Yesterday, after billionaire activist investor Carl Icahn appeared on CNBC for almost an hour to discuss his proposal that Apple CEO Tim Cook should initiate a $US150 billion share buyback, Miller Tabak chief economic strategist Andrew Wilkinson pointed out in his “chart of the day” that Icahn is not even a top-2o shareholder of Apple.
In today’s chart, Wilkinson points out that Icahn’s tweets aren’t moving the market like they used to.
Wilkinson explains in a note to clients:
Icahn Tweets Prove Less Pull — Carl Icahn seems to like taking to Twitter at 2:15pm apparently, which makes it that little bit easier to compile our chart of the day. It measures the impact of Mr. Icahn’s tweets on Apple’s share price on August 13 as he announced his purchase of the stock and compares it to the October 23 Tweet when he announced his letter to the company arguing in favour of a share repurchase.
Each bubble represents the volume traded during 10-minute periods following the Tweets. The larger the bubble the greater is the volume traded. Each series measures the percentage change in Apple’s share price through the close the following day.
Mr. Icahn’s August announcement of his stake in Apple riveted tech-hopefuls driving shares 6% higher on heavy volume. Throughout the remaining two hours of trading and until the close the following day, 45 million Apple shares traded closing 4.57% higher.
But this week’s latest Tweet was far less successful in driving Apple ahead. While shares closed 1.76% higher following the Tweet by Thursday’s close, the announcement generated far less buzz amongst investors. Overall volume over the comparable period since Wednesday’s Tweet is just 15 million shares and is therefore just one-third of the August total.
Here’s Icahn’s first tweet:
Just sent a letter to Tim Cook. Full letter will be disclosed on my website, the Shareholders’ Square Table, which will be launched tomorrow
— Carl Icahn (@Carl_C_Icahn) October 23, 2013
And here’s the second tweet:
We currently have a large position in APPLE. We believe the company to be extremely undervalued. Spoke to Tim Cook today. More to come.
— Carl Icahn (@Carl_C_Icahn) August 13, 2013