Carl Icahn Sells Entire Stake in Apple Due to Concerns in China

Icahn Sells Stake Apple

Carl Icahn is no longer a shareholder of Apple Inc. (NASDAQ:AAPL). The activist investor disclosed that he sold his remaining stake in the iPhone maker during an interview with CNBC’s Power Lunch on Thursday.

Icahn Sells Stake Apple

“We no longer have a position in Apple. We obviously made a great deal of money,” said Icahn. He added Apple is great company and its CEO Tim Cook is “going a great job.”

Icahn acquired a stake in Apple in August 2013 and pushed Cook to return more of the company’s increasing cash pile to shareholders. The iPhone maker boosted its stock buyback program and raised it dividends. The stock price of Apple climbed 38% in 2014 primarily due to its capital return program.

Icahn exited Apple because of China

The activist investor previously owned less the 1% of the outstanding shares of the iPhone maker. He started reducing his stake in Apple during the fourth quarter, before its stock price began decline on concerns that China may no longer drive its sales growth and the smartphone market is becoming saturated.

“You worry a little bit — and maybe more than a little — about China’s attitude.” He added that the Chinese government could “come in and make it very difficult for Apple to sell there…” According to him, China’s attitude towards Apple was the primary reason for his decision to exit his position in the company.

Apple stock sell-off

Icahn made the disclosure after Apple reported on Tuesday that its second-quarter revenue declined 13% to $50.6 billion. It’s the first time for the company to report a revenue decline since 2003.

The company’s earnings were $1.90 per share, down from $2.33 per share in the same period a year earlier.

During the quarter, Apple sold 51.2 million iPhones, down from 61.2 million a year ago.

Investors were disappointed with Apple’s financial performance, which prompted them to sell-off their stakes in the company. On Tuesday, Apple shares dropped 8% and 6 the following day. Today, the company’s stock closed $94.81 per share, down by 3%.

According to Icahn, Apple shares are still “very cheap on a multiple basis.”

Related posts

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.