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Carl Icahn’s private conversation with Tim Cook suggests Apple can still “wow”

If you’re an Apple(s aapl) investor, it certainly would be nice to have a direct line to the company’s CEO, Tim Cook. Apparently, financier Carl Icahn has exactly that, and he likes what he heard from Cook in the their latest conversation. On Tuesday, Icahn shared these two tweets:

Icahn’s comments suggest that he doesn’t believe the more commonly held thoughts that Apple’s period of innovation is over. It’s possible Cook has shared more details around new Apple products expected on September 10 — likely at least one new iPhone and possibly an iPad mini with retina display — or he provided information about Apple’s long-term technology roadmap. Either way, Icahn sees opportunity as an investor based on his company’s stock position in Apple.

Some of the conversation clearly dealt with Apple’s large and growing cash pile: What should it do with the tens of billions of dollars it has hoarded over the last several years? Icahn must have suggested a larger stock buyback than the current plan, but he didn’t — and really can’t — share what Cook’s thoughts are on the matter.

Regardless, Icahn may now have seen what the general public will see over the next few months: Can Apple continue to “wow” consumers with hit new products and services?

21 Responses to “Carl Icahn’s private conversation with Tim Cook suggests Apple can still “wow””

  1. Kevin there is no way that Tim would share information that was not publicly disclosed with Carl Icahn. Absolutely zero chance he would discuss product details that hadn’t already been disclosed etc. That would be against the law

    • justinbenson

      That’s not true. You can share whatever you like. Icahn can’t then act on that information for personal gain. It sounds like he already had his position so he can’t buy or sell based on what he learned (if he learned something that’s not available to all)

  2. This is just silly… As if Tim Cook would put himself and the company on the line by sharing insider information with Icahn. No doubt they might have had a productive discussion about the company, but probably nothing that isn’t publicly known. And if they had discussed anything more, Icahn wouldn’t be so stupid as to tweet it!

  3. Alex Lowe

    Wait a sec. What about this is OK-

    1. Financier meets with CEO of Company X in private.

    2. Financier gets information about Company X completely outside the public knowledge available to the market.

    3. Financier makes a large position on Company X’s stock.

    4. Financier chuckles are he ponders the poor luck of normal investors who can’t personally turn the screws on CEO of Company X.

    • I’m not sure this is the right chronology. From what I understand, it probably went the other way round:

      1. Financier informs the SEC that he’s going to start communicating over Twitter.

      2. Financier buys large position in company X.

      3. Based on the fact that he now owns a large % of company X, Financier gets to talk directly with CEO of said company.

      4. After meeting the CEO, Financier lets the world know that he believes he was right in investing in company X in the first place.

      The point being: Icahn got to speak to Tim Cook because he invested (= bought shares on the public market based on available information), not before he decided to invest.

  4. It is legal for him to say that he has a bunch of stock in one company and that he thinks others should too. At that point he has fully disclosed his stake in it the stocks performance (short or long term) and potential investors are made aware that his recommendations are potentially biased.

    • Esmeralda

      That’s not all he’s doing, though. What exactly was discussed with Tim Cook? If he learned anything that is not publicly disclosed by the company and is not information available to investors something is seriously wrong about this. But of course he is free to say he owns a large stake in company X and is free to urge others to invest in X. He is of course then free to sell his stake in X once such urging has inflated the stock’s price beyond those reasonable for the company’s performance and general market health.

      The very fact you can’t call Tim Cook and sit down with him shows you how there’s a different playing field.

      • justinbenson

        Well technically *having* insider information isn’t a problem. Acting on the information is. So if, after he got off the call, he changed his position one way or the other, that would be problematic.

  5. I’m used to reading headlines and baseless stories like this on Yahoo. So I got confused for a minute when I clicked the link and starting reading….Seriously, I had to check which website I was reading.

      • realist50

        Kevin – Cook almost certainly did not share meaningful details about upcoming products or Apple’s product roadmap with Icahn, which would potentially violate Regulation FD or make Icahn an insider who is unable to trade the stock legally until disclosure of those details.

        Also, I wouldn’t say that it’s necessary to believe that Icahn thinks Apple’s period of great innovation will continue. Between Apple’s current cash and future cash flows, you can easily believe that Apple will shrink over the next 5 years and still be undervalued.

        So, there is no particular reason to think Icahn believes that Apple can still “wow”. He thinks its stock is undervalued, which may imply that he believes Apple can still wow but by no means has to imply that.

        The problem is that you covered a business valuation story as a tech product story.

    • Laughing_Boy48

      I’d say it’s stock manipulation when high volatility takes place. A stock shouldn’t be up a large amount one day and down a lot the next. That makes very little sense unless there’s a deliberate reason for it. Stocks should not move on tweets because they’re not worth any money. Stocks should rise when a company makes money and fall when a company loses money over the course of a financial quarter. Anything else is manipulation. Why should mere rumors cause a stock to jump or fall? A company is either making money or it isn’t.

      I’d love to see Apple raise dividends twice a year even if the stock only goes up to $550 or so. Most say that Apple will never see $700 ever again. I can live with that as long as the dividends continue to flow. I have enough shares to live off even the current dividends.