Billionaire investor Carl Icahn just retreated from his buyback battle with Apple Inc. CEO Tim Cook.
In a rare instance of backing down, the feared corporate saber-rattler posted a letter on his web site Monday saying he’s throwing in the towel on his quest to get Apple to buyback an added $50 billion in stock this year.
“We see no reason to persist with our non-binding proposal, especially when the company is already so close to fulfilling our requested repurchase target,” Icahn said in the letter on shareholdersquaretable.com.
Shareholders were slated to vote on the proposal at Apple’s annual meeting of shareholder on Feb. 28th.
Icahn cited a recommendation on Sunday from proxy advisory service ISS to vote against his proposal. ISS, which can influence as much as one-third of votes one any given shareholder proposal, pointed out that Apple has been accelerating the buyback anyway in recent weeks due to the stock’s plunge following Apple’s disappointing first-quarter earnings guidance provided in January.
In its recommendation to shareholders to vote against Icahn’s plan, ISS pointed out that Apple recently repurchased $14 billion worth in shares in a two-week time period, and so “appears on track to repurchase at least $32 billion in shares.” Voting in favor of Icahn’s proposal would “thus effectively only asks the board to spend another $18 billion on repurchases in the current year,” ISS said.
Icahn, who owns $3.6 billion shares of Apple’s stock, said that while he is “disappointed” in ISS’s recommendation, he agrees with their assessment and therefore is pulling out of the fight. He also applauded Cook’s plans, confirmed during last quarter’s conference call, to launch new products in new categories this year, Icahn said.
“We are extremely excited about Apple’s future,” Icahn said.
Just last week, after Cook revealed Apple’s recent stock purchases, Icahn tweeted “Ridiculous. Keep buying Tim! You still have $145 billion cash.”
And in a letter to shareholders shortly before the company’s earnings last month, Icahn blasted Apple’s board as “imperial” for not listening to shareholders’ seeking a quick fix for the sagging stock. The stock sagged further a few days later when Apple reported that the current quarter’s earnings will likely be between $42 billion and $44 billion, or flat with last year’s first quarter.
The stock rebounded somewhat after Cook’s revealed Apple’s latest stock repurchases to the Wall Street Journal, but the shares are still down for the year by 6 percent to $526.74 a share.