Matt Levine, Columnist

Carl Icahn Thinks Apple Should Buy Some Stock

How do anomalies work? How do mutual funds work? How do activist hedge funds work? That last one is simple!

October 9, 2014 at 3:14 PM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

Provide news feedback or report an error

Site feedback:

Take our Survey

Here is Carl Icahn's very interesting letter to Apple! It is very interesting! No, come on, it's silly. Carl Icahn has long had an idea for Apple. The idea is that Apple should buy back a ton of stock. This idea is not original to him. Lots of people have thought this. Most of them are Apple shareholders. The idea is, if you own some stuff, and someone else buys a lot of that stuff, then the price of that stuff goes up, and you are now richer.1 Apple shareholders, like most people, want to be richer. There's nothing wrong with that. In fact, Apple agrees, and is buying back a ton of stock. Icahn just wants it to buy more, quicker.

But here is the structure of Icahn's argument: