Carl Icahn Praises Apple Ahead Of iPhone 5S, iPhone 5C Release
Apple's (NASDAQ: AAPL) iPhone 5S and iPhone 5C are less than 24 hours away from release.
While staunch Apple supporter Carl Icahn (NASDAQ: IEP) has not said whether or not he will purchase either device, the famed investor took another opportunity to reiterate his love for the Mac maker.
"I think Apple is very undervalued," Icahn told CNBC during an interview after the market close.
Icahn listed a handful of reasons to explain why he continues to believe that Apple is undervalued despite some concerns that domestic iPhone 5C sales may disappoint.
- Apple has a ton of cash on hand.
- The company continues to earn billions in annual revenue.
- Roughly $45 billion is estimated to be added to its cash reserves every year.
Icahn also expressed his disgust with corporate laws, particularly the "business judgment rule." The rule was originally created to protect a corporation's board of directors from false or misleading allegations, but Icahn is convinced that it has created a dysfunctional system that needs to be changed.
Icahn wrote about this issue in an op-ed published in The Wall Street Journal.
"How can it be, for instance, when a shareholder purchases 10% or 15% of a company's stock, management can legally issue a flood of new stock to dilute those holdings and thwart a takeover because it may cost them their jobs?" Icahn questioned in his editorial.
"How is it fair that boards can simply ignore shareholder votes and leave incompetent crony directors and CEOs in place? Or legally ignore shareholder board nominations despite overwhelming evidence that new ideas and strategies are essential to salvage a failing business?"
During his interview with CNBC, Icahn really tried to drive the point home that the there is a lot of cronyism in the boardroom. He said that he couldn't say whether the problem was specific to men or women, but he thinks that CEOs often have too many buddies on the Board.
Unfortunately, you can't get rid of the board unless you go to "vast extremes," Icahn said.
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.