The explorer starts progress. The pioneer adds pragmatism to the equation. The settler prefers status quo over progress. The gunslinger is never satisfied, criticizes everything, and takes what he wants by force. Apple is being hunted by a notorious, and ruthless gunslinger.
Icahn Or iCon?
Corporate raider Carl Icahn claims to have $2-billion of Apple’s stock. Apple has $150-billion in cash and is worth almost $450-billion.
Icahn the gunslinger wants more money and will get it with whatever means works. Apple is a favorite target of both gunslingers and gold diggers because the company has plentiful riches– millions of customers, billions of dollars in cash.
Icahn’s objective is money. His claim to fame is buying into companies, and, like a gunslinger, forcing management to do his bidding (drive up stock, sell off assets, buy back stock, pay him to leave).
As an asset stripper Icahn would buy a company using borrowed money, sell the company’s assets to pay off the debt, then cash out with a huge profit.
Now, Icahn has his sights set on Apple’s large pile of cash with a $2-billion investment in the company’s undervalued stock. The idea is simple. If he can get Apple to buy back more stock, the stock’s price might go up, and Icahn gets richer.
Or, Icahn could simply become a loud and public thorn in Apple’s side, and pressure the company to buy his stock for a tidy profit. Regardless, it’s apparent that Icahn cares little about Apple as a company or a long term investment. He sees the company as a quick way for him to make hundreds of millions of dollars.
What Should Apple Do?
While $2-billion may sound like a huge investment in a company, Apple is actually worth almost $450-billion, which makes Icahn’s seemingly impressive stake less than half of one percent.
This situation is a good test for Apple CEO Tim Cook and Apple’s board of directors. Do they ignore Icahn and his gunslinging noise, and continue with their buy back plans? Or, do they fold up and buy off Icahn to get rid of him?
What would Steve Jobs do?
Is there anyone who thinks Steve Jobs would buckle under to pressure from a shareholder with less than half a percent of Apple stock?
My view is simple. It’s time for Carl Icahn to take a bath. As an avid Apple watcher, I think Steve Jobs’ advice to Icahn would have something to do with a common way to practice procreation on one’s self.