Why Did Carl Icahn Buy Apple?
It's still not clear to me what makes everyone here think that this is Carl Icahn manipulating a stock for short term gains rather than Carl Icahn making a purchase that he deems likely to provide a good intermediate-term returns. Whatever sort of investor he is, I think it's likely the case that he would prefer to see durable 50% gains in Apple over the course of two years vs. 5% gains over the course of two months. It's not easy to find secure places to stash billions of dollars in this market with the expectation for outsized returns of the sort I think Apple might deliver. Why poison his own well for a few percent in the short term?
He may be a lot of unsavory things, but stupid and short sighted ain't one.
Furthermore, I remain of the opinion that Carl Icahn is simply too small to nudge Apple in any appreciable way and that earnings and value remain the key drivers here. As opposed to some sort of manipulation, why can't his purchase just a slap in the face to a market that very often fails to see values in the most obvious of places?
He famously made a fantastic investment in Netflix very near a bottom causing a huge pop in share price and Netflix is still around. That purchase was a vastly larger percentage of the entire company than this one and doesn't Icahn still own the entire position? Rather than acting like a bandit and collecting short term gains at the expense of fools, he made out like a real bandit by picking a great company, loading up and sitting on it. Unsurprisingly, the company's growth and stellar results have powered the stock forward, not Carl Icahn. The same will certainly be the case for Apple, where I expect results to dictate movement in the price.
If things get ugly and people start clamoring for the exits, I think it'd be a lot more likely that this is precipitated by calamitous business outcomes than by Carl Icahn's comparatively irrelevant movements.
Is it the fanfare that has people so sour? He has to file a 13F so it's not like it would have stayed a secret long, plus Twitter was approved by the SEC for legal disclosures so what's the big deal?
I don't think Icahn is here to pillage, I don't think he could if he wanted to and I don't think he can have any lasting effect on the price that won't be overwhelmed by the company's performance. I also don't think that this is an opportune exit.
The market may like/dislike Apple's announcement on the 10th and if the stock rises/falls as a result it will be none of Carl Icahn's doing. I'm more interested in September 10th, 2015 than September 10th 2013. I think that this is an outstanding position for the next couple years and if I'm right, both Carl Icahn and I will be laughing all the way to the bank.
Disclosure: I own Apple. Duh.