Billionaire Carl Icahn, who announced in August that he owns $1 billion in Apple (NASDAQ:AAPL) shares, said Tuesday that he met with Apple chief executive officer, Tim Cook, and insisted that the company should spend $150 billion to buy back its own stock.
“We argued very hard for it, we think it’s a no brainer,” Icahn said of his buyback plan after the meeting with Cook that took place at Icahn’s apartment in New York. This was their first meeting in person.
Discussions will resume in about three weeks, said Icahn, an investor who specializes in convincing companies to make changes in order to increase shareholder profits.
Cook announced this year a payment plan of dividends and repurchases of shares worth $100 billion by 2015. But Icahn wants Apple to spend another $150 billion on stock repurchase.
Apple announced in July that in the second quarter it purchased from the market shares worth $16 billion. IPhone manufacturer was sitting in late June on $146.6 billion in cash and investments.
“Had a cordial dinner with Tim last night,” reads an Icahn Twitter posting. “We pushed hard for a $150 billion buyback. We decided to continue dialogue in about three weeks,” he continues.
Icahn considers that Apple’s stock could go up to $625 if the company buys back shares and wants Apple to borrow the money at 3% interest rate and avoid paying more taxes.
Apple co-founder Steve Jobs has resisted calls to return money to shareholders, but Cook was willing to meet the demands of investors. In February, hedge fund manager David Einhorn called for Apple to return money to shareholders and then sued the company to increase shareholder returns. In April, Apple has increased its dividend and buyback plan to $100 billion.
Apple shares are up 2% to $487.21 per unit on the stock exchange in New York. Apple’s market capitalization is $442 billion.
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