Icahn: Apple `Undervalued,' Look at the Numbers

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Sept. 9 (Bloomberg) -- Billionaire Carl Icahn discusses giving up the Dell fight and his outlook for Apple, J.C. Penney and Netflix with Trish Regan on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Thanks very much.

Are you still seeking appraisal?

We think it is undervalued.

We plan to go for an appraisal.

Aren't you rolling the dice?

You already made money.

What if it does decide the company is worth less than what michael dell and silver lake are paying?

Usually, that does not happen.

Usually these appraisals work out pretty well.

We think that it is worth -- we do have the right to give the appraisal rights for 60 days after the merger goes through.

We have a fair amount of time to decide.

From our point of view, it is almost a no-brainer to decide later if we are going to do it.

-- how much do you think it is worth?

What would you like to see a judge decide?

I have not really thought that out.

We are in 10 deals right now.

From our point of view, while we lost and i am somewhat saddened by that, we came out making a fair amount of money, we did the work the board should have done.

The board acted in a horrendous way.

They caved in.

I congratulated michael.

I think he did it out of self- interest, which will make some sense.

Why he just gave the company -- why the board just gave the company away, did not even do a true auction -- it's beyond me.

I have said it publicly.

It took us to raise it $500 million, $600 million more.

If you buy a painting that's other bees -- at somebody's -- a t sotheby's, the painting is scratched, don't bid.

There is no corporate democracy.

As a country, we pride ourselves on democracy him and yet it is a dysfunctional corporate governance system -- on democracy, and yet it is a dysfunctional corporate governance system.

If it was changed, i'm hopeful that, with twitter, there may be enough chance to raise enough people to awareness about this am a if it would change, this country would be a lot more productive.

There would be a lot more jobs because executives would have to be accountable.

Ceo's would have to be accountable.

You could replace them.

There is none of that.

This is sort of a vicious cycle that goes on.

It sounds tremendously corny.

I came from queens.

Tough neighborhood.

We had very little money.

My mother was a schoolteacher.

And i done -- i have done so well because it is a great country and democracy is a great system when you have it.

While our political system lacks somewhat, it is nothing like this corporate system.

The reason i make so much money or one of the major reasons is because once you get into these companies and cleanup the mess, there is so much more value.

Look at this board.

They are horrendous.

Do you think that southeast will join you in seeking appraisal?

That is completely their business.

It does not matter to me whether they join or not.

If you go for appraisal, you go for appraisal.

It does not mean if more people join you it is plus or minus.

We have not made a final decision on appraisal.

But we have done a lot of work on it.

We think that it is worth a lot more.

But that could change.

We have time to change our minds on that.

As you said, 60 days after the deal closes.

Why are you so fixated on the appraisal?

I'm curious.

Is there anything michael dell and silver lake could do to sweeten the deal so that you would say -- because they are rolling the dice.

That is true for anybody going for appraisal.

It has nothing to do with me.

We are sort of done now.

I think it is fatal complete -- it is fait accompli.

On paper, you have made money on this deal in terms of profit.

Any sense how much?

It is tough to say.

They gave a lot of extra dividends and what have you.

It has been a bit complex.

I think you could figure it out.

I don't think i should be talking about it.

We did all right.

That is not the issue.

I think the issue really is how you can -- this is tantamount -- i think what happened here is tantamount to a dictatorship.

A dictatorship does not call meetings.

Maybe they will have one more election.

These guys just kept going with it.

Are you calling michael dell a dictator?

I think michael dell was smart.

I congratulate him.

I think the board was horrendous.

That's what i have said.

And this guy did a terrible job, in my opinion.

But michael dell, i congratulate.

So the board is a dictatorship -- so, the board is a dictatorship?

They follow the laws, but the laws allow you to do what they did.

I'm not even arguing what the judge said.

We are going -- on twitter, i give my investment insight.

Follow me on twitter.

If they had followed me on apple, they would have made a lot of money.

That's right.

You released a lot of news on twitter, including that you are not going to keep pursuing michael dell in terms of trying to defeat him.

Apple is having a big day tomorrow.

A big product launch.

What are you hoping to see?

I think apple is undervalued.

If you just look at the numbers.

The products are great.

I'm not a technology guy.

But i think their numbers -- they are so cheap relative to their numbers that -- when i recommended it on twitter or said that we owned it, we owned it cheaper than that.

But it is still up 50 points.

You get these sort of no- brainers.

Dell is not a no-brainer.

Dell does have problems.

But apple did not.

Netflix did not.

I am doing this on twitter, getting my insights, because i want to build the following.

If you have enough people , they are going to be -- critical mass.

Maybe something can be done with this horrible barack received -- horrible iraq received that exists -- horrible bureaucracy that exists.

I think we should not have this.

One of the things that -- they spend shareholders' money like in the feudal system.

The bearing would have a castle.

-- the bearing -- the baron would have a castle.

He would use the army to get money.

I've made a lot of money doing this.

But i will tell you this, if we don't change, we are going to become a second-rate country.

That's one of the reasons we are not competitive.

That's one of the reasons things have to change.

I hope we can accomplish something along these lines.

I really do care.

You have $150 billion worth of buyback at apple.

How realistic do you think that is?

Have you talked to tim cook lately about that?

You read what i said to tim cook lately.

We are going to have a meeting and have dinner.

When was the last time you talked to him question mark -- talked to him?

You should read twitter.

You told me to follow you.

Why don't you read twitter instead of asking me now?

I know you are supposed to have dinner with him.

When is it going to happen?

I said it is going to happen this month.

Good.

Ok.

sometime this month.

A lot of people -- let's move onto another stock that i would be curious to get your thoughts on.

A lot of people have been getting into jeff -- into jcpenney in the last week now that bill ackman is out.

Is this a company you look at?

No.

i think that is a company that is very hard to read which way it will go.

So, i have no comment on that.

What about netflix?

We still own it.

We have not sold a share.

Netflix in the -- is another one of those things that was a no- brainer back when it was 58. i still think it is a good buy.

We do think that it has a great model.

They start the year with 2.5 billion dollars flowing into them.

It is hard to beat that an hard to compete with that.

That's the thing i think a lot of analysts miss.

It is a monetary thing.

You have so much money coming in.

People love it.

Reed hastings is doing a great job.

He has done a great job so far.

I hope you will continue to do so.

We will be watching.

We will keep an eye on your twitter account.

Trish, i want you to read it.

I do, carl.

Every day.

Thnaks -- thanks so much, carl icahn.

Back over to you.

Thank you.

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

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