Carl Icahn thinks Apple is currently selling at half price

Michael Bluth

Well-known member
Disagree. Icahn just wants the stock price to go up because he owns a boatload of shares.

Apple is fairly valued, perhaps SLIGHTLY undervalued, but it's certainly not half-price...it's market cap is massive
 

eastside_purple

Well-known member
Here is Icahn's entire letter. I haven't read through it in its entirety, but he definitely demonstrates he knows the business quite well and he put a fair amount of thought in his valuation. It's prudent to be skeptical of Icahn's motives given his biased interest, but I wouldn't rule out he isn't correct that Apple is substantially undervalued.

http://www.shareholderssquaretable.com/sale-apple-shares-at-half-price/

I'm particularly interested to see if Tim Cook responds by increasing share buy backs significantly.
 

Michael Bluth

Well-known member
It may very well be undervalued, but to say it's half-price I just cannot agree with. If Apple's price were to double, that would put it's market cap at roughly $1.2 trillion, which would make it the 14th biggest economy in the world based on GDP, right after Spain and right above Mexico. That would also increase it's P/E to over 32, which is well above average for mature companies like Apple, and in line with many small cap growth stocks. A P/E that high should indicate Apple's growth rate is consistently going to increase at a healthy percentage, which is really not possible for them because of how big the company already is.

Having said all that, I'm quite positive Carl Icahn has done his homework, and done it better than I have...but he also has different motives.

(all in my humble opinion)
 

LittleCardsDad

Words Like Violence
Here is Icahn's entire letter. I haven't read through it in its entirety, but he definitely demonstrates he knows the business quite well and he put a fair amount of thought in his valuation. It's prudent to be skeptical of Icahn's motives given his biased interest, but I wouldn't rule out he isn't correct that Apple is substantially undervalued.

http://www.shareholderssquaretable.com/sale-apple-shares-at-half-price/

I'm particularly interested to see if Tim Cook responds by increasing share buy backs significantly.
Icahn loves getting Tim Cook to respond.
 
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