Billionaire Icahn Exits Apple Stake After Three Years

Has Apple's Hot Streak Come to an End?

Billionaire Carl Icahn, who first disclosed his stake in Apple Inc. almost three years ago, has sold out of his position because of concerns about the company’s relationship with China, the activist said Thursday.

“We no longer have a position in Apple,” Icahn told CNBC. Icahn sold most of his remaining stake in February, he said. “I got out because I’m worried about China.”

Icahn perceives a risk in Apple’s relationship with China and that made his already profitable investment in the company no longer a “no-brainer,” he said. China shut down Apple’s iTunes Movies and iBooks services recently, showing that the company isn’t immune to the reach of Beijing regulators.

“You worry a little bit, and maybe more than a little, about China’s attitude,” Icahn said. Apple has a good relationship with China, providing vast employment there, but also relies on the country for lots of sales, he said.

Apple shares declined 2.7 percent to $95.18 as of 3:10 p.m. in New York, giving the company a market value of about $521 billion. They dropped more than 7 percent this year through Wednesday.

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‘Huge Profit’

In the fourth quarter, Icahn sold 7 million Apple shares, leaving him with 45.8 million shares worth $4.8 billion, according to a February regulatory filing. 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, which he reiterated he viewed as a great company with great management. “I hope one day to get back into it.”

After disclosing his Apple stake in August 2013, Icahn pushed Chief Executive Officer 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 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.

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