Apple share price: Icahn abandons buyback push after ISS recommendation

on Feb 11, 2014
Updated: Apr 9, 2020
Listen, Tuesday, February 11: Activist investor Carl Icahn has abandoned his quest to convince Apple share price: ISS backs the company against Icahn buyback proposal).

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Icahn issued yesterday an open letter to Apple stockholders informing them of his decision to end his campaign for an additional $50 billion share buyback. He expressed his disappointment that ISS had recommended the rejection of his proposal but said that he didn’t altogether disagree with the agency’s assessment and recommendation in light of recent Apple share buybacks.

In yesterday’s trading, Apple closed up 1.79 percent at $528.99.
**Backing off**
Icahn said in his letter that he agreed with ISS’s assessment that Apple’s recent share repurchases seemed “like bailing with a leaky bucket”, given the scale of the company’s cash reserves. Still, they were enough to make him abandon his campaign.
In an interview with The Wall Street Journal last week, Apple CEO Tim Cook revealed that the company had bought some $14 billion worth of its own shares since its Q1 report on January 27. With the latest buyback, Apple had retired more than $40 billion of its share capital over the past year which, according to Cook, was more than any other company over a similar period (Apple share price: Company buys back $14 billion of shares following Q1 report).

Icahn saw a small victory in those repurchases, pointing to ISS’ assessment that “for fiscal 2014, [Apple] appears on track to repurchase at least $32 billion in shares,” some $18 billion less than what the activist investor had been calling for.
“In light of these actions, and ISS’s recommendation, we see no reason to persist with our non-binding proposal, especially when the company is already so close to fulfilling our requested repurchase target,” Icahn wrote in the circular letter.

Some analysts agree that Icahn’s efforts haven’t been in vain. Reuters quoted Antony Filippo, a Toronto-based independent investment manager, as saying: “It looks like Icahn’s crusade paid off. Apple’s board and Icahn are meeting halfway.”
He added that the billionaire investor “wanted to spawn change and he got a little bit of that. Apple buying $14 billion around the $500 mark is huge. They would have never done that without an activist breathing down their neck.”

**Optimistic about Apple**
Icahn also said yesterday that he is “extremely excited” about Apple’s future, pointing to Cook’s promises for new products this year. Though not going into specifics, the Apple CEO told the WSJ that anyone “reasonable” would see the company‘s current pipeline as new product categories.
For years, analysts and investors have been calling on Apple to tap into new markets and exploit growth in new technologies. The first iPad, introduced in 2010, is the most recent entirely new Apple product.
**As of yesterday’s US close buy Apple shares at $528.99**
**As of yesterday’s US close sell Apple shares at $528.99**
Trade stocks with Hargreaves Lansdown from £5.95 per deal.
Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.


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