By Edwin Chan
SAN FRANCISCO Aug 22 Carl Icahn has spoken
again with Apple Inc's Tim Cook and plans a longer
discussion with the chief executive over dinner next month about
the size of the iPhone maker's buyback program, the activist
investor tweeted on Thursday.
The hedge fund billionaire, known for launching aggressive
assaults on American boardrooms, caused a sensation last week
when he revealed on Twitter he had taken a large position in
Apple and was pushing for the company to expand its program of
share buybacks -- already one of the market's largest.
That revelation, including comments about how he thought the
stock was undervalued, pushed shares of the $400 billion
corporation up 5 percent on Aug 13.
But on Thursday, Apple's stock held steady at about $501.11
in late trade on the Nasdaq, resuming trade after a glitch
halted trading in Nasdaq-listed securities for more than two
Icahn's tweet on Thursday, which came during the trading
suspension, did not reveal much else apart from the fact that he
and Cook had made plans for an in-person tete-a-tete next month.
"Spoke to Tim. Planning dinner in September. Tim believes in
buyback and is doing one. What will be discussed is magnitude,"
the billionaire said on Twitter on Thursday, without
Apple did not respond to requests for comment. In April, the
company bowed to Wall Street pressure and said it would return
$100 billion to shareholders by the end of 2015 - double the
amount set aside previously. It got there in part by raising its
dividend 15 percent and boosting its share buyback program
six-fold to $60 billion, one of the largest of its kind
As part of that program, it bought about more than $16
billion worth of stock in the June quarter, much more than
analysts had expected.
Icahn told Reuters last week that the iPhone, iPad and Mac
computer maker has the ability to do a $150 billion buyback now
by borrowing funds at 3 percent. And he argued that by
increasing its program, Apple's stock could regain the $700
level it touched in September.
Icahn, who this year launched strong opposition to Michael
Dell's $25 billion effort to take Dell Inc private, did
not say how many shares of Apple he holds.
A source familiar with the matter, who declined to be named
because Icahn hasn't disclosed his holdings in Apple, said the
investor's stake was worth around $1 billion, a fraction of the
company's market value of more than $400 billion.
He is the second prominent activist to target Apple this
year. The company averted a dispute with hedge fund manager
David Einhorn of Greenlight Capital, who sued Apple to try to
block a proposal regarding voting on preferred shares. Einhorn
later withdrew his lawsuit.
Analysts said Icahn's interest in Apple helped cement
improving sentiment on the stock, as investors began to
anticipate a new line-up of gadgets in the fall, including
possibly a cheaper iPhone that can spearheard a deeper drive
into fast-growing emerging markets.
Speculation has also persisted that the company may be
planning some sort of TV or smartwatch product - worn on the
user's wrist - in the near future.
Cook said last month there will be products "in new
categories" but gave no details.