Aug. 14 - Investor Carl Icahn wants Apple to do a bigger buyback, but analysts say that's not likely despite its huge cash pile. Fred Katayama reports.
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Carl Icahn wants Apple to do a bigger stock buyback and do that now, hoping its stock will shoot up to his $700 price target. But some analysts say that's not likely or necessary, despite the fact Apple sits on a huge cash pile.
UBS analyst Steven Milunovich says, "Apple (is) already repurchasing about 5 percent of shares annually and offering a 2.5 percent dividend yield. There doesn't appear much to agitate aside from a larger buyback unless Icahn thinks (CEO Tim) Cook isn't doing a good job."
And Hudson Square Research adds that Apple's already doing what Icahn wants.
Back in April, Apple bowed to pressure from the likes of activist investor David Einhorn, saying it would give back $100 billion to shareholders by the end of 2015, multiplying its buyback program six-fold.
Icahn's purchase of a roughly $1 billion stake in Apple seems big, but that gives him less than a one percent stake, given the company's nearly $450 billion market valuation.
His interest in Apple seems focused on the stock buyback, not on the slew of new products that investors have long been awaiting. Apple's shares have been rallying the last six weeks on surprisingly strong earnings and hopes of a new iPhone this fall.
And Apple took steps toward possibly creating the much-rumored next-generation Apple TV with the purchase of Matcha.tv. That company tells users where to find the video they're looking for on the Internet. Thanks to his move on Apple, investors now know where to find and track Icahn's next moves: on Twitter.
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