Activist investor Carl Icahn has amassed a “large position” in Apple and believes the iPhone maker should be doing more to revive its share price.
Icahn said on Twitter that he had a “nice conversation” with Apple chief executive Tim Cook about his belief that the technology firm should use even more of its $147 billion (£95bn) cash pile to buy back its own shares as soon as possible.
The surprise revelation from the billionaire caused a stir on Wall Street and pushed Apple’s shares up almost 5 per cent to close at a seven-month high of $489.57 on the Nasdaq last night.
A spokesman for Apple described the discussion as positive, adding: “We appreciate the interest and investment of all our shareholders.”
In April, Apple pledged to spend $60bn buying back shares by the end of 2015 as a way of returning some of its cash to shareholders. About $18bn of that commitment already had been spent, and Apple also plans to hand out more than $10bn in dividends each year.
Icahn, who did not disclose the size of his holding, thinks Apple should be pouring even more money into its shares, which he said are worth more than most investors currently believe.
He told the Reuters news agency that the iPhone, iPad and Mac computer maker has the ability to do a $150bn buyback now by borrowing funds at 3 per cent.
“If Apple does this now and earnings increase at only 10 per cent, the stock – even keeping the same multiple currently – should trade at $700 a share,” Icahn said.