The investment, Icahn's third in Apple in less than a week, boosts
the value of stake in the company to more than $4 billion. It was
announced via his Twitter account as Apple's shares traded down
about 8 percent following its quarterly report late on Monday, which
renewed Wall Street's concerns about the maturing smartphone market.
Icahn told Reuters in a telephone interview that the decline in
Apple shares presented "a great opportunity" to add to his position.
"Apple shares are very cheap. They are going at six to seven times
earning," Icahn said. "It's not like we are holding something that
is trading at 100 times earnings."
Icahn has provided a blow-by-blow account on Twitter of every new
investment he's made in Apple since Wednesday, when he disclosed a
$500 million purchase that took his position to $3 billion. He did
so again on Thursday.
On Tuesday, he tweeted: "Just bought $500 million more $AAPL shares.
My buying seems to be going neck-and-neck with Apple's buyback
program, but hope they win that race."
LOBBYING FOR STOCK BUYBACK
Icahn is waging a public campaign to get Apple to return more cash
to shareholders and has filed a resolution proposing that it give
back $50 billion more through share buybacks.
Apple's management "seems to be doing the right thing in running the
business but this is a financial issue," Icahn told Reuters, arguing
that the company should increase its share buyback program.
Apple, for its part, argues it already has one of the industry's
largest capital-return programs in place. It said on Monday it had
returned $7.7 billion in cash to shareholders through dividends and
share repurchases during the December quarter, bringing cumulative
payments to over $43 billion, out of a total plan to dole out $100
Beyond the share buyback program, Icahn said he believes investors
are underestimating Apple Chief Executive Officer Tim Cook's message
that the company will come out with products in entirely new
categories this year.
[to top of second column]
"I think it will be huger than people think," Icahn said. "They
haven't done this in four years and the last one they did was
something called the iPad. And let's not forget that Apple has a
huge cult following."
After Icahn's tweet, Apple shares were still down roughly 7.65
percent at $508.55 a share.
At least 14 brokerages lowered their price targets on Apple
following Monday's results report, reflecting concerns that it was
becoming harder to sell high-end phones as markets get saturated.
While Apple sold a record 51 million iPhones in the quarter ended
December 28, that fell short of the 55 million expected by Wall
Analysts on Tuesday attributed some of this shortfall to the pricing
of the iPhone 5C. Apple's low-cost alternative to its iPhone 5S was
unable to grab market share from cheaper rivals using Google Inc's
GOOG.O Android software, they said.
(Reporting by Jennifer Ablan in New York
and Edwin Chan in San Francisco; editing by Cynthia Osterman)
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