The world’s biggest company isn’t big enough for Carl Icahn, American businessman, activist shareholder and investor.
That’s essentially the activist investor’s message to Apple Inc., which had a market capitalization of $603.6 billion at the close of trading last Wednesday. In a letter Oct. 9 to Apple Chief Executive Officer Tim Cook, Icahn made the case for why the Cupertino, California-based company should be trading at $203 a share, about twice the current price, which would boost its valuation to $1.2 trillion.
Icahn is the majority shareholder of Icahn Enterprises, a diversified holding company.
Apple, Icahn said, is on the verge of seeing tremendous revenue growth as it brings out a new product lineup, including larger-screen iPhones, smartwatches and mobile payments. So if the market is undervaluing Apple at the moment, Icahn argued, now is the time for Cook to push for a stock buyback of as much as $100 billion.
“These factors combine to reflect a massive undervaluation of Apple in today’s market, which we believe will not last for long,” Icahn wrote in the letter.
Here’s a rundown of Icahn’s arguments.
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