Carl Icahn withdraws $50B buyback proposal as institutional advisory firms side with Apple [Updated]

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Update: Carl Icahn has now withdrawn his proposal in the light of the ISS recommendation against it.

Prominent institutional advisors Institutional Shareholder Services (ISS) and smaller firm Egan-Jones have both advised shareholders to vote against billionaire investor Carl Icahn’s resolution calling for Apple to buy back an additional $50B of its own stock, reports Reuters.

“(The Apple board) has returned the bulk of its U.S.-generated cash to shareholders via aggressive stock buybacks and dividends payouts,” the ISS report said. “In light of these good-faith efforts and its past stewardship, the board’s latitude should not be constricted by a shareholder resolution that would micromanage the company’s capital allocation process.”

Carl Icahn has been buying large blocks of AAPL stock, with his current holding now totalling around $4.1B, giving him roughly a 1 percent stake in the company. He repeatedly called for increased stock buy-backs by Apple before submitting a formal proposal for a minimum $50B. Stockholders will vote on the proposal on 28th February.

Apple has argued that having large cash reserves gives it flexibility, noting in particular that it may at some stage wish to make a very large acquisition.

“You want to be able to adjust for the long-term interest of the shareholders, not for the short-term shareholder, not for the day trader,” Mr. Cook said. “We may see a huge company tomorrow that we want to acquire or something may happen in the stock market that’s unpredictable.”

ISS did, however, still describe the size of Apple’s cash reserves – which now stand at almost $160 billion – as an “excess,” and said that an urgent resolution was needed.

Apple recently repurchased $14B of its own stock, bringing it to a record $40B over the past year. Tim Cook has stated that it would discuss further buybacks in March/April.

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Comments

  1. Marco Sbaraglia - 9 years ago

    I really do not understand how “the size of Apple’s cash reserves – which now stand at almost $160 billion” could be an “excess, and said that an urgent resolution was needed.”

  2. Kieran Navickas - 9 years ago

    Ba hahahha… Take that Carl Icahn! Carl Icahn should go take over Microsoft.
    Apple made the $160 billion. They and they alone know what should be done with it, not some investment advisor jackasses. Apple should issue a release, “When you make exceptional products and $160-Billion in surplus, then come talk to us about ideas, until then fuck off.”

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Avatar for Ben Lovejoy Ben Lovejoy

Ben Lovejoy is a British technology writer and EU Editor for 9to5Mac. He’s known for his op-eds and diary pieces, exploring his experience of Apple products over time, for a more rounded review. He also writes fiction, with two technothriller novels, a couple of SF shorts and a rom-com!


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