Apple Inc to Receive Carl Icahn's $50B Buyback Proposal in Annual Company Meeting

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By Reissa Su | December 5, 2013 5:33 PM EST

Billionaire activist investor Carl Icahn has reportedly submitted a proposal for Apple Inc to buy back $50 billion worth of stocks. According to CNBC, a source said Mr Icahn will present the stock buyback proposal during Apple's annual shareholders meeting.

On Dec. 4, Mr Icahn posted on Twitter that he has informed Apple Inc of his intention to push for a vote for the company to increase its stock buyback program. In the tweet, he said he will be making a precatory proposal which is legally binding.

Mr Icahn had been urging Apple Inc to announce a $150 billion buyback program. The billionaire activist owns an estimated 0.5 per cent of outstanding shares based on data from Thomson Reuters. Following the news of Carl Icahn's proposal, Apple's stocks remained low.

According to Apple's statement, the company has already doubled its buyback program to $100 billion which also includes the biggest share buyback in history. The company said it is seeking the opinion of shareholders regarding the program as part of Apple's regular review process.

In Apple's previous statement in October, the board and management team had an ongoing discussion about the matter. Apple said it will announce any new change in the first quarter of calendar year 2014.

Apple Inc has surpassed its $500 billion market capitalization which is half the market cap predicted by analysts in 2012. Despite Apple's shares reaching a new peak price in 2013, the company's valuation remains the same to what it was in spring 2012. Analysts had previously predicted that Apple's market cap will double in a year.

Both Analysts Brian White of Topkea and Gene Munster of PiperJaffray predicted Apple reaching the $1,000 price per share target within a year. If the price target was achieved, this would have put Apple to have a valuation of almost $1 trillion.

Despite not meeting predictions, the analysts still think Apple's performance is worth noting. Apple Inc's rumored deal with China Mobile may only be one of the good news that the company has coming into the holiday season. The latest version of the iPhone, the iPhone 5S, still enjoy high demand from consumers wanting to purchase the device.

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