Friday, February 07, 2014, 12:31 pm PT (03:31 pm ET)
Apple stock jumps after buyback announcement, Icahn says "Keep buying, Tim!"Apple shares are trading up nearly $10 after CEO Tim Cook revealed the company's recent $14 billion buyback and hinted at an entry into new markets, though Wall Street's reaction was not good enough for activist investor Carl Icahn.
Apple CEO Tim Cook during an interview at the D11 conference.
Icahn took to Twitter on Friday to chide his Wall Street neighbors, saying that Apple's current share price was "ridiculous" when compared with that of fellow Silicon Valley titan Google. Google is trading at roughly 19 times its estimated operating profit in 2014 — a similar multiple for Apple would price its shares well over $1,200.
The billionaire added that Wall Street is "apparently still not listening" to Apple chief Tim Cook's repeated pronouncements that the company is on the verge of taking on new markets, such as wearables with the widely-rumored "iWatch." Some analysts believe a product like the iWatch could add as much as $17 billion per year to Apple's coffers.
Icahn's missives come less than one day after Cook gave a wide-ranging interview to the Wall Street Journal in which he said Apple had made an "aggressive" and "opportunistic" move to repurchase $14 billion worth of its shares after its stock falterd following weaker-than-expected, but still record-breaking, earnings in the holiday quarter.
"It means that we are betting on Apple. It means that we are really confident on what we are doing and what we plan to do," Cook said in the interview. "We're not just saying that. We're showing that with our actions."
Cook also intimated that Apple would soon make good on promises of product line expansion. "There will be new categories," he said. "We're not ready to talk about it, but we're working on some really great stuff."
Tim Cook again confirms $AAPL will launch new products in new categories (plural) this year. Wall Street apparently still not listening.— Carl Icahn (@Carl_C_Icahn) February 7, 2014
AAPL shares were up $8.17, or 1.59%, to $520.68 as of 3:00 pm Friday.
On Topic: Investor
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