Icahn urges ‘undervalued’ Apple to buy back more shares

NEW YORK: Billionaire activist investor Carl Icahn said Apple Inc’s shares could double in value and urged the company’s board to buy back more shares using its $133 billion cash pile.
“We believe Apple is dramatically undervalued in today’s market, and the more shares repurchased now, the more each remaining shareholder will benefit,” Icahn said in a letter to Apple’s board.
Icahn, who pledged to keep his own stock out of any repurchase, said Apple stock should be trading at $203.
“At today’s price, Apple is one of the best investments we have ever seen from a risk reward perspective, and the size of our position is a testament to this. This investment represents the largest position in our investment history,” Icahn wrote.
Apple shares rose less than 1 percent in early trading to $101.49, having gained 27 percent since January.
Owning 53 million shares, Icahn ranks as one of the iPhone maker’s top 10 investors and has long urged the company to buy back more shares and raise its dividend.
In his letter he said he expects the Apple Watch, the company’s first new product category since the iPad in 2010, to boost the company’s growth. He added that television represents a large opportunity for the company.
Icahn, 78, ranks among the world’s most vocal and influential investors and he has successfully pushed for change at auto rental company Hertz and e-commerce company eBay.
He has taken pains to keep his comments about Apple civil and praised Chief Executive Officer Tim Cook in his letter.
“We could not be more supportive of you and your team, and of the excellent work being done at Apple, a company that continues to change the world through technological innovation,” Icahn said.
Although Icahn has run his fair share of proxy contests and sat on many boards, he had previously backed off from his campaign urging Apple to increase buybacks. .
Apple has long signaled that it will not be pressured into making hasty decisions. On Thursday, spokeswoman Kristin Huguet declined to comment directly on Icahn’s letter but said “We always appreciate hearing from our shareholders.”