Oct. 24 - Billionaire investor Carl Icahn wants Apple to boost its buyout and is using his new website to make his case. Bobbi Rebell reports.
It started with a tweet- sending followers to Carl Icahn's new website- and his letter to Apple CEO Tim Cook- imploring him- to use the company's $150 billion in cash to buy company shares. Icahn says he has increased his position in Apple by 22 percent- calling it his firm's most compelling investment. Josh Spencer, who manages the Global Tech Fund at T-Rowe Price- and whose largest position is in Apple- says Icahn is on the right track: SOUNDBITE: JOSH SPENCER, GLOBAL TECH FUND MANAGER, T. ROWE PRICE (ENGLISH) SAYING: "He has identified the fact that Apple does have way too much cash on their balance sheet and at the same time the stock is undervalued. Apple has about $140 billion in cash on hand, they certainly don't need that much for a rainy day, and Tim Cook has said as much, that he thinks the stock is undervalued, they have tremendous free cash flow." And they are probably not alone- Apple shares moved higher on the news. Icahn says he doesn't want a seat on the board- for now. But said on CNBC that he would go to a proxy fight if Apple rejects the buyback. He added that he has no issue with how Tim Cook is running the company. SOUNDBITE: JOSH SPENCER, GLOBAL TECH FUND MANAGER, T. ROWE PRICE (ENGLISH) SAYING: "And that is an important point. He is sticking to his area of expertise. We all know Icahn has proven to be a very savvy investor over the years and I think Tim Cook and the team at Apple have been proven to be very good in their sphere of competence. They make some of the best products on the planet. They have got a wonderful ecosystem and a great degree of consumer loyalty. I think Icahn is not saying hey Apple change what you are doing fundamentally, but add to it. Leverage the balance sheet. Let me help you with what I am good at, and I think Apple should listen to the advice of someone with that experience." And shares of Icahn Enterprises also got a boost- in addition to the money he has made so far on Apple- Icahn recently made a 457 percent profit on shares of Netflix- and still holds a large stake of that company.