Activist investor Carl Icahn has told Apple CEO Tim Cook that the iPhone and iPad maker should launch a $150-billion stock buyback immediately and disclosed that he now owns 4.7 million shares in the company.
In a letter to Cook posted online Thursday, Icahn said he has upped his stake in Apple from 3.9 million at the end of September. At Apple's current stock price, that's worth about $2.5 billion and amounts to less than a 1 percent stake in the company. He plans to increase his stake.
Icahn wants Apple to launch the buyback at its current stock price, which closed at about $525 on Wednesday when the letter was sent. He stressed that he does not plan to tender any of his shares in the buyback he is proposing.
"There is nothing short term about my intentions here," he wrote. Over the long term, Icahn said, he expects Apple's stock price to increase to $1,250 if the company goes through with the buyback as proposed. The highest point that the stock has ever reached was in $705.07, last September.
Apple declined to comment.
Shares of Cupertino, Calif.-based Apple rose $6.95 Thursday to close at $531.91.
Icahn said he wants to make it "very clear" that he supports Cook and Apple's current management team, as well as Apple's culture and the "innovative spirit it engenders." Apple's current buyback plan is for $60 billion over three years.
Speaking of his proposal, Icahn wrote, "While this would certainly be unprecedented because of its size, it is actually appropriate and manageable relative to the size and financial strength of your company."
Icahn said that if Apple says "no" to the buyback proposal, he would "test and see how shareholders feel and if we should do a proxy fight."