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Last updated: October 24, 2013 11:24 pm
The call was made in a letter published on the activist investor’s new website, Shareholders’ Square Table. The site requires registration to read, and crashed under the volume of people trying to access it on Thursday morning.
In the letter addressed to Tim Cook, Mr Icahn reiterated demands that he said he had made to Apple’s chief executive over dinner last month.
The veteran corporate agitator praised Apple’s products, brands and leadership but criticised its board for lacking financial expertise.
“We want to be very clear that we could not be more supportive of you, the existing management team, the culture at Apple and the innovative spirit it engenders,” Mr Icahn wrote.
“Our criticism relates to one thing only: the size and timeframe of Apple’s buyback programme. It is obvious to us that it should be much bigger and immediate.”
Mr Icahn pledged that he would not sell down his own stake in any buyback, as an attempt to show that his intentions were not “short term”.
Apple declined to comment.
Mr Icahn also disclosed that he had increased his shareholding by a fifth to 4.73m shares, now valued at $2.5bn, or about 0.5 per cent of Apple’s stock.
“We currently intend to buy more,” he wrote, reiterating his belief that “the market continues to dramatically undervalue the company”, despite a 29 per cent rise in its stock price over the past six months.
“The timing for a larger buyback is still ripe but the opportunity will not last forever,” he said.
The mixture of praise and pressure is in contrast to many of Mr Icahn’s recent corporate interventions, where he has often assailed boards and managers and sought bigger changes in strategy or corporate governance.
It was enough, however, to prompt a public outburst from one of the world’s most powerful fund managers, Pimco founder Bill Gross, who tweeted his criticism of Mr Icahn after the letter was published.
“Icahn should leave Apple alone & spend more time like Bill Gates,” Mr Gross wrote, suggesting Mr Icahn should follow the lead of Microsoft’s founder and focus on charitable work. “If Icahn’s so smart, use it to help people not yourself.”
Apple’s net cash is forecast to reach $144bn by the end of September, the bulk of which is held offshore. Mr Icahn’s proposal would see it borrow further against those funds to finance the repurchase scheme.
The billionaire said on CNBC on Thursday that he would consider launching a proxy fight for board representation if he had the support of other shareholders to do so.
However, Warren Buffett, chief executive of Berkshire Hathaway, last week backed Apple’s board and management, saying that they should not run the company to please short-term investors.
Ed Cowart and John Pandtle, managers of the Nordea 1 North American All Cap Fund, which holds a much smaller stake than Mr Icahn, said Mr Icahn's scheme would amount to "emptying the balance sheet of nearly the entire amount of cash trapped overseas".
"We appreciate the enthusiasm for returning wealth to shareholders, but we do not see the necessity for Apple to engage measures that are quite so drastic," they said, suggesting that the funds might be better spent on international acquisitions.
At the end of June, Apple had used $18bn of the $60bn authorised for share buybacks and held just under $130bn in cash, net of borrowings at that time.
Apple’s share price rose 1.3 per cent to $531.91 in New York, bringing it back to its level at the start of the year. However, it still stands well below its all-time high of $702.10 in September last year.
Mr Icahn said he believed the stock price could surpass that figure, rising 140 per cent from its current position.
Mr Icahn first disclosed his stake in August , when the stock price stood at $476, before leaping to $489 after the investor tweeted about his holding in the world’s most valuable company.
His new website is self-described as a “platform from which we can unite and fight for our rights as shareholders and steer towards the goal of real corporate democracy”. People registering for its email updates are promised “no-brainers” and “absurdities”, as well as reports on companies the Icahn group has invested in.
His other recent targets in the technology industry have included Dell, where he failed to prevent a management buyout to take the computer maker private, and where he recently began to sell down his 9 per cent stake, cashing in a profit of more than $700m after 14 months.
Apple earlier this week unveiled a new range of iPads and Mac computers, and will report its fourth-quarter earnings – the first to include sales of its latest iPhone – on Monday.
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