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Billionaire Investor Carl Icahn Tells Fox Business Apple 'Could Certainly Innovate as Much as They Want' and Still Launch His Proposed $150 Billion Stock Buyback

October 28, 2013 | About:
The Dividend Guy Blog

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Billionaire investor Carl Icahn spoke with FOX Business Network’s (FBN) Charlie Gasparino about his positions in Apple and Herbalife. He discussed his proposal for Apple to launch a $150 billion stock buyback, saying, “They could certainly innovate as much as they want and still do this buyback.” When asked whether he could maintain a stake in Herbalife for years, Icahn said, “I could. I have no compunction the way Herbalife is going right now.” Icahn also discussed his Twitter war with PIMCO Founder and Co-CIO Bill Gross, and said, “I certainly respect Bill Gross, but it’s a little fun.”

Excerpts from the interview are below.

On his proposal for Apple to launch a $150 billion stock buyback:

“Looking and studying these books and looking at the numbers, Apple, by giving back $150 billion, would be earnings that they have. The free cash flow they have is close to $50 billion a year, okay? They certainly could afford $5 or $6 billion of interest and not even notice it, relatively speaking. I know it's huge numbers. So, they could certainly innovate as much as they want and still do this buyback. And one has nothing to do with the other. And by the way, I'm with Tim Cook. I think he's doing a good job. I'm against what is going on financially. I don't think the board has any real understanding of it, and I don't mean that in a bad way about the board. I'm sure they're not bad guys. But what they should be doing -- and it makes no sense not to take the money that Tim Cook has told me on several occasions, and I think told the world, that he believes this company is very undervalued. Therefore, logically -- I was good in school in logic -- therefore, logically, if you have $ 150 billion or a lot of money, as I said -- if you have a lot of money, you go out -- I owned an oil well once, big oil well, and there was a partner. The partner decided at the wrong time, you know, things weren't going well, to go sell his share of the oil well. And he gave them to me, and I thanked him for coming to me, because he had a deal with somebody, he said but if you want to bid higher, Carl, be my guest. Why can’t we do the same with the Apple stock?”

On Apple’s Board of Directors:

“I don't respect many boards, and in this case I don't respect what they're doing here. And the fact that they're doing it doesn't make it right. In fact, the reason -- and I, you know, I'm patting myself on the back here but to make a point. The reason we've made 1400 percent since 2000 if you bought our stock is because we went against these kind of boards. We went against them, and we got involved, and I can't tell you how bad these companies are run, some of them. Not all of them. And even some companies we've gotten involved with like that, but we liked the board. But my point to you is that to say that the board wants to do it, it’s like the divine right of kings. Is Henry VIII right in hanging all his wives or whatever he did? Chopping their heads off, I guess.”

On whether he wants to get rid of the board:

“No, no, no. I've said it very plainly. This is not a fight I could ever win, nor would I even try it.”

On how he would exit from Herbalife (HLF):

“Well, let's talk about exiting. I mean, I think people have the wrong impression about my exit. I’ve held companies 15, 20 years…I like holding a lot of these companies, and I think Herbalife is a very undervalued company. But I don't look at it week to week, month to month, sometimes even year to year. We hold things for many years. I think Herbalife will continue to grow. I think unlike some of the critics of Herbalife, I think it does make work for people. I don't think it hurts anybody. Anybody that buys their product if they want it, you know, the poor Spanish woman that Ackman refers to you know, they could give it back. They never do. So they're not losing.”

On whether he could be in Herbalife for years:

“I could. I have no compunction the way Herbalife is going right now. You know, I'm certainly not at liberty to talk about their earnings, and I'm not talking about them, and, in fact, I, frankly, I'm not sure what they are to begin with, but that's not the issue. You know, we have people on the people on the board and all that. I'm talking generally, big picture. Herbalife has a great model. I think Herbalife actually, you know with all the criticism, you know, it is certainly not a pyramid scheme, in my opinion. And I think it does make work for people that are out of work. I mean it is absurd to say it doesn't. It is a way of retailing. Why do you have to retail to food stores necessarily? Why can't you retail this way?”

On his Twitter war with PIMCO Founder and Co-CIO Bill Gross:

“I certainly respect Bill Gross, but it’s a little fun. He’s out there telling me what I should be doing and I’m saying to him if you’re so into doing good and you’re so into this, why don’t you step up to the plate and join the Giving Pledge like I and Bill Gates – he’s talking about Bill Gates as a great hero so I said follow him and join the Giving Pledge instead of just talking about how good you want to be and give half your money away like I did and like Bill Gates did. Talk is cheap, you know? But I am not against Bill Gross, I respect him. I think he’s accomplished a lot. I don’t own any PIMCO but I still think he’s a smart guy. But I sort of take umbrage a little bit to him going out and taking a gratuitous lap.”

On being called a greenmailer:

“I’d like to say something about the greenmail. That was in the eighties and I don’t consider it something that I have to defend because the companies would come to us and would say one hand we’re going to kill you, we’re gonna murder you - I had no money then, relatively little money - and we’re going to put you out of business and sue you forever or with the other hand here take it, we’ll give you $20 million, it’s their money. I never asked for it, they would come and give it to you. But obviously now that I have money I would never do it. I don’t do it.”

**CREDIT FOX BUSINESS NETWORK**

Rating: 5.0/5 (1 vote)

Comments

w.james.0900
W.james.0900 - 5 months ago
[color=#525252; font-family: 'Droid Sans', sans-serif; line-height: 20px; text-align: justify]Some shareholders – Carl Icahn in particular – are unhappy and say that the cash that is unused should be put to good use. Apple share price has declined around 14% over, he wants the stock price to go up. [/color] http://goo.gl/zE87QG

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