Carl Icahn Says Apple Inc. Trades At 50% Discount In Letter To CEO Tim Cook
Icahn wrote, “Our forecasted growth for FY 2016 and FY 2017 more than adequately justifies using a P/E multiple of 19x our FY 2015 forecast, which along with net cash values Apple at $203 per share today.”
The letter went on to state that, “given the persistently excessive liquidity of $133 billion net cash on Apple’s balance sheet, we ask you to present to the rest of the Board our request for the company to make a tender offer, which would meaningfully accelerate and increase the magnitude of share repurchases.”
Icahn concluded by writing that as “the strength of the earnings growth we forecast materializes, and these [managed] funds scramble to correct [their valuation] mistake, only to find themselves competing in the market to do so, a de facto short squeeze may occur, and we can only hope that the company has repurchased all the shares it can before that happens.”
Apple Inc. recently traded at $101.80 in the premarket Thursday, up 0.99 percent.