Billionaire investment agitator Carl Icahn today again pressed Apple's CEO Tim Cook to boost the firm's stock buyback program, arguing that the stock is undervalued.
Unlike Icahn's earlier campaigns, the open letter he wrote to Cook -- a Faulknerian 4,200 words -- did not put a number to what he wants Apple to spend in buying back shares.
"We think a tender offer is simply a good method of conducting a large repurchase in an expedited timeframe, but the exact method and the exact size is not the key issue for us," Icahn wrote. "We are simply asking you to help us convince the board to repurchase a lot more, and sooner."
A tender offer is one made to shareholders to buy their shares at a specific price, usually at a premium, and is most familiar as a way to acquire shares during a takeover. Previously, Apple has repurchased shares on the open market.
Apple has already committed to spending $90 billion on its buyback program, and upped the amount from $60 billion as recently as April. Those moneys are to be spent by the end of 2015. As of June 30, Apple had spent $51 billion.
But Icahn wants more.
"We believe Apple remains dramatically undervalued," said Icahn, contending that now is "a very opportunistic time" to repurchase shares. According to Icahn's analysis, Apple shares should trade at $203; as of mid-day Thursday, shares were up about 0.6% to $101.42.
He forecast impressive revenue growth over the next three years, pegging gains at 25% for fiscal year 2015 and at 21% for the next two years each. Those revenue increases will come not only from the just-launched iPhone 6 and iPhone 6 Plus, but also from new-but-not-released products, like Apple Watch, as well as expected-but-not-announced products such as the long-rumored Apple smart television.
"We expect Apple will take premium [smartphone] market share, while at the same time maintaining its prices and gross margins, proving the concept of commoditization is nothing more than a myth with regards to Apple," Icahn said.
Icahn again cited Apple's cash horde as a reason for repurchasing shares, calling it "persistently excessive liquidity" that needs to be put to work. As of the end of the June quarter, Apple had more than $164 billion in cash and short- and long-term securities.
Icahn launched his Apple campaign in August 2013 when he announced he had taken a "large position" in the company. He agitated through the rest of last year for a bigger buyback deal that included a threat of a proxy fight if his idea for a $150 billion plan wasn't implemented, but threw in the towel -- in hindsight, only temporarily -- in February 2014 after an influential research firm told its institutional clients that it believed Apple had done enough.
Apple was, as usual, non-committal to Icahn's plea. "As we've said before, we will review the program annually and take into account the input from all of our shareholders," the company told the Wall Street Journal (subscription required) in its stock response.
But Icahn took personal credit for Apple adding more to the buyback kitty. "We don't think anyone would deny that we were a key influence with respect to your previous decision to increase share repurchases," his letter read.
Icahn has been on a tear lately, having pushed eBay earlier this year to spin off its PayPal service -- the idea was first rejected by eBay, but plans to do just that were announced last month -- and raked in $200 million after he rattled Family Dollar's management.
Icahn said he owns about 53 million shares of Apple; those shares would be worth approximately $5.3 billion at yesterday's closing price.