Icahn asks Apple to commence buyback offer

In a letter, Icahn praises Cook's leadership, but says the discussed share buyback needs to be substantial.

By MSN Money Partner Oct 24, 2013 10:44AM

From left: Investor Carl Icahn ; Apple CEO Tim Cook; Carl Icahn © Chip East/Reuters ; © Alyson Fligg/Rex FeaturesCNBCBillionaire Carl Icahn asked Apple (AAPL) to commence an immediate tender offer to the tune of $150 billion in a letter to Apple CEO Tim Cook on Thursday morning.


The letter, issued in conjunction with Icahn's new website "Shareholders Square Table," comes after Icahn urged Cook to use Apple's $150 billion in surplus cash to buy back company shares.


Icahn is scheduled for a live interview on "Fast Money Halftime" with Scott Wapner at noon EDT Thursday.


In the letter, Icahn praises Cook's leadership, but says the discussed share buyback needs to be substantial.


"We want to be very clear that we could not be more supportive of you, the existing management team, the culture at Apple and the innovative spirit it engenders. The criticism we have as shareholders has nothing to do with your management leadership or operational strategy," the letter says. "Our criticism relates to one thing only: the size and timeframe of Apple's buyback program. It is obvious to us that it should be much bigger and immediate."


Apple shares were down slightly in morning trading.


The letter says Icahn's stake in the technology giant is now 4.7 million shares, up from 4 million, making his total stake roughly $2.46 billion. He said he would withhold his shares from the tender offer.


The letter says his increased investment in Apple reflects "our belief the market continues to dramatically undervalue the company."


"From our perspective, Apple is the world's greatest consumer product innovator and has one of the strongest and most respected brand names in history," the letter says.


In an earlier interview with CNBC, Icahn said he would not be dropping this issue.


"I feel very strongly about this," Icahn told CNBC after his meeting with Cook in September. "I can't promise you the stock will go up and I can't promise you they will do the buyback. But I can promise you that I'm not going away until they hear a lot more from me concerning this."


The letter says Apple's board does not include someone "with a track record as an investment professional."


"In my opinion, any further delay in executing the buyback we hereby propose will reflect this lack of expertise on the board," it adds. "The timing for a larger buyback is still ripe, but the opportunity will not last forever."


Not everyone welcomed Icahn's statement, though. The legendary bond investor Bill Gross took to Icahn's new favorite medium, Twitter, to respond.


More from CNBC

Tags: AAPL
Oct 24, 2013 11:51AM
Great we got this corporate raider billionaire loading up on stocks that are low and then going around telling their CEO's that he wants them to drive the price up so he can sell high. Maybe Apple, Tim Cook, should publicly offer Carl Icahn $450 P/S for all his Apple stock.
Oct 24, 2013 1:12PM
Carl Ichan preys on the weak and mismanaged public companies.  His type, a vulture/hyena, serve a purpose in nature and business.

The complainers are inconsequential monkeys screaming at the horror as he pulls flesh off the slow or crippled carcasses.

Just look at the pictures above --- Ichan --- aggressive
                                                        --- Tim Cook - like a deer in shock
 *** I think Ichan is going for Cook's throat right there !

A picture of Steve Jobs depicts a fleet footed animal the hyena can't get.
Oct 24, 2013 2:55PM

Public companies have a fiduciary duty to look to the interests of the long-term investor/owner.  Icahn just wants to pressure the company to pay him a large cash dividend and then he'll dump his shares.  He's not a long-term investor, he's just a short-term extortionist and Apple should ignore him.

Oct 24, 2013 12:43PM
He should shut the F up, and die. And Apple should increase the dividend.
Oct 24, 2013 10:59AM
Not exactly rocket science here.  Apple already has in place a buyback program and can easily ramp it up a bit but certainly not $150 billion worth.  How about another $60 billion on top of the outstanding balance of the first $60 billion??  Just try to collapse the timeframe a bit to be done in 90 days or so.  Point is Apple is on a run with new and improved products that will make money and increase market share.  No doubt in that so hurry it up to buy it lower than $550 which is certainly going to be a value in 6-12 months.  And EPS are going to look awfully good.  I think......just must say that to end this.   
Oct 24, 2013 12:49PM
Carl Icahn doesn't know anything about the companies he is buying stocks in, no more  than what you and I know. Carl is just attempting to bully Apple around in spite of the fact he owns only about 1% of the shares outstanding. If Apple listens to this Joker, it will literally be the worst mistake in their history. Tim Cook yesterday basically stated what I believe, the money can be better spent on acquisitions. Apple already has a big enough Stock Buyback Plan, they don't need to do any more.

Someone needs to tell Carl to shut the Blip up. Icahn is a professional sham artist. Pump and Dump Specialist, he cares little to what he does to the longer term value of any given company.

Oct 24, 2013 4:23PM
I believe Mr. Icahn is plotting some way to take it all with him when he goes! LOL
Oct 24, 2013 1:34PM
Steve "Mozart" Jobs is gone and Apple has entered the inevitable consolidation phase usually brought about by MBAs.  Look for more existing product line "tweaking" to boost profits and market control.   IBM went through this and took a big slam until they reinvented.  Microsoft is going through a slow / torturous form of it now as their products and services continue to erode and new roll outs fail.
Oct 24, 2013 1:24PM
Come on Tim --- quit stroking that cash --- let go --- let go
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