Icahn blasts Apple again, raises investment to $3 bn

Says company was doing shareholders 'disservice' by failing to boost its share buyback program

Activist investor Carl Icahn lashed out against Apple Inc again on Wednesday, and tweeted that he had bought $500 million more shares in the company in just the past two weeks, bringing his investment in the iPhone maker to over $3 billion.

The billionaire, who has repeatedly urged Apple to return more cash to shareholders, told CNBC later in an interview he intends to buy more stock at some point in "one of the greatest no-brainers of all time."

Icahn, known for decades of strong-arm tactics including proxy fights against major corporations, said on Twitter that the company was doing shareholders a "great disservice" by failing to boost its share buyback program.

Shares of the world's largest technology company were up 0.5% at $552.09 in afternoon trading, after earlier climbing as much as 1.5%.

Icahn has repeatedly made it clear that he does not oppose Apple's management. But neither is he going to walk away from his investment, he told Reuters in November.

On Wednesday, he promised an in-depth letter in a day or two, that will lay out his arguments to investors. And he said he will continue to try to drum up support from fellow shareholders for his buyback proposal.

"What bothers me a hell of a lot..., is cash of a $150 bln just sitting there doing nothing. And not to use it to do a huge buyback, is sort of disgraceful," Icahn said on CNBC.

"As far as I'm concerned, I'm actually better off with them doing nothing," he said. "I intend to buy (more) stock."

Icahn now holds likely less than 1% of the company, but the billionaire has chalked up solid investment gains in the past months.

Apple's stock has surged 17% since Icahn first disclosed a significant stake in the company on August 13. An additional $500 million investment would translate into roughly 900,000 shares at current levels.

It was unclear when or how much stock the activist investor, who in August began trying to get Apple CEO Tim Cook to agree to a $150 billion buyback, most recently added to his portfolio. In a letter to Cook made public on October 24, Icahn said he had increased his stake to 4.7 million shares.

In December, Icahn filed a shareholder proposal with Apple for a much smaller additional stock buyback plan of $50 billion, a major step back from previous demands. Icahn said on Wednesday that reduction came after discussions with unidentified major shareholders of the company, without elaborating.

"We feel (Apple's) board is doing great disservice to shareholders by not having markedly increased its buyback. In-depth letter to follow soon," Icahn said on Twitter earlier.

"Since tweeting about our large position in $AAPL on Aug 13, when the stock was 468 per share, we've kept buying shares of this 'no brainer,'" Icahn added on his public profile.

DEEP POCKETS

Apple declined to comment on Wednesday but referred investors to its December proxy statement.

Since taking over from the late Steve Jobs, Cook has been generally perceived as steering Apple in a more investor-friendly direction. But Icahn argues that Apple can afford to share much of its cash pile of more than $146 billion, which in turn would have the effect of taking the stock sharply higher.

Apple is in the midst of returning $100 billion to shareholders, including a total share repurchase program of $60 billion.

The company advised shareholders in its proxy statement last month to vote down Icahn's proposal, arguing it had already returned $43 billion in dividends and repurchases under its capital return program.

Apple also warned at the time that it needed ready access to cash in a fast-evolving and competitive mobile devices industry.

The company is coming under heavy pressure from Samsung Electronics <005930.KS> and Amazon.com Inc in the smartphone and tablet arena.

"We're going to continue to buy it," Icahn said. "If we lose, we lose, from a financial point of view it might be better for a lot of shareholders if they don't do this."