Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
VR and Gaming Becomes the Metaverse - 7th Dec 21
How to Read Your Smart Meter - Economy 7, Day and Night Rate Readings SMETS2 EDF - 7th Dec 21
For Profit or for Loss: 4 Tips for Selling ASX Shares - 7th Dec 21
INTEL Bargain Teck Stocks Trading at 15.5% Discount Sale - 7th Dec 21
US Bonds Yield Curve is not currently an inflationist’s friend - 7th Dec 21
Omicron COVID Variant-Possible Strong Stock Market INDU & TRAN Rally - 7th Dec 21
The New Tech That Could Take Tesla To $2 Trillion - 7th Dec 21
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Apple Stock Hits $500 Thanks to Carl Icahn

Companies / Tech Stocks Aug 15, 2013 - 11:32 AM GMT

By: Money_Morning


Diane Alter writes: Apple (Nasdaq: AAPL) stock hit about $500 a share today (Wednesday) - a level not seen since January - and some option traders might want to send Carl Icahn a fruit basket...

You see, Tuesday afternoon, in a single tweet, the legendary 77-year-old activist investor added more than $17.26 billion to Apple's market cap. At 2:21 p.m., pre-tweet, AAPL stock was trading at $475. Following the tweet, shares shot up to $494, before settling the day at $489.57.

Moreover, as Zero Hedge pointed out, holders of Apple $480 August calls saw their contracts soar from a mere $0.20 to a whopping $16, good for an astounding 7,900% profit in just two days.

Ah, the power of Carl Icahn - and Twitter.

How Icahn + Twitter = $500 Apple Stock

Icahn's tweet read: "We currently have a large position in APPLE. We believe the company to be extremely undervalued. Spoke to Tim Cook today. More to come."

What came later was: "Had a nice conversation with Tim Cook today. Discussed my opinion that a larger buyback should be done now. We plan to speak again shortly."

Icahn took a big bite of Apple with a $1.5 billion stake. He believes AAPL stock should be trading much higher and says the iPhone maker should be doing more with its $146.6 billion cash stash. He's pressing the company to buy back shares.

"Apple has the ability to do a $150 billion buyback now by borrowing funds at 3%," Icahn told Reuters. "If Apple does this now and earnings increase at only 10% the stock,-even keeping the same multiple currently-should trade at $700 a share."

Icahn added Apple has "huge borrowing power, little relative debt and trades at a low multiple."

Indeed, Apple stock currently trades at a modest P/E (for a tech company) of 12.39 and has fallen precipitously from its $705.07 peak hit in September.

AAPL Stock a 2013 Target

Billionaire Icahn's sizable investment marks the second time in recent months an activist investor has gone Apple picking...

Earlier this year, David Einhorn, founder of Greenlight Capital Inc., lobbied for Apple to return more money to shareholders through a preferred stock plan.

Apple countered it was taking a prudent approach. However, in April, Apple increased its buyback authorization from $10 billion to $60 billion, marking the largest single share repurchase authorization of any company in history. Apple expects to finish the buyback by the end of 2015.

Icahn: Good or Bad for AAPL?

Icahn has used Twitter before to pressure companies. Other tweets of late have been aimed at Dell Inc. (Nasdaq: DELL), stating his staunch opposition to founder Michael Dell's plan to take the PC maker private.

Richard Sloan, a University of California Berkley business professor, told USA Today Icahn appears to be trying "to use an angle and his ability in the press to get the stock price to move."

Icahn's involvement isn't always good for him, the targeted company or shareholders.

"This is bad for Apple. They don't need any distractions (while trying to) regain their market share lead in phones," analyst Patrick Moorhead told USA Today. "I expect Icahn to run a play similar to Dell, where he is questioning how Apple uses their cash and how they are making decisions."

Apple's next big moment is expected Sept. 10, when it is scheduled to announce new products. In particular, Apple is expected to unveil a significant upgrade to its iPhone which is expected to create a great deal of buzz, as well as a cheaper iPhone targeted at the lower end of the market.

Icahn isn't the only Apple lover in the investing universe. Money Morning Capital Wave Strategist Shah Gilani told us just last week why he would invest in AAPL stock: Two Stocks to Buy Now and One to Avoid.

Source :

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email:

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in