Billionaire Carl Icahn Sells Entire Stake in Apple
Icahn is concerned with barriers to trade that China’s authoritarian regime might put in place
New York: In an interview with cable television network CNBC, Icahn also said he was “still very cautious” on the US stock market and there would be a “day of reckoning” unless there was some sort of fiscal stimulus.
Icahn had been a huge cheerleader of Apple, acquiring a stake in the company almostthreeyearsago,repeatedlycalling the investment a “no brainer.” In an open letter to Apple CEO Tim Cook in May 2015, Icahn had argued that shares of the iPhone maker were worth $240, about 90% more than they had been trading. At $240 a share, Apple’s market cap would be $1.4 trillion, Icahn asserted. But Icahn, who owned 45.8 million Apple shares at the end of last year, said China’s economic slowdown and worries about how China could become more prohibitive in doing business triggered his decision to exit his position entirely.
“We no longer have a position in Apple. Tim Cook did a great job. I called him this morningtotellhimthatandhewasalittle sorry, obviously. But I told him it’s a great company,” Icahn said. “In Apple today as opposedtosixmonthsorayearago,inthis one, there’s no need for activism because I think they have a great management. But you worry a little bit, maybe more than a little, about China’s attitude.” The Chinese government could “come in and make it very difficult for Apple to sell there. You can do pretty much what you want there,” Icahn said. Earlier this month, China shut down Apple’s iTunes moviesandiBooksstoreswithinthecoun- try, following Beijing’s introduction of regulations in March imposing strict curbs on online publishing, particularly for foreign firms. Asked when he might get back in, Icahn re - plied: “I don’t think it’s the price point. I think it’s my opinion about what is happening with China. I think the stock is very cheap on a multiple basis. China could be a shadow for it, and we have to look at that.” Icahn, who suggested that he made roughly $ 2 billion off the Apple trade, said he was in Apple for about three years and “if you bought the stock then, you got a 48% to 50% total return. We
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Apple shares came under further selling pressure during Icahn’s television interview, as did the Dow Jones industrials with Apple closing down over 3% at $ 94.83. The Dow ended down by 210 points. Apple on Tuesday posted its first decline in iPhone sales as well as its first revenue drop in 13 years. The company’s sales fell by more than a quarter in China, its most important market after the United States, and it forecast another disappointing quarter for global revenues. Apple shares have now declined more than 10% this week.
The Chinese government could make it very difficult for Apple to sell there