Carl Icahn is one of the leading investors in Apple’s stock, thus holding certain power in swaying the company’s stock-related decisions. Icahn has now called upon Apple to increase its buyback program, a suggestion he has repeatedly made in the past too.
This Wednesday, Icahn tweeted from his personal account, “Gave $AAPL notice we’ll be making a precatory proposal to call for vote to increase buyback program, although not at $150 billion level.” The precatory proposal will apparently be submitted at the next annual meeting of the company’s shareholders.
Icahn wants Apple to spend more cash in buying back its own stock, a move which will inevitably drive up the price of the company’s shares. This, in turn, would also drive up the fortunes of Icahn and other shareholders. Although Icahn previously asked Apple for a $150 billion stock buyback, he says he is proposing a lot less this time.
The proposal by the notable investor will be voted upon in the upcoming shareholder meeting. Even if the proposal is passed, the ‘precatory’ nature of it means that Apple is not exactly bound to follow it. In a way, the proposal and a possible majority vote would indicate that Apple’s shareholders are willing for Apple to initiate the buyback spree.
In response to Icahn’s suggestions, Apple has stated, ‘Earlier this year we more than doubled our capital return program to $100 billion, including the largest share repurchase authorization in history. As part of our regular review process, we are once again actively seeking our shareholders’ input on our program, and as we said in October, the management team and our board are engaged in an ongoing discussion about it which is thoughtful and deliberate. We will announce any changes to our current program in the first part of calendar 2014.’
Source: Carl Icahn