Billionaire Carl Icahn says Apple shares could trade at $700

Tue Aug 13, 2013 5:41pm EDT

Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference, held at the New York Stock Exchange, June 27, 2007. REUTERS/Chip East

Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference, held at the New York Stock Exchange, June 27, 2007.

Credit: Reuters/Chip East

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(Reuters) - Hedge fund billionaire Carl Icahn took a "large" position in Apple Inc. (AAPL.O) shares and told Reuters on Tuesday that he believes Apple should trade at $700 a share.

In a telephone interview, Icahn said he believes "Apple has the ability to do a $150 billion buyback now by borrowing funds at 3 percent.

"If Apple does this now and earnings increase at only 10 percent, the stock - even keeping the same multiple currently - should trade at $700 a share."

Apple shares were at $489.57 on Tuesday.

Apple has "huge borrowing power, little relative debt and trades at a low multiple," Icahn said.

Earlier on Tuesday, Icahn stunned markets after he sent a tweet, saying: "We currently have a large position in APPLE. We believe the company to be extremely undervalued. Spoke to Tim Cook today. More to come."

He also tweeted: "Had a nice conversation with Tim Cook today. Discussed my opinion that a larger buyback should be done now. We plan to speak again shortly."

(Reporting By Jennifer Ablan; Editing by Andrew Hay and Ken Wills)

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Comments (2)
Vuenbelvue wrote:
What is the greedy man saying. Because I bought a lot of shares for $480 a share and now own a big block that Apple Corporation or other investors should now buy me out at $700 plus a share giving me a 45% profit because I am Karl Icahn? Oh, My bookkeepers will fix it so I don’t pay tax on the profit because “I yam who I yam”. Where’s the spinach?

Aug 13, 2013 7:59pm EDT  --  Report as abuse
OnTheGround wrote:
One of America’s top predators is just pushing to fill his own pockets. Anyone who wants to know this man’s history should look into how junk bonds came into being – which was just a big Ponzi scheme. Junk bonds are still traded because 1) the pension plans are afraid to get rid of them, and 2) they have been packaged into many funds. They have no intrinsic value of their own.

Aug 13, 2013 11:37pm EDT  --  Report as abuse
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