Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Will Tim Cook Make Carl Icahn's Apple Dreams Come True?

Yesterday, Carl Icahn, the ostentatious billionaire, released an open letter to Apple (NASDAQ: AAPL  ) CEO Tim Cook. While the letter was full of praise, it outlined Mr. Icahn's desire for a massive buyback to the tune of $150 billion for Apple.

Carl Icahn believes Apple's current pricing is an "anomaly" and should take advantage of this and the current low-rate environment to provide value to existing shareholders. Carl Icahn even mentions an audacious share price if Apple chose to pursue his strategy. 

Apple hasn't responded, but does Carl Icahn have a point here? Apple has a great credit rating and its prior debt issuance was met with voracious demand. Plus, since the cost of debt is lower than Apple's equity costs, it lowers Apple's weighted average cost of capital. However, there are risks associated with taking Carl Icahn's advice.

In this segment of Tech Teardown, Erin Kennedy discusses Carl Icahn's offer to Apple with Jamal Carnette and Evan Niu, CFA.

Watch the video, read the report, and become a serious Apple investor
Apple has a history of cranking out revolutionary products... and then creatively destroying them with something better. Read about the future of Apple in the free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2699774, ~/Articles/ArticleHandler.aspx, 9/26/2016 8:38:01 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,094.83 -166.62 -0.91%
S&P 500 2,146.10 -18.59 -0.86%
NASD 5,257.49 -48.26 -0.91%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/26/2016 4:00 PM
AAPL $112.88 Up +0.17 +0.15%
Apple CAPS Rating: ****