Recently Larry Ellison said that he does not have very high hopes about Apple with Steve Jobs not being there but the billionaire investor Carl Icahn has different opinion.
He tweeted yesterday that he has made a huge investment in Apple. “We believe the company to be extremely undervalued,” the tweet said. There are various reports suggesting that he has invested as high as $1 billion in Apple shares. It is not an exceptional amount in comparison with the current market capitalization of Apple which is $444 billion and this investment is even less than one percent.
But the effect of investment by Carl Icahn is profound to say the least. It sends a clear signals to the new investors that the future of Apple is safe and bright.
After Icahn’s Tweet, the stock price of Apple rose by $4.75 percent which meant addition of another $17.1 billion to the market capitalization of Apple.
He believes that the current stock price of $490 is at a seven month low and it will rise to a level far greater than this. He disclosed to Wall Street Journal that in his opinion the stock price should be at around $625. He also predicted to Reuters that he sees the future stock price of Apple to be at $700 per share if he can manage to convince Apple’s management to buy back $150 billion worth of stock which will increase earnings of Apple share by 10 percent.