Carl Icahn Calls Off Apple Buyback Fight

Icahn says Apple’s recently increased buyback shows that he and CEO Tim Cook both “agree that our company continues to be extremely undervalued.” Icahn also endorsed Cook’s comments about new product offerings in the works.

Via Robert Galbraith and Chip East / Reutuers

The billionaire investor Carl Icahn said today in an open letter to Apple shareholders that he was ending his months-long campaign to get Apple to buy back more of its shares.

Icahn, who took a smallish stake in Apple over the summer and originally asked for a $150 billion buyback, had submitted a nonbinding proposal to Apple shareholders for a $50 billion buyback near the end of last year. On Sunday, the proxy advisory firm Institutional Shareholders Services recommended that Apple shareholders vote against the proposal at the company’s annual meeting, saying, “The board’s latitude should not be constricted by a shareholder resolution that would micro-manage the company’s capital allocation process.” Icahn said last month he owned over $3 billion in Apple shares.

In today’s letter, Icahn said that he was “disappointed” that ISS recommended against his proposal but that he did “not altogether disagree with their assessment and recommendation” in light of an announcement Apple CEO Tim Cook made on Thursday that the company had bought back $14 billion worth of its stock following what investors saw as a disappointing earnings announcement late in January.

Combined with its preexisting buyback authorization, ISS concluded that Apple was on track to buy back $32 billion worth of stock, which Icahn said in his letter was “close to fulfilling our requested repurchase target.”

Apple’s stock has fallen over 6% so far this year and investors are getting anxious for the company to roll out a new product for the first time since the iPad in 2010. In the same interview where he disclosed the buyback in the Wall Street Journal, Cook said, “There will be new categories. We’re not ready to talk about it, but we’re working on some really great stuff.”

Icahn said that he was “extremely excited about Apple’s future” because of Cook’s comments and that he is “pleased that Tim and the board have exhibited the “opportunistic” and “aggressive” approach to share repurchases.”

“We all share a common optimism with respect to the company’s bright long term future,” Icahn said.

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