Sun, Jan 26, 2014 - Page 13 News List

Icahn raises Apple stake, pushes shares buyback

Bloomberg

Billionaire investor Carl Icahn said he increased his stake in Apple Inc by another US$500 million, bringing his total holdings in the iPhone maker to about US$3.6 billion as he reiterated calls for a bigger stock buyback.

Icahn released a seven-page open letter to Apple shareholders last week, repeating his recommendation that the company increase its share-repurchase program.

Icahn announced the additional shares in a new posting on Twitter, following tweets on Wednesday stating he bought another US$500 million in shares over two weeks.

“Given that the company has US$130 billion of net cash and US$40 billion of expected annual earnings, and the fact that it is hard to find a better time in history to borrow money, a US$50 billion share repurchase over the course of fiscal year 2014 seems more than reasonable to us,” Icahn wrote in the letter, which was included in a filing with the US Securities and Exchange Commission.

Icahn, 77, first disclosed his Apple stake in a tweet on Aug. 13, when the stock was trading at about US$468. The shares have since gained 19 percent.

Icahn, who became a billionaire by buying stakes in companies and then publicly pushing management and directors for changes to boost the stock, has been pressuring Apple to return more cash to shareholders.

Apple shares slipped 1.8 percent to US$546.07 at 4pm on Friday in New York.

Prior to Icahn’s involvement, Apple chief executive officer Tim Cook announced a plan for a total of US$100 billion in dividends and buybacks.

“We believe that by choosing not to increase the size of the repurchase program, the directors are actually performing a great disservice to the owners, especially smaller shareholders who may not be in a position to buy more stock themselves,” Icahn said in last week’s letter.

“Apple’s current excess liquidity is without historical precedent and beyond reasonable comparison to its peers or otherwise,” he added.

Separately, EBay Inc said on Wednesday that Icahn has proposed that the company split off its PayPal online-payments unit and that he had nominated two of his employees to join the board.

EBay reported holiday-quarter sales that missed analysts’ estimates.

Icahn has amassed a 0.82 percent stake in EBay stock, the company said, pre-empting a public announcement by the investor.

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