Icahn invests in 'undervalued' Apple

Written By Unknown on Rabu, 14 Agustus 2013 | 20.24

13 August 2013 Last updated at 19:43 ET

Billionaire investor Carl Icahn says he has built up a "large" stake in Apple.

Mr Icahn says Apple shares are "extremely undervalued" and wants Apple to carry out a bigger share buyback.

In April, Apple said it would return $100bn (£65bn) to shareholders by the end of 2015, by raising its dividend and buying back shares.

Mr Icahn said he had a "nice" conversation with Apple's chief executive Tim Cook and plans to speak to him again shortly.

In response Apple said in a statement: "We appreciate the interest and investment of all our shareholders.

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Mr Icahn's investment in Apple is a vote of confidence in chief executive Tim Cook, and underscores a belief that the tech giant will return to the dizzy heights it enjoyed under Steve Jobs.

But his investment is not without significant risk. Recently the company has faced accusations of failing to innovate and being overpriced in the face of stiff competition - notably from the Korean consumer electronics giant Samsung in hardware, and from Google's Android, which now commands a dominant lead in smartphone operating systems.

The billionaire is betting that the next hardware and software cycle will prove Apple's reversal of fortunes to be temporary. But it is clear that Apple after Steve Jobs has lost some of its mystique for consumers - and regaining mind share is no mean feat.

"Tim had a very positive conversation with Mr Icahn today."

A US media report said that Mr Icahn's stake is worth well over $1bn, making it one of his biggest shareholdings.

Since hitting a record of $702 in September 2012, Apple shares have fallen 30%.

The announcement helped to boost those shares, and they closed up 4.75% at $489.57.

In an interview with Reuters Mr Icahn said the shares could reach $700 again, if Apple carries out a $150bn share buyback.

Activist investor

Mr Icahn is known for his aggressive investment style, which involves taking large stakes in firms and pushing managers to change direction.

He is currently involved in a high profile battle to prevent Michael Dell buying back the company he founded.

Mr Icahn claims his plan offers better value for Dell shareholders.

Not all of Mr Icahn's investments become confrontational.

He owns a 10% stake in the internet video service, Netflix and has been happy with the company's performance.


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