Thu, Aug 15, 2013 - Page 15 News List

Icahn takes large position in Apple, calls it undervalued


Corporate raider Carl Icahn on Tuesday said he has taken a “large position” in Apple Inc, calling the US tech giant “extremely undervalued.”

Icahn, who is in the midst of a fierce battle over computer maker Dell Inc and has a history of taking stakes in firms to seek shakeups, announced his move on Twitter.

“We currently have a large position in APPLE,” he tweeted. “We believe the company to be extremely undervalued. Spoke to [Apple chief executive] Tim Cook today. More to come.”

In a second tweet moments later, Icahn said he would press Apple to increase its stock buyback, in which the company purchases its own shares in a bid to boost its value.

“Had a nice conversation with Tim Cook today. Discussed my opinion that a larger buyback should be done now. We plan to speak again shortly,” Icahn tweeted.

Apple shares, which had been flat most of the day, jumped on the news and closed up 4.75 percent at US$489.57.

Asked about the Icahn action, Apple spokesman Steve Dowling said in a statement: “We appreciate the interest and investment of all our shareholders. Tim had a very positive conversation with Mr Icahn today.”

Shares in Apple last year surged to a record above US$700, but have been in a deep slump over concerns the maker of the iPhone and iPad has been losing its edge in innovation.

Apple remains the most valuable publicly traded company with a market capitalization of more than US$440 billion despite its steep decline in recent months.

Earlier this year, Apple yielded to pressure from the hedge fund Greenlight Capital, agreeing to return about US$100 billion to shareholders over the next two years, including US$60 billion in share repurchases.

Apple shares posted gains on Monday after a report saying the California tech giant was set to announce its next iPhone at a Sept. 10 event.

The Dow Jones news Web site AllThingsD on Sunday reported that Apple scheduled an event next month where it will announce its newest iPhone in an effort to regain ground lost to Samsung and other smartphone makers, most of which use the Google Android operating system.

Speculation has centered around whether Apple will shift its strategy to include a lower-cost handset to appeal to more consumers, especially in emerging markets.

A recent IDC survey showed Apple’s share of the global smartphone market slipped to 13.2 percent in the second quarter, from 16.6 percent a year ago, while Android’s share rose to 79.3 percent.

Icahn has been embroiled in a battle over Dell, seeking to block a private equity buyout led by founder Michael Dell, which Icahn says undervalues the company.

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