The activist investor has said he believes Apple's stock is undervalued and that the company should buy back more shares. October 1, 2013 8:12 AM PDT (Credit: Screenshot by Lance Whitney/CNET/Twitter) Carl Icahn's dinner with Tim Cook may end up costing Apple $150 billion. No, it's not the dishes that were expensive, but rather the share buyback program proposed by Icahn. After dining with Apple's CEO, the activist investor recounted the evening in a short tweet on Tuesday: "Had a cordial dinner with Tim last night. We pushed hard for a 150 billion buyback. We decided to continue dialogue in about three weeks." Apple already has a share buyback plan in the works. In April, the company said that it would repurchase $60 billion worth of stock, up from the $10 billion announced last year. Apple said it expects to complete that buyback by the end of 2015. But the number isn't high enough for Icahn. As a major Apple investor (he reportedly owns between $1.5 billion and more than $2 billion of Apple stock), he believes a more aggressive buyback would benefit both Apple and its stockholders. Assuming Apple's stock is currently undervalued, a strong buyback program would reward Apple as the shares rise. A hefty backback would also reduce the number of outstanding shares and trigger a revival in the stock price, Icahn has argued. Apple has stated that its proposed buying is appropriate and that it doesn't plan to increase the amount. However, Icahn has a history of playing an active and often aggressive role in the companies whose stock he owns. I's a safe bet he'll use all of his powers of persuasion to convince Cook to spend more money. We should learn more once the two meet up again in a few weeks. There's just one burning question Icahn didn't address in his tweet -- who picked up the check?
The activist investor has said he believes Apple's stock is undervalued and that the company should buy back more shares.
(Credit: Screenshot by Lance Whitney/CNET/Twitter)
Carl Icahn's dinner with Tim Cook may end up costing Apple $150 billion.
No, it's not the dishes that were expensive, but rather the share buyback program proposed by Icahn.
After dining with Apple's CEO, the activist investor recounted the evening in a short tweet on Tuesday: "Had a cordial dinner with Tim last night. We pushed hard for a 150 billion buyback. We decided to continue dialogue in about three weeks."
Apple already has a share buyback plan in the works. In April, the company said that it would repurchase $60 billion worth of stock, up from the $10 billion announced last year. Apple said it expects to complete that buyback by the end of 2015.
But the number isn't high enough for Icahn. As a major Apple investor (he reportedly owns between $1.5 billion and more than $2 billion of Apple stock), he believes a more aggressive buyback would benefit both Apple and its stockholders.
Assuming Apple's stock is currently undervalued, a strong buyback program would reward Apple as the shares rise. A hefty backback would also reduce the number of outstanding shares and trigger a revival in the stock price, Icahn has argued.
Apple has stated that its proposed buying is appropriate and that it doesn't plan to increase the amount. However, Icahn has a history of playing an active and often aggressive role in the companies whose stock he owns. I's a safe bet he'll use all of his powers of persuasion to convince Cook to spend more money.
We should learn more once the two meet up again in a few weeks.
There's just one burning question Icahn didn't address in his tweet -- who picked up the check?
