Billionaire investor Carl Icahn is turning out to be Apple’s bestest frenemy.
Despite blasting its board for its “imperial” ways last week, the famed corporate agitator stood by the tech giant Tuesday by buying $500 million more shares as other investors fled.
“Just bought $500 mln more $AAPL shares,” Ichan tweeted Tuesday as Apple’s stock sank like a stone on broader fears that the company’s once red-hot growth numbers are a thing of the past.
Not including Icahn, the i-Phone maker spooked Wall Street on Monday when it said its expects to report revenue of between $42 billion and $44 billion for the current quarter, which ends in March.
That’s short of Wall Street estimates of $46 billion. It also means that sales this quarter will be flat with this time last year, when Apple posted revenue of $43.6 billion.
After dropping more than 8 percent in after-hours trading Monday, investors continued to hammer the stock on Tuesday, and sent the shares down to $43.55, or 7.9 percent, to $506.95 at the closing bell.
Also dragging down the stock were Apple’s disappointing iPhone sales in the October-through-December quarter. Apple sold a record 51 million smartphones during the period, below Wall Street’s sales expectations of 55 million phones globally.
The double whammy of bad news had Wall Streeters clamoring on Tuesday for Apple to come out with some new products to bring it back to the days of double-digit growth.
“Larger screens & new categories needed to revive growth,” declared Barclay’s technology team in its research note on Tuesday.
The stock drop also had analysts predicting that Icahn will grow even bolder in his calls for Apple to boost its share-repurchase program to $110 billion from $60 billion.
“We expect his [Icahn] voice to become even louder in the coming weeks,” said Brian White, an analyst with Cantor Fitzgerald, speaking of the septuagenarian investor.
Yesterday, Apple execs sought to assure investors and analysts that Apple is working on new products. Rumors are that it could release a phone with a bigger screen this year, and a smart watch or smart television either this year or next.
“We are working on things that you see, that we are shipping today, but we are working on things that are not — that you can’t see today,” Apple CFO Peter Oppenheimer said on a conference call when asked about investments into new products.
But CEO Tim Cook warned Wall Street that no amount of clamoring will convince his team to rush out a new device.
“We’re willing to make a new product that’s a great product,” Cook said. “Where our line in the sand is is making something that’s not fantastic.”