July 28, 2021

Apple: Carl Icahn calls for more share buybacks

[Photo : Bloomberg]

The American activist investor Carl Icahn on Thursday relaunched his call for the American IT group Apple to accelerate its share buybacks in order to support its stock market price.

The billionaire justifies his request by invoking “a massive undervaluation of Apple in the current market” and “still excessive liquidity of $ 133 billion”, in an open letter addressed to the boss of Apple, Tim Cook.

Carl Icahn estimates the current value of Apple stock at 203 dollars, double its current price (+ 0.96% to 101.77 dollars shortly after the opening of Wall Street).

The billionaire has built his fortune on hostile stock market raids, and is renowned for his assault on the management of companies where he invests.

He had started to campaign for more repurchases of Apple shares after announcing in the summer of 2013 a stake in the group at the apple, which he had increased in the following months. He now says he owns 53 million shares, or around 0.9% of the capital.

“Since 2013, we have aggressively executed the largest (shareholder) capital return program in history. As we have already said, we will review this program annually and take into account the comments of all our shareholders, ”responded an Apple spokesperson in an email to AFP.

Apple announced in early 2013, under pressure from another activist investor, its first major share buyback program, to the tune of $ 60 billion. In April 2014, he raised the amount of this program to 90 billion.

By adding dividend payments, the total amount paid to shareholders even reaches $ 130 billion.

However, this did not greatly reduce its enormous liquidity, because to finance its gifts to its shareholders Apple borrowed in the markets.

Carl Icahn suggests Thursday “to buy back a lot more (of shares), and faster”, by launching a takeover bid instead of continuing to acquire securities on an ad hoc basis on the market.

He himself undertakes not to bring in the shares in his possession.

The investor says his letter is “in no way to be understood as a criticism” of the way Tim Cook fulfills his role as CEO or the actions of his teams.

Apple has just announced that it will launch a connected watch on the market next year, which will be its first new type of product since the iPad tablet in 2010. It also continues to develop its ecosystem by launching into payments and with applications for the connected home or health. And Carl Icahn, echoing speculation that has long circulated in the market, is betting on the group’s entry into the ultra-high definition television market in 2016.