Apple May Be Too Big for Icahn to Fight: Ritholtz

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Oct. 25 (Bloomberg) -- Barry Ritholtz, Editor at “The Big Picture” blog and Hardeep Walia, CEO at Motif Investing, discuss the activist moves by billionaire investor Carl Icahn and whether he can actually affect change at Apple. They speak on Bloomberg Television’s “Bloomberg Surveillance.”

Media -- now he has a website.

Easy changing roles -- is he changing the rules?


this is what activist investors have done for years.

But instead of going after a smaller company or potentially on the rocks and having a substantial number of shorts in it, a vulnerable company, carl icahn is going after the white whale.

They see $150 billion in cash sitting there and that is just a giant pile of money that is a resistible.

Almost making as much of a splash is a tweet from pimco.

Calling out carl icahn and spending more time like bill gates.

There's this perception that he is just in it for the short- term, in it to win it.

Do you agree with?

Carl icahn has always struck me as a very smart guy who was married to his work.

He is never going to retire.

I don't see carl icahn playing golf or fishing or chilling out.

This is what he loves to do.

That said, he may have bitten off a little more than he could chew with apple.

This happened not too long ago with david einhorn.

It has happened with other hedge fund managers.

They say, you should do something with your pile of cash.

To be blunt, stock buybacks are among the least productive ways that countries can invest their money for the long-term.

If you were saying, you guys need to pour money into research and development or you are rich enough, maybe you might want to raise your dividends a little bit because you become a value stock -- that is a very different argument.

Look at companies like dow -- dell.

They have rued the day that they spent that money.

Dell spend more money on share buybacks than they made on profits.

To your bullishness, all of these companies have walls of cash -- there's a thing called eminem theory -- m and m theory.

An intelligent use of cash -- maybe it doesn't matter.

As carl icahn writes, it is our money.

Which way is it?

It is a lot of johnny-come- lately have taken the position in apple -- it is not their money.

It is the shareholders' who have been sitting there for a decade or longer.

We were initially buyers of apple when we were mocked and it was single digit so long ago.

I would like to say we held onto our shares is whole time but we didn't. a lot of people suddenly want to tell arguably the most successful tech company in the world, a here is how you should do it.

Where were you when everyone thought apple was going out of business?

At this point, in terms of what icon is doing, it is a big pile of money and he is looking to grab some.

A big pile of money.

When you look at carl icahn and what he does, he is also investing in netflix and had famously told everyone that he is selling more than half of his stake.

Would you look at his track record with other companies -- he has been very clear about that.

There is a role for activism.

You have to understand that technology is different.

You are one move away -- there is a reason that microsoft and apple put cash on their things.

That much cash?

You would be surprised.

A lot of people want to have the freedom to implement.

You never know when you will make a misstep.

It is nice to have that cash.

Think about blockbuster.

That was a company where they gutted it.

Carl icahn gutted it.

That was a bad call.

Warren buffett takes -- stays away from tech.

I have microsoft wishing $80 billion of cash and short-term investments.

There is not a management textbook that says that is justified.

What are they going to buy?

Ford motors?

There are a lot of companies out there.

Look at amazon, the kind of investments they are doing.

Tech changes.

I want to wrap it up.

. final thought from barry.

Now that carl icahn is launching these multimedia activist attacks demanding cash -- technology or not -- should other ceos be nervous?

If you have lagged the market in terms of innovation, if your stock price is not up 16,000% over the past decade, you better pay attention.

If you're apple or any of the other really successful tech companies that have a war chest -- everybody forgets, apple in 1998, was on death's store.

They have never done the acquisition.

I would not be surprised to see them start kicking other tires rather than do a share buyback.

Companies like twitter or netflix i'd make a strategic fit.

I am not suggesting those two.

There are a lot of companies that could help burnish what apple does.

It is good perspective.

They rewritten holtz -- barry ritholtz, good to have you here.

Spending on everything, it is not just movies.

They are really ripping it up -- they are a different business . they are building a phenomenal machine.

They are building for the future.

I am just saying, if you go to a 15% dividend growth -- something reasonable.

I have been in tech for a long time and i know you make one misstep, you have to catch

This text has been automatically generated. It may not be 100% accurate.


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