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Apple iPhone

Billionaire to the rescue: Apple stocks climb with new cash injection

Apple iPhone

Mich Atagana
Mich started out life wanting to be a theoretical physicist but soon realized that mathematics was required. So, she promptly let go of that dream. She then... More

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Things are looking a lot better for Apple right now than they did a little while ago. The company seems to have just cracked the ceiling of its dismal stock imprisonment after hitting US$500: the highest Apple stocks have been in eight months.

The latest success has everything to do with billionaire Carl Icahn‘s decision to buy one-billion dollar stake in the company. The billionaire told the world about his stake in Apple in two tweets:



When Carl Icahn says he is talking to CEO Tim Cook and has a large position in a company you take notice and share prices climb. With an estimated net worth of US$20-billion, he has made significant investments in many companies including Time Warner, Motorola, and Herbalife.

Icahn believes that Apple is undervalued and believes the stock could be worth as much as US$700 a share if Cook pushed for a larger stock buyback — US$150-billion to be precise.

“If Apple does this now and earnings increase at only 10%, the stock — even keeping the same multiple currently — should trade at $700 a share,” Icahn is quoted as saying by the Financial Times. He also says that the company has “huge borrowing power, little relative debt and trades at a low multiple.”

Apple has had a less than impressive couple of months. The company’s last quarterly report showed that its sales are up only one percent from last year to US$35.3-billion, landing the company a net profit of US$6.9-billion, or US$7.47 per diluted share.

It seems thing may be looking up for the Cupertino-based giant.