Billioniare investor Carl Icahn says that there's no reason to persist with his Apple buyback proposal, according to new letter. Icahn, who is one of Apple's biggest shareholders, has been supportive of a stock buyback.
Over a year ago we wrote "How The Fed's Visible Hand Is Forcing Corporate Cash Mismanagement" in which we explained that due to ZIRP, management teams are left with just two (very shareholder-friendly) capital allocation choices: stock buybacks and dividends, to the detriment of such much more long-term critical uses of funds as capital expenditures, and to a lesser extent M&A.
Johnson & Johnson (JNJ), the biggest producer of health products, announced on Monday that the company's board has approved a share repurchase program worth $5 billion. It was stated that the timing of the program’s full implementation remains at the discretion of the management.
Rolls-Royce Holding PLC (LON:RR) is up 5.9% in value during trading in London, following an announcement of a strong share repurchase program. Its ADR (RYCEY), which is down roughly 16.7% year-to-date, is subsequently expected to increase in the US market today.
Apple Inc. (AAPL) reported results for the second quarter of its fiscal year 2014 (2QFY14; ended March 29, 2014) after the closing bell yesterday. The tech giant reported better-than-expected revenues and earnings for the quarter while providing strong guidance for the ongoing quarter. The improvement in revenues and earnings is attributable to improved iPhone shipments revenues from service during the quarter.
Around six months after first tweeting his admiration for Apple's cash stockpile and a "large position" in the largest company in the world, it would appear every business media's favorite activist is throwing in his chips.
Yesterday Carl Icahn tweeted that he sent a letter to Tim Cook, and would put it on a new website he was launching called Shareholder's Square Table — now the site is live. Unfortunately, the site is also crashing a bit so we're having issues logging in to see his letter (very popular obviously), so we had to head to Street Insider to get a copy.
By David Sterman
Many investors tend to ignore stock buyback announcements. Seemingly massive share repurchase programs become a lot less impressive when you realize they are mostly attempting to offset generous stock option grants for insiders by reducing growth in the share count. Adding insult, some buyback programs are put in place even as a stock is surging to multi-year highs.
Dr. Duru submits: As Research In Motion’s stock (RIMM) plunged the last repurchase program underwater, I speculated that RIMM would initiate another share repurchase program if the stock continued to go lower.