Billionaire activist investor Carl Icahn says Apple stock should be as high as $203, and that the company's board should use their $133b cash pile to buy back shares. Bobbi Rebell reports.
More is more, and the sooner the better, when it comes to Apple share buybacks according to billionaire activist Carl Icahn. He just wrote a "Dear Tim" letter - as in Apple CEO Tim Cook- saying the company should be a bigger spender when it comes to share buybacks- given that it does have a cool $133 billion dollar cash reserve. The last time he asked for a buyback - he did eventually get his way - In April Apple said it would buy back $30 billion dollars of stock. Icahn says Apple stock is way undervalued - right now its around $100 a share - he says it should be about double that - at $203. The stock had a muted reaction to the letter. JMP Securities Alex Gauna: SOUNDBITE: ALEX GAUNA, MANAGING DIRECTOR, TECHNOLOGY RESEARCH, JMP SECURITIES (ENGLISH) SAYING: " I really don't think there is any rationale expectation at this juncture for Apple to grow at the kind of rates that are outlined in this open letter. I really don't think Icahn has done any favors for Apple shareholders today. It creates like I said a sideshow that just distracting." Gauna adds that Apple should be making its own decisions on how to deploy its cash - and using it to to buy companies would also be good for shareholders. Icahn praised Tim Cook and the company's management in the letter - saying Apple is poised to take market share from Google's Android platform - and says the earnings will grow 44 percent in their 2015 fiscal year. But Gauna says Apple isn't as visionary as it once was: "The iPhone 6 and 6 plus are great new models. they should have been here a year earlier. They left that market wide open for Samsung for too long and are only now just closing the door. The Apple watch is going to miss the holiday season. Apple TV has languished for years without going anywhere. So the execution could actually be better at Apple." Apple sent a letter to CNBC responding to Icahn - saying they always appreciate hearing from their shareholders - and that, as they have said before, they will review the buyback program annually.