Michal Marek Billionaire and investor Carl Icahn has published his letter to Tim Cook on the web, in which he once again urges Apple's CEO to start a massive buyback of its shares. In the letter, he points to his own importance, stating that he already owns $2,5 billion worth of Apple stock. So it means that Icahn since the last meeting with Tim Cook, which took place at the end of last month, he strengthened his position in the company by a full 20%.
Icahn has been appealing to both Apple and Tim Cook for a long time so that the company radically increases the volume of stock buybacks and thus raises their value. He believes that the company is undervalued on the stock market. According to Icahn, in the event of a reduction in the volume of shares in free circulation, their true value would finally show. Their availability on the market would decrease and investors would have to fight harder for their profit.
When we met, you agreed with me that the stock was undervalued. In our opinion, such an unfounded decline is often just a temporary anomaly of the market, and such an opportunity must therefore be taken advantage of, because it will not last forever. Apple does buy back its shares, but not nearly as much as needed. A $60 billion share buyback over the past 3 years looks pretty respectable on paper, but given Apple's $147 billion fortune, it's not enough. Additionally, Wall Street predicts that Apple will generate an additional $51 billion in operating profit over the next year.
Although such a buyout seems completely unprecedented due to its size, it is actually an appropriate solution to the current situation. Given the size and financial strength of your company, there is nothing objectionable about this solution. Apple has huge profits as well as considerable cash. As I suggested at our dinner, if the company decided to borrow the entire $150 billion at 3% interest to start a share buyback at $525 apiece, the result would be an immediate 33% increase in earnings per share. If my proposed buyback goes through, we expect the price per share to rise to $1 in as little as three years.
At the end of the letter, Icahn states that he himself would not abuse the purchase by Apple for his own purposes. He cares about the long-term welfare of the company and the growth of the shares he bought. He is not interested in getting rid of them and has unlimited faith in their potential.
He certainly wouldn't abuse it. See his Twitter bio.