Is Carl Icahn Really Net Short Apple (AAPL) Into Cook Meeting?
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Rating Summary:
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Up: 11 | Down: 18 | New: 17
Rating Summary:
39 Buy, 25 Hold, 7 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
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Carl Icahn's long-awaited meeting with Apple's (NASDAQ: AAPL) CEO Tim Cook is finally upon us. After first revealing plans for an undisclosed September dinner date on August 22nd via Twitter, Mr. Icahn and Mr. Cook have apparently finalized those plans. According to reports from CNBC's David Faber yesterday, the two will meet on Monday, September 30 in New York City.
While Apple is currently in the middle of a record $60 billion share repurchase plan, Carl Icahn would like to see the amount raised and used in an accelerated fashion. With $42 billion remaining on the current plan as of June 29, 2013, analysts believe Apple has room to raise it by $50-$90 billion.
Into the meeting, some speculation has arisen that Mr. Icahn may actually be net short Apple stock. In a note to investors yesterday, Global Equity Research analyst Trip Chowdhry said "there is a perception among investors that Carl Icahn is actually net short Apple stock". It is unclear where Chowdhry is getting this information. Possibly hedge funds or other institutional investors.
General market thinking has Carl Icahn long about $2 billion in Apple stock and recent on-air comments from Mr. Icahn that Apple is a "no brainier" suggests he is happy being long the stock.
Now Carl is known for hedging his bets, this you can be sure off - but net short? That seems a little outrageous. However, looking at it another way it is quite possible that Icahn has hedged his portfolio broadly with an SPDR S&P 500 (NYSE: SPY) short. Given Apple's weight in the index of about 3%, if the hedge is large enough it would limit his long exposure to Apple more so than any other stock in his portfolio. Still, it would be hard to imagine that he is net short Apple. Icahn has been very vocal and clear about the stock being cheap, and if he were short and pushing for an accelerated stock buyback that would be suicide.
So, despite the market chatter of Icahn being net short Apple investors should rest assured that Icahn has one agenda - and that is to get Apple's stock price higher.
While Apple is currently in the middle of a record $60 billion share repurchase plan, Carl Icahn would like to see the amount raised and used in an accelerated fashion. With $42 billion remaining on the current plan as of June 29, 2013, analysts believe Apple has room to raise it by $50-$90 billion.
Into the meeting, some speculation has arisen that Mr. Icahn may actually be net short Apple stock. In a note to investors yesterday, Global Equity Research analyst Trip Chowdhry said "there is a perception among investors that Carl Icahn is actually net short Apple stock". It is unclear where Chowdhry is getting this information. Possibly hedge funds or other institutional investors.
General market thinking has Carl Icahn long about $2 billion in Apple stock and recent on-air comments from Mr. Icahn that Apple is a "no brainier" suggests he is happy being long the stock.
Now Carl is known for hedging his bets, this you can be sure off - but net short? That seems a little outrageous. However, looking at it another way it is quite possible that Icahn has hedged his portfolio broadly with an SPDR S&P 500 (NYSE: SPY) short. Given Apple's weight in the index of about 3%, if the hedge is large enough it would limit his long exposure to Apple more so than any other stock in his portfolio. Still, it would be hard to imagine that he is net short Apple. Icahn has been very vocal and clear about the stock being cheap, and if he were short and pushing for an accelerated stock buyback that would be suicide.
So, despite the market chatter of Icahn being net short Apple investors should rest assured that Icahn has one agenda - and that is to get Apple's stock price higher.
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