Feeds

Peak Apple? HOGWASH! Apple is 'extremely undervalued,' says Icahn

Billionaire has already snapped up a $1bn stake

Build a business case: developing custom apps

Ever one to keep multiple irons in the fire, corporate raider activist investor Carl Icahn has announced via Twitter that he has taken a major position in Apple, a stock he says he considers "extremely undervalued."

Bloomberg reports that the billionaire's share of the fruity firm amounts to more than $1bn, which sources claim he has amassed in just the last month.

Apple stock is currently trading at around $490 per share – the highest it's been since January – but Icahn said he believed it could go up even further, to around $600.

To help facilitate that, Icahn said he believed Apple should expand the share buyback program it announced in April and that it should start returning money to shareholders immediately.

Shortly after announcing his stake in the firm, Icahn tweeted that he had already had a discussion with Apple CEO Tim Cook about the idea – which Apple later confirmed – and, somewhat ominously, that he had every intention of continuing those talks.

The move is a typical one for Icahn, who specializes in snatching up stakes in companies that have fallen out of favor and then pressuring their executives to turn on the cash faucets.

Most recently, he has been embroiled in a battle with Michael Dell over control of his namesake computer maker. Big Mike has floated a $24.9bn leveraged buyout plan that would see Dell go private, while Icahn would prefer to keep the company public and do a leveraged recapitalization that would include – naturally – paying shareholders a "significant" one-time dividend.

While it's in nowhere near as bad shape as Dell, Apple's shares have been sliding into the doldrums since the death of its adulated cofounder, Steve Jobs. Its stock price has shed around 22 per cent in the past year.

Investors worry that without Jobs as the driving force behind Apple, it could slip back into a fallow period like it did from 1986 to 1997, when Jobs was in exile. The company is widely expected to announce a new iPhone (or two) on September 10, but most rumors predict few radical changes from the last round, and critics including Oracle's Larry Ellison wonder whether Apple still has the creative spark to deliver another big market win.

But where fanbois see grey clouds ahead, Carl Icahn sees opportunity. Though $1bn is, admittedly, a lotta dough, that sum gives him less than a 1 per cent share of the company, which currently has a market capitalization of $444.8bn. Yet just the mere fact that it's Icahn who bought the shares is enough to make waves on Wall Street, which saw Apple's stock price shoot up 4.8 per cent on the news. ®

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.