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dave

January 22nd 2014 2:48 pm

Someone explain why Carl Icahn keeps writing angry letters about Apple



I need someone who understands the stock market and investing way more than I do to explain the nuances of this Carl Icahn / Apple situation to me. It seems like every week, he's tweeting about buying billions in Apple stock and then asking Tim Cook to initiate a buy back.

If I understand this correctly, it seems like both a short term path to make money and a very selfish thing to do? Presumably, if Apple were to buy back $150 billion of its own stock, that would drive up their stock price.

Anyway, I don't totally understand his motive, but it seems like he's in the news every other week. The dude should have invested in Bitcoin early last year if he wants to make a quick buck! ;)

Via Forbes: www.forbes.com­/sites­/nathanvardi­/2014­/01­/22­/carl­-i...

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beau

His complaint is that Apple is not using its cash reserves in as aggressive manner as they could, which would result in a higher share price. That would either be in a stock buyback, larger dividends, or new acquisitions to enter new markets (Nest for example). His bet is that Apple's inactivity with their cash is keeping share price down, so he buys more. Eventually either they use the cash OR he buys a big enough stake in the company that he can force a change in management to use the cash reserves more aggressively.

That of course would mean a very different Apple.
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frankspin

To piggy back on this I also feel it's not different from most analyst trends right now which is: Apple needs to do X. Where X is whatever hot commodity item that Samsung or Google are trying to capitalize on. While this is on a smaller scale than the first reply, just consider their ticker everytime a new event gets close. It almost always rises in anticipation of some new thing that every person says HAS to happen (TV has been happening for what, 3 years now?) only to be "let down". So the price dips a bit and investors get upset. Essentially, it's a cash grab for him.
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