Carl Icahn Raises Stake in Apple and Presses for Better Shareholder Returns
Published on: 23rd Jan 2014
By: Ian Mansfield
Activist shareholder Carl Icahn has raised his stake in Apple to over USD3 billion as he piles pressure on the company to do more with its huge cash reserves.
He started building up a stake last year and has a long track record of buying small stakes in firms then using that to build up an alliance of shareholders to press for change in companies.
Apple's capitalization stands at around USD492 billion though, so his $3 billion stake is barely a rounding error in the company's shareholders.
He has now raised his stake in Apple with the purchase of a further US$500 million worth of shares, he revealed via his Twitter account.
He has held meetings with Apple's CEO, Tim Cook since he started building up his stake in the firm and wants Apple to do more to return its cash to the shareholders who ultimately own the company.
He has suggested in recent months that Apple could easily fund a US$150 billion return to shareholders by raising debt. Raising debt would be cheaper than tapping into the cash reserves, as much of them are held outside the USA and repatriating them would result in a tax bill higher than the interest on the debt.
Apple has previously approved a scheme to return USD100 billion to shareholders, but that is over three years, and based on past performance, could be less than the company generates, so its cash pile would actually rise over that time frame.
He also confirmed in an interview on CNBC that he will keep raising his stake in the company if needed.
"What annoys me is that you still have this imperial board concept - that they know what's better for you than you do," he told CNBC.