Repurchase

Tim Cook's 2-week, $14 billion Apple buying opportunity

February 7, 2014: 7:56 AM ET

While the Street was dumping Apple, Cook -- and Carl Icahn -- were snapping up shares.

chart_ws_stock_appleinc_20142755659_614xa

Click to enlarge.

Click to enlarge.

FORTUNE -- Tim Cook's interview in Friday's Wall Street Journal puts the attached Apple (AAPL) stock chart in a new light.

What looked to human day traders and computer algorithms on Jan. 27 like a signal to sell, Cook saw as a buying opportunity.

He was surprised, he told the Journal, that Apple's share price fell 8% after the company turned in its Q1 2014 earnings and Q2 guidance.

But while the Street was shorting the stock, Cook's people were in there snapping up shares -- 26.7 million of them, by my calculation.

It puts into perspective the roughly 1 million shares Carl Icahn says he bought on Jan. 28. (See bar chart.)

Icahn, of course, is the corporate-raider-turned-shareholder-activist who's been trying to shake some of Apple's $159 billion holdings in cash and marketable securities out of the company's coffers and into the hands of shareholders like him. His latest proposal comes up for a vote at Apple's Feb. 28 shareholders meeting.

"Just bought $500 mln more $AAPL shares," he tweeted on Jan. 28. "My buying seems to be going neck-and-neck with Apple's buyback program, but hope they win that race."

Cook told the Journal that he wants to be "aggressive" and "opportunistic" with Apple's cash, but he has also made it clear that he will not be rushed. (See Apple's Tim Cook to billionaire Carl Icahn: Step aside.)

"[We] want to be able to adjust for the long-term interest of the shareholders," he said, "not for the short-term shareholder, not for the day trader."

With its latest purchases Apple has now spent $40 billion of the $60 billion it had previously planned to spend by the end of 2015 buying back its own shares. Cook told the Journal that the company will have "updates" to that plan in March or April.

LINKS:

  • The Icahn effect: Round 3

    He buys, he tweets, he cajoles, and the hearts of Apple traders skip a beat.

    FORTUNE -- Three tweets so far today from Carl Icahn about Apple (AAPL):

    10:50 am: Since tweeting about our large position in $AAPL on Aug 13, when the stock was 468 per share, we've kept buying shares of this 'no brainer.'
    10:50 am: Having purchased $500 million more $AAPL shares in the last two weeks, our investment has crossed the MORE

    - Jan 22, 2014 11:39 AM ET
  • How much leverage does Carl Icahn really have over Apple?

    Icahn's $2 billion stake amounts to half of 1% of Apple's outstanding shares.

    FORTUNE --Reuters and Bloomberg made a big deal last week about the fact that Carl Icahn had increased his investment in Apple (AAPL)

    from 3.8 million shares (worth $1.8 billion)
    to 4.7 million shares (worth $2.4 billion).

    Why this was considered news, given that Icahn disclosed it three weeks ago, was not clear from their reports.

    Their reports also failed to put those MORE

    - Nov 17, 2013 8:29 AM ET
  • Carl Icahn ups his stake in Apple to $2.5 billion

    Sends letter to Tim Cook urging him to boost his share repurchase plan to $150 billion

    FORTUNE -- Tim Cook is getting the full Carl Icahn treatment.

    A phone call (and some tweets about it) in August.
    A meeting (also tweeted) in September.
    And on Thursday, an 860-word letter, published on his new shareholder's roundtable website.

    In the corporate raider's latest missive he reiterates in public the points he presumably made to Cook in private: MORE

    - Oct 24, 2013 10:36 AM ET
  • Apple's Carl Icahn effect, redux

    A dinner, a tweet, a pop in the market.

    FORTUNE -- He's done it again.

    In August, corporate raider Carl Icahn announced on Twitter that he believed Apple (AAPL) at $470 was "extremely undervalued." He said that he had taken a "large position" in the company, had talked to Tim Cook about accelerating the company's record $60-billion stock buyback program, and would be meeting with Cook to discuss it further.

    On the strength MORE

    - Oct 1, 2013 10:44 AM ET
  • Is Apple ripe for another massive stock buyback?

    Tim Cook spent a record $16 billion last quarter. Carl Icahn wants him to spend more.

    FORTUNE -- In April, Apple (AAPL) announced what is apparently the largest share repurchase program in the history of capitalism: $60 billion before the end of 2015.

    By the end of June the company had already bought $16 billion worth of its own stock -- more than 25% of its eleven-quarter allocation in the space of MORE

    - Sep 26, 2013 4:44 PM ET
  • Apple's dividend and buyback: What the analysts are saying

    Apple (AAPL) gave Wall Street what it had been asking for

    The Street's reaction has been largely positive, and the stock closed Monday at a new all-time high: $601.10, up $15.53 (2.65%) for the day.

    Jefferies' Peter Misek:  Dividend and Buyback Bigger Than Expected. Apple announced a $10.60 annual dividend (1.8%) commencing in CQ3 and $10B buyback over three years (to offset dilution). We had expected a dividend announcement in H2 in the MORE

    - Mar 19, 2012 10:19 AM ET
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