Carl Icahn demanded that Apple commencebuying back $US150 billion worth of stock immediately at $US525, this afternoon he was on CNBC’s Halftime Report talking about his letter to Apple CEO Tim Cook.
Icahn told host Scott Wapner that he thinks Apple’s stock would still be attractive at $US550 or $US575, but he hasn’t run the numbers for that.
“The obvious thing would be for the company to use its $US150 billion to buy the stock back… you don’t keep $US150 billion around,” he said.
He also reiterated the fact that Apple should be borrowing right now, and that he plans to (but will not guarantee that) he’ll buy more stock.
The board, as Icahn’s said before, is not doing their job while management is fine.
In his letter to Cook, Icahn did address the fact that this buy back would be huge — historic. So Scott Wapner addressed that.
Icahn’s response: It’s all relative and a company of Apple’s size can handle it.
For now, he said he’s judging how shareholders feel. Some have expressed support for the buy back, and if the time comes he’ll gauge their sentiment for a proxy fight.
“I don’t know what it means one of the most valuable companies on the planet. Tsarist Russia was one of the biggest countries on the planet and looked how people lived there… maybe that’s not a great analogy,” he said, again blaming the board’s negligence for his desire to act.
“We’ve done well because we’ve gotten boards to change things… This board is not above reproach.”
Wapner then asked him: “Do you think you could win a proxy fight?”
Icahn responded “… we’ll test the waters… we’ve said we’re not going away.”
He also added that he’s tired of hearing from everyone about “what Steve Jobs would’ve done… it’s ludicrous!,” said. “He [Jobs] may have been a businessman but he wasn’t a finance guy.”
Now on to that tweet from Bill Gross this morning, slamming Icahn and saying he should help people.
“Bill Gross certainly has a right to his opinion…” said Icahn.
Wapner broke in that Warren Buffett has been supportive of Apple’s board as well.
To that Icahn replied that “Theodore Roosevelt took on the monopolies… the whole establishment. If you listen to history, and you listen to the establishment and what they say, we would have a lot of problems… The fact that these men say that, I have to say that respect everyone you just mentioned, but I don’t think they’re right.”
He added that the reason this country has problems with entitlements and more is because companies are not run properly.
Wapner then circled back to Apple pointing out that shareholders are already getting paid — so shouldn’t the company work on great products?
“It’s ludicrous,” said Icahn, “for a company like Apple to say they need $US150 billion sitting in a bank in Europe to do innovation… It’s absurd to say Apple would have to use $US150 billion for something.”
On his new website, Shareholder’s Square Table, Icahn said: “Some men have died fighting tyranny, the least we could do is vote against it.”
Now onto Netflix: Wapner asked Icahn if he was worried about CEO Reed Hastings saying that momentum investors were driving up the stock. Was that what drove him to cut his stake in half this month?
In short, Icahn said no.
“It’s sort of an Icahn rule, when you make 5x your money, it doesn’t mean you’re not a long termer… you take some chips off the table… The model of Netflix is an excellent one and it’s very hard to compete. When David and Brett brought it to me it took me 20 minutes to say, this is going to be one of greats of all time.”
He also said Brett (his son) and David (Brett’s investing partner) love Apple.
Toward the end of the interview, Wapner touched on Herbalife. Things have changed with the stock, he said, since Ackman restructured his position. The story’s over, no?
Icahn said “I’m not going to get into a personal thing with Ackman. That’s over… I read the report (Ackman’s) in 3-4 hours… You read that report, you realise what hogwash it was… All you had to do was call an SEC lawyer who looked at it and said… ‘this was complete nonsense…”
To close, Icahn said Tim Cook will call him after Apple earnings on the 28th to set up another meeting, “I hope that will happen.”