Last week, headlines circulated that activist investor Carl Icahn had cut his stake in Apple (AAPL 0.86%) by quite a bit. According to SEC filings, Icahn sold off 7 million shares of the Mac maker, bringing his position down to 45.8 million shares.

Over the past couple of years, Icahn has been one of the most vocal and high-profile investors to support Apple. What gives?

There were two critical flaws in Icahn's analysis
The billionaire made plenty of waves when he first proclaimed that Apple was essentially selling at "half price" a couple years ago. At the time, he assigned a current valuation of $203 per share. He followed up a few months later with a $240 per share valuation. These valuations were not 12-month price targets. Rather, they were what Icahn believed Apple was worth at the time.

But the problem with these estimates were that they essentially assigned a market multiple to Apple, assuming that investors would realize that Apple shouldn't trade at a substantial discount to the S&P 500 and the market would correct this inefficiency. It hasn't.

More important, it doesn't appear that the market is willing to assign a higher valuation to Apple in the short term. If this persists, as it has for years, Apple's bargain discount actually isn't an opportunity for investors.

On top of that, Icahn and his team were modeling for Apple to launch a full-blown TV set in the near term. They even went as far as to predict that this business would grow to $37.5 billion in revenue by fiscal 2017. That projection also included 12 million TV sets in fiscal 2016. Well, Apple just kicked off its fiscal 2016 and there's still no indication that it will ever actually launch a TV set. Furthermore, numerous leaks have suggested that Apple officially killed its TV set project.

Perhaps it was these two flaws in his analysis that culminated in the decision to trim his stake.

Or maybe this is a macro move
Alternatively, it's possible that Icahn is simply reducing his exposure to equities. Throughout 2015, he expressed his belief on several occasions that the market was overvalued and even tossed around the dreaded "bubble" phrase a couple of times. Icahn also warned of a "dramatic pullback" last summer as well, for instance. The activist also warned that the ongoing low interest rate environment would have dire consequences as well, saying the Fed may not "understand the treacherous path they are going down."

These are all potentially contributing factors to why Icahn may have sold off a meaningful portion of his Apple position. However, Icahn's long exposure to U.S. equities increased during the quarter in dollar terms. Maybe it was a sector rotation, as the tech sector tends to take it hardest during market downturns due to a large number of high-multiple stocks?

At the end of the day, it's tough to figure out why Icahn would sell a stock that he's touted so aggressively for years. To be clear, Apple remains a very large portion of his overall portfolio, so it's also possible that Icahn was simply diversifying for diversification's sake, which is never a bad idea.