Premature liquidation: Carl Icahn dumped Apple $3.7 billion too early

From friend-of-the-blog Chuck Jones, writing for Forbes:

Carl Icahn was very visible when he owned Apple shares. He met with Tim Cook, Apple’s CEO, and wrote letters and analysis that he posted on his website. His first public announcement was on August 13, 2013 with two tweets saying he had a large position in Apple, had talked with Cook and that a large buyback should be done now since he believed that the stock was extremely undervalued…

On April 28, 2016, Icahn announced that he had sold all of his 52 million plus shares making about a $2 billion profit. He said he sold based on concerns regarding China which I delved into. From my calculations on the 52 million plus shares he sold them for about $105…

Unfortunately for Icahn he sold a year plus too early. While the stock traded down to the $90’s just after he sold, the shares have been on an upward move since then as can be seen on the StockCharts.com chart below.

Since Carl Icahn bought

If Icahn had held onto all his shares the difference between what he sold them for, about $5.5 billion, would now be worth $9.2 billion or $3.7 billion in additional profit.

My take: Icahn was never really interested in the company; what he cared about was its cash hoard.

See also: The Carl Icahn effect. 

4 Comments

  1. David Emery said:

    Couldn’t happen to a nicer guy! 🙂

    3
    November 13, 2017
  2. Gregg Thurman said:

    Woulda, shoulda, coulda blah, blah, blah

    Icahn made a $2 Billion dollar profit from his investment in AAPL.

    I can’t count the times I left profit on the table to lock in the profit I had already made.

    Icahn has nothing to be sorry about.

    1
    November 13, 2017
  3. Ken Cheng said:

    Opportunity cost. So, what Carl lost out on making $3.5B after selling his Apple shares, he could have used that money to buy something like, Facebook which made 62% instead of Apple’s 65%; or he could have bought Microsoft which also made 62%, or he could have bought Amazon which made 82%, or he might have bought Nvidia which has made 486% in that timeframe. Note, I have not included dividends which factor into an investor’s returns. I’m sure Carl doesn’t regret his sale. He did predict $210 or so in his analysis, which the talking heads at CNBC laughed about, but it seems that most analysts are now predicting the same range. I’m sure he has no regrets.

    1
    November 14, 2017
  4. David Drinkwater said:

    What Carl Icahn cared about with respect to Apple was himself. Whether that was worth $3.7 billion in advertising I don’t know.

    2
    November 14, 2017

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