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Icahn sells Apple stake

April 29, 2016

Shares in the US tech giant have extended losses, which were caused by weaker-than-expected quarterly results but were aggravated after investor tycoon Carl Icahn said he had sold his entire stake in the company.

Carl Icahn
Image: Reuters

Billionaire investor Carl Icahn sent US stocks reeling Thursday after announcing he had liquidated his investment in Apple - the biggest factor of Thursday's more than 200-point drop on Wall Street.

Icahn told US cable television network CNBC he had sold his entire stock of 45.8 million shares in Apple because of concerns about the company's relationship with China.

"You worry a little bit, and maybe more than a little, about China's attitude," Icahn said. The Chinese government could "come in and make it very difficult for Apple to sell there," he added.

Earlier this month, China shut down Apple's iTunes movies and iBooks stores within the country, following Beijing's introduction of regulations in March imposing strict curbs on online publishing, particularly for foreign firms.

Asked when he might get back in, Icahn replied: "I don't think it's the price point. I think it's my opinion about what is happening with China. I think the stock is very cheap on a multiple basis. China could be a shadow for it, and we have to look at that."

Apple bets on China for growth

Profitable exit

Icahn suggested he made roughly $2 billion (1.7 billion euros) off the Apple trade, after buying his stake three years ago and receiving a 48 to 50 percent total return. "We obviously made a great deal of money, but it was no surprise that we got out of some in February."

Apparently, he reduced his holding just before the company's shares started to slide this year on concerns that the smartphone market is becoming saturated and that China will no longer fuel sales growth.

"We have this huge profit so by definition it's not the no-brainer it was. But two, if China was basically steady I would probably go back into Apple," he said, and added that he still viewed Apple as a great company with great management. "Tim Cook did a great job. I called him this morning to tell him that and he was a little sorry, obviously. But I told him it's a great company."

Icahn has repeatedly pushed Apple chief Tim Cook to return more of the company's ballooning cash pile to investors. The iPhone maker stepped up its share buybacks and increased dividends, helping to fuel a 38-percent share rally in 2014. That petered out in 2015, when Apple shares declined by 4.6 percent.

On Wednesday, Apple said sales for the three months ended March 26 dropped 13 percent to $50.6 billion, ending a streak of 51 consecutive quarters of uninterrupted growth.

uhe/cjc (dpa, Reuters, AFP)