Ondrej Holzman Only one day after the investor Carl Icahn announced that he had invested half a billion dollars in Apple stock, on Twitter he boasted, that he bought more shares of the Californian company, and again for 500 million dollars. In total, Icahn has already invested $3,6 billion in Apple, which means he owns almost 1% of all shares in the company.
In addition to another giant purchase, Icahn once again needed to comment on his big plan for Apple to increase the volume of share buybacks. Last week he promised to comment on everything in a more comprehensive letter, and he did so shortly after. IN a seven-page document persuades shareholders to vote in favor of his proposal.
It is about draft from December, the main point of which is a fundamental increase in funds for share buybacks. For months now, Icahn has been theorizing that this is exactly what Apple should do to increase the value of its stock. Apple already responded to Icahn's proposal in December, clearly telling investors that it does not recommend that they vote for this proposal.
Therefore, Icahn is now turning to shareholders with his recommendation as well. According to him, Apple's board of directors, which Icahn criticizes, should act in favor of investors and support the proposal for a larger share buyback. From its current price of around $550 per share, Apple could gain a lot if its P/E ratio (the ratio between the market price of a share and its net earnings per share) is the same as the average P/E ratio of the S&P 500 index to $840.
Icahn's activity comes just ahead of Apple's expected announcement of financial results for the first fiscal quarter of 2014, which will take place this evening. Apple is expected to report its strongest quarter ever. Carl Icahn, however, will probably continue to put pressure on the company and will hold on to the meeting of shareholders where his proposal should be voted on.
