Icahn Boosts Apple Stake to $3 Billion in Push for Buyback

Jan 22, 2014 5:25 pm ET

(Updates with Icahn comments in third paragraph.)

Jan. 22 (Bloomberg) -- Billionaire investor Carl Icahn boosted his stake in Apple Inc. to $3 billion, adding to one of his biggest holdings as he continues to push the iPhone maker to buy back more stock.

Icahn said he purchased $500 million worth of shares in the past two weeks, in one of three Twitter Inc. messages today. He called the additional investment a “no brainer” and said an in-depth letter is coming soon on the company’s need to repurchase more shares.

“There’s nothing wrong with the management of Apple,” Icahn said today in a Bloomberg Television interview with Trish Regan. “I just think that the board is just plain wrong in not taking advantage of a very undervalued situation at Apple and not using that capital.”

At $3 billion, Icahn owns less than 1 percent of the Cupertino, California-based company. Icahn, 77, first disclosed his Apple stake in a tweet on Aug. 13, when the stock was trading at about $468. The shares have since gained 19 percent. Icahn, who has become a billionaire by buying stakes in companies and then publicly pushing for changes to boost the stock, has been pressuring Apple to return cash to shareholders for the past five months.

Prior to Icahn’s involvement, Apple Chief Executive Officer Tim Cook announced a plan for a total of $100 billion in dividends and buybacks.

Apple Board

Apple’s board is “doing great disservice to shareholders by not having markedly increased its buyback,” Icahn wrote in of his tweets.

Apple rose less than 1 percent to $551.51 at the close in New York. The stock has gained 9.3 percent in the past year, trailing the Standard & Poor’s 500 Index’s 24 percent advance.

As of Sept. 30, Icahn Associates Corp. owned 3.88 million Apple shares worth $1.85 billion, its fourth-largest holding.

Steve Dowling, a spokesman for Apple, pointed to a proxy last month. Apple then recommended investors vote against Icahn’s proposal that the company commit to buying back at least $50 billion worth of shares in fiscal 2014. Apple said in the proxy that it’s “thoughtfully considering options for returning additional cash to shareholders” as it also evaluates where to invest capital.

--Editors: Cecile Daurat, Reed Stevenson