Disappointed in ISS, Icahn Pulls Back on Apple's $50B Buyback

Carl Icahn pulled back on his $50 billion buyback plan for Apple AAPL given the “aggressive” recent repurchase of $14 billion worth of shares following first quarter results. 0n December 5, Carl Icahn modified his stock buyback plan for Apple. Instead of the $150 billion previously proposed, Icahn said he would seek a vote to push Apple to repurchase $50 billion of stock and unlock cash. The billionaire investor increased his stake in Apple by more than a billion dollars last month. On Sunday, the Institutional Shareholder Services Inc. (ISS) advised investors to vote against the non-binding proposal. ISS wrote, “While the board has failed to articulate a strategy for addressing its long-term capital needs, it has returned the bulk of its U.S.-generated cash to shareholders. The board's latitude should not be constricted by a shareholder resolution that would micromanage the company's capital allocation.” Carl Icahn responded to the ISS recommendation against his proposal with a letter to Apple shareholders on Monday. Icahn noted that although he is disappointed with the ISS's proposal, he sees no reason to persist with the Apple proposal. The investor still remains optimistic on Apple shares writing, “in light of Tim Cook's confirmed plan to launch new products in new categories this year (in addition to an exciting product roadmap with respect to new products in existing categories), we are extremely excited about Apple's future. Additionally, we are pleased that Tim and the board have exhibited the “opportunistic” and “aggressive” approach to share repurchases that we hoped to instill with our proposal. It is our expectation that Tim and the board continue to exhibit this behavior as fiduciaries to the shareholders since they clearly seem to agree that our company continues to be extremely undervalued, and we all share a common optimism with respect to the company's bright long term future.” Shares of Apple closed at $519.68 on Friday. The stock dipped at $518.00 following initial negative sentiment around the ISS recommendation and Icahn's letter. Shares have rebounded to $529.34, up 1.86%.