Carl Icahn Drops Demand for Apple to Return More Money to Shareholders
Published on: 11th Feb 2014
By: Ian Mansfield
Activist investor Carl Icahn has abandoned his attempt to force Apple to return more of its cash pile to its shareholders after an influential advisory service recommended against it.
The shareholder advisory service, ISS issued a statement recommending that shareholders vote against the Icahn proposal. ISS recommendations are often followed by smaller shareholders.
However, in an open letter, Carl Icahan added that in "light of recent actions taken by the company to aggressively repurchase shares in the market," he would not entirely disagree with ISS's recommendations, although he was disappointed by them.
The ISS did note that Apple "appears to have been sluggish only in returning excess cash to shareholders,"
They added that considering Apple's considerable profits, while the company has stepped up efforts to return cash to shareholders, the effort seems "like bailing with a leaky bucket" when "given the scale of the company's cash reserves."
Apple has commitments to buy back USD32 billion worth of its own shares this year, and the Icahn proposal would have been just USD18 billion more.
However, Icahn's actions do seem to have stirred the company into action, as in the past couple of weeks Apple has bought back USD14 billion worth of shares.
Icahn added an extra comment that is more interesting about Apple's future though -- as he confirmed that the company will be launching a range of new products in its existing categories and will be moving into new markets this year.
That adds support to expectation that Apple will launch more variants of its iPhone handset, and could finally launch the long-expected smart watch.