Apple's Stock Surges on News of Icahn’s Investment

Apple's (NASDAQ: AAPL  ) shares surged nearly 5% today after billionaire activist investor Carl Icahn said on Twitter that he has taken a "large" position in Apple and that he believes it to be "extremely undervalued." The Wall Street Journal places the size of Icahn's position at $1 billion .

Icahn is known for buying large stakes in companies and then pushing for changes to corporate strategy and even management dismissals. He has made headlines in recent months for his involvement in a takeover attempt of Dell (UNKNOWN: DELL.DL  ) . Dell's CEO and founder, Michael Dell, who is also trying to take the company private, has fiercely contested that move.

Icahn has also been in the news for battling with rival activist investor Bill Ackman over Herbalife (NYSE: HLF  ) , a network marketing and nutritional products company. Ackman built a large short position in Herbalife's stock, while Icahn took an opposing long position.

And Icahn famously made $1 billion on his position in Netflix (NASDAQ: NFLX  ) , originally taking an activist role but then backing off and deferring to the Internet streaming company's management, as the stock surged from his purchase price near $58 to well over $200.

But it's doubtful that Icahn will be able to obtain a large enough stake in Apple that would allow him to successfully agitate for changes to Apple's management structure or corporate strategy, mainly because of Apple's massive market capitalization of more than $440 billion. Still, Icahn has said that he has spoken with Apple CEO Tim Cook in regard to boosting the tech titan's share buyback, which is already the largest single share repurchase authorization of any company in history.

Apple's shares closed up more than $22 on the day and have risen more than 25% from their lows of the year. But for Apple's stock to continue to soar, a few critical things need to fall into place. In The Motley Fool's special free report titled "5 Secrets to Apple's Future," our analysts outline the key factors every Apple investor needs to watch. Just click here now for your free report.


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  • Report this Comment On August 14, 2013, at 2:20 AM, fauxscot wrote:

    Go longer, Carl. I appreciate 5% per day returns back to 700 and beyond. Fact is, I'd buy a billion bux of it, too if my extensive holdings weren't tied up in beagle food and heating oil in prep for a long winter!

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