 bucks. 58 bucks is — yeah, i’m saddened we didn’t buy more one time. i was yelling at the guys, why didn’t you buy more this day? but they did a great job in finding it. and i think apple is also one of theirs. right. in other words, they both love apple.and it’s the same dynamic. it’s compelling for a differentreason, not just the model, although the model is a great one because of their ecosystem and — come on — because of theecosystem and because of the fact that you could use thecapital — right.
Apple doesn’t need $150 billion to innovate: Icahn
Buying back $150 billion worth of stock and ongoing innovation at Apple Inc. (NASDAQ:AAPL) are not mutually exclusive, activist investor Carl Icahn says.
but maybe part of the issue here is with apple specifically, youknow, people think they should — they’re already giving money back to shareholder, already doing a big buyback. this is a company that should be focusing and pouring money intoinnovation, developing the great products they have over time, to keep driving the stock price higher, rather than engaging inwhat some people would term more financial engineering.what would your reaction to be to that? well, you know, scott, it’s interesting you say that. and i don’t think they’re mutually exclusive. a company — apple does not need 150 billion to do this. it’s ludicrous to say they need 150 billion sitting in a banksomewhere in europe to do innovation. they have plenty of money to do innovation. they can borrow whatever they want.there’s 150 billion sitting there and doing nothing. it used to be true of ibm, you had to — you had shareholders that were living in little homes and wouldn’t — couldn’t afford college education for their kids, but the ibm stock would still be growing in the vault for them. you know? it’s the same thing here. apple — it’s absurd to say apple is going to have to use 150 billion for something. i mean, i agree that they’re innovative. i mean, it’s sort of a unique situation for me anyway, because i really do like tim cook. i think he’s doing a good job, so normally, i would be telling you, well, we ought to see a change in the ceo, or we have to change them, and i don’t think that’s true here. you need a change on the board, or some of the board, or at least change the board, shake up the board, to get them to dosomething like this.