In an open letter to Tim Cook, Chief Executive for Apple Inc. (AAPL-Nasdaq), billionaire investor Carl Icahn is calling for Apple to return to a longtime theme of the activist investor's campaign for the iPhone maker to boost shareholder returns, requesting the tech giant to execute a much larger share buyback.
Icahn - one of 10 top Apple investors - said on Monday that shares of Apple are "still dramatically undervalued" and should be trading at $240, nearly double its current share price. In February 2015, Icahn reported that he owned about 53 million shares of Apple, with an approximate value of $6.8 billion.
"Apple is poised to enter and in our view dominate two new categories (the television next year and the automobile by 2020) with a combined addressable market of $2.2 trillion, a view investors don’t appear to factor into their valuation at all," Icahn wrote on Monday.
During April, following pressure from Icahn and other investor activists, Apple boosted its share repurchase program to $140 billion from $90 billion announced in 2014 plus, increased its quarterly dividend by 11% to 52 cents per share.
Icahn wrote in the letter, "It is our belief that large institutional investors, Wall Street analysts and the news media alike continue to misunderstand Apple."
Into early afternoon trading Monday, Apple shares were higher by 1.33%.
Contributed by Millennium Traders
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