If you think Carl Icahn’s letter to Tim Cook, Apple Inc. (NASDAQ:AAPL)‘s CEO, was delivered with the best of intentions for the company’s management, think again. Carl Icahn knew before he even wrote that letter that his request will be thrown to the wolves by the company’s management. These wolves are Apple Inc. (NASDAQ:AAPL) investors and the biggest clue of this narrative, which I will unveil here, was provided by Tom Keene on Bloomberg.
Keene walked through Matt Levine’s article on Bloomberg News, which basically revealed that if Icahn wanted Apple Inc. (NASDAQ:AAPL) to benefit from the share buyback program, considering of course that Icahn’s valuation for Apple, $203 per share is correct, he would have sent the letter privately, so that other investors don’t start putting an upward pressure on the price before Apple Inc. (NASDAQ:AAPL) initiates its buyback program.
“[…] Matt Levine walks through the game theory of what is going on and the most interesting thing in his essay, Adam, is that the letter should have been private. He [Carl Icahn] should have just sent it to Mr. Cook, […]” said Keene.
However what both Keene and Levine failed to realise is that Icahn doesn’t really care about Apple’s management. All he cares about is his investment in the company. He knew there weren’t going to be any more share buyback programs. Apple Inc. (NASDAQ:AAPL) is already in the midst of an intensive program of such sort. Therefore, he wanted the other investors to take his valuation seriously and push the price of Apple Inc. (NASDAQ:AAPL)’s stock higher without even needing the intervention of a board or lawyers.
To this end, Icahn even put up a nice advertisement campaign for his letter, or in more precisely Apple Inc. (NASDAQ:AAPL)’s valuation of $203, using his tweet to stir some action in the investment circles.
Apple Inc. (NASDAQ:AAPL) is currently trading at $101, which would put the value of this attempted manipulation to a nice healthy figure of $102 per share.
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