Investor and activist Carl Icahn is increasing pressure on Apple once again and has announced that he has invested $500 million in Apple shares.
This new update comes on the heels of an earlier announced by Icahn a day before that he had purchased $500 million worth shares of Apple in recent months. Icahn now says that he has recently bought around $1 billion worth of Apple stock in recent two weeks.
He has also issued a letter to the shareholders in which he has explained the logic behind his move for asking Apple to buyback its shares with the spare cash it has. He wrote
“Over the course of my long career as an investor and as Chairman of Icahn Enterprises, our best performing investments result from opportunities that we like to call ‘no brainers. Recent examples of such ‘no brainers” have been our investments in Netflix, Hain Celestial, Chesapeake, Forest Labs and Herbalife, just to name a few. In our opinion, a great example of a ‘no brainer’ in today’s market is Apple.”
Icahn further says that Apple has recommended to shareholders to vote against his proposal by saying that it requires the cash reserves to invest in acquisitions and in research to remain competitive in the market. Icahn responds to this:
“We believe that the combination of the company’s unprecedentedly enormous net cash balance, robust annual earnings, and tremendous borrowing capacity provide more than enough excess liquidity to afford both the use of cash for any necessary ongoing business-related investments in addition to the cash used for the increased share repurchases proposed.”