Shane Cole
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.
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 — Â 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.
$GOOG @ 19x2014 est operating profit. At same multiple $AAPL=$1,245 per share. Ridiculous. Keep buying Tim! You still have $145 billion cash
— Carl Icahn (@Carl_C_Icahn) February 7, 2014Icahn'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, 2014AAPL shares were up $8.17, or 1.59%, to $520.68 as of 3:00 pm Friday.
AppleInsider Staff
Malcolm Owen
Oliver Haslam
Andrew O'Hara
Wesley Hilliard
William Gallagher
Christine McKee
48 Comments
I'm really getting sick of this Icahn media-whore/market-manipulator/hudge-fund-charlatan. I think there needs to be some kind of law preventing people like himself who own billions in stocks from talking about stocks he owns on a public forum like Twitter/Facebook/radio/TV. It's the only hope we have for reining in these Wall St. crooks.
iCon needs to go away. For Apple.
I would like to think that since he already has so much money (to the point that it doesn't matter how much) icahn really believes in Apple and isn't interested in making more billions no matter what. But that would be me being stupid. He only wants money to make more money, even if the world burns. I would understand it if he needed it to put food on the table, but guys like these? Trash.
I would like to think that since he already has so much money (to the point that it doesn't matter how much) icahn really believes in Apple and isn't interested in making more billions no matter what.
Naive much?
I'm really getting sick of this Icahn media-whore/market-manipulator/hudge-fund-charlatan. I think there needs to be some kind of law preventing people like himself from talking about stocks he owns on a public forum like Twitter/Facebook/radio/TV. It's the only hope we have for reining in these Wall St. crooks.
The fact that he has money and is not the nicest person in the world does not mean he can't express his opinion?! Perhaps you're more scared (or jealous) of the fact that people might actually be persuaded by him?
It's Cook's job as a CEO to articulate a counter-argument.
(For the record I remain suspicious of his motives, and I don't think that a debt-laden repurchase of the size he's recommending at this price -- or above -- makes much economic sense for Apple.)