Can A Professional Investor Muscle His Way To Returns

David Frost // How To Invest


December 4  

It’s not uncommon for the uber wealthy, successful, professional investor to take to the air waves in an effort to state their case for corporate change.

Carl Icahn made a sizable investment in Apple (AAPL).  He is not on the board of directors, is not a majority shareholder and has no additional leverage outside voting his shares.

However, he likes to resort to the media in an effort to make his case.

This time, his plea for Apple and CEO Tim Cook is to initiate a stock buy back of $50 Billion, down from a previous request of $100 Billion.

Basically, if Apple bought it’s own stock back with the piles of cash on its balance sheet, it would reduce the amount of outstanding shares which makes all the remaining shares more valuable because existing holders would effectively own a larger piece of the company, pushing the value of their stock higher.

So Mr. Icahn makes his case to those that will listen.  We will watch and see how it plays out over time.

Earlier Wednesday, Icahn announced in a tweet he has notified Apple that he intends to make a push for a vote on a buyback increase.

“Gave $AAPL notice we’ll be making a precatory proposal to call for vote to increase buyback program, although not at $150 billion level,” Icahn wrote in a tweet. A precatory proposal would not be legally binding.

You can read  and watch the full report published by CNBC.

About the Author

Trading and investing in markets is second nature to some, but a mystery to others. The goal is to provide a forum where everyday people aspiring to be part time or full time traders will learn how view markets differently and profit beyond their wildest dreams.

David Frost