You choose, we deliver
If you are interested in this story, you might be interested in others from The Journal Gazette. Go to www.journalgazette.net/newsletter and pick the subjects you care most about. We'll deliver your customized daily news report at 3 a.m. Fort Wayne time, right to your email.

Business

  • Ford's sleek new pony off and running
    Ford began production of the all-new 2015 Mustang on Thursday, and if it sells well the Flat Rock, Michigan, assembly plant could add a third shift.There are some hurdles to overcome first.
  • Consumer spending drops as car sales stall
    WASHINGTON – U.S. consumer spending fell in July, with a drop in auto purchases accounting for most of the weakness. Income growth also slowed.Consumer spending edged down 0.1 percent last month after a 0.
  • Soaring stocks, dueling forecasts
    NEW YORK – Is it time to cash out of stocks?The market has nearly tripled in a little over five years, and the Standard & Poor’s 500 index closed above 2,000 for the first time on Tuesday.
Advertisement

Icahn backs off plan for $50 billion Apple stock buyback

Activist investor Carl Icahn is backing off his proposal that Apple spend $50 billion buying back its own stock during the current fiscal year that ends in September.

Icahn told fellow Apple stockholders Monday in a letter that he sees no reason to persist in light of the Cupertino, Calif., company’s recent buybacks and a recommendation from an influential firm that gives advice to big stockholders.

Institutional Shareholder Services Inc., or ISS, said in a report that Apple stockholders should vote against Icahn’s non-binding proposal.

The company said that while Apple Inc.’s board “has failed to articulate a strategy for addressing its long-term capital needs,” the Icahn proposal would micromanage the technology company’s capital allocation process.

Apple representatives did not immediately return a call from the Associated Press seeking comment.

Apple has repurchased $14 billion of its stock in the two weeks since it reported first-quarter financial results and a second-quarter revenue outlook that disappointed investors.

ISS noted that the company already appears to be on track to buy back at least $32 billion in stock in fiscal 2014. But the firm also said that, “on the spectrum of options for allocating capital, the board appears to have been sluggish only in returning excess cash to shareholders.”

Icahn said he agrees with that observation, but in light of the company’s recent, aggressive buybacks “we see no reason to persist with our non-binding proposal, especially when the company is already so close to fulfilling our requested repurchase target.”

The billionaire investor added he was pleased that Apple’s board and CEO Tim Cook have taken an aggressive approach to repurchases “that we hoped to instill with our proposal.”

Icahn’s letter came only a few days after a message posted on his Twitter account urged Cook to keep repurchasing stock.

Just last month, Icahn raised his stake in Apple, revealing on Twitter that he’d put another $500 million into Apple stock. He already owned about 4.7 million Apple Inc. shares worth more than $2.5 billion.

Icahn said Monday that he was extremely excited about the company’s future.

Apple stock rose more than 1 percent, or $5.99, to $525.67 in morning trading Monday, while the Nasdaq exchange slipped.

Advertisement