Icahn Lab Conference Room (Photo credit: Joe Shlabotnik)

Carl Icahn Invests in Apple Inc.

It wasn’t too long ago that the drop in Apple stock seemed like it would not stop as the price dropped all the way down to $400 a share after the death of legendary CEO Steve Jobs. Now the stock has turned the corner and is on the way back up, but to $700 is a level that not many are predicting. Carl Icahn does feel good about $600 a share and invested 1.5 billion in the stock recently. Icahn feels that the stock is easily worth $625 even without any growth in earnings. In addition to investing in the stock he has spoken with the current CEO, Tim Cook, trying to get the company to purchase more of their shares back from the public.

Icahn wants the company to borrow at a low interest rate and purchase back shares from the open market. The company could purchase a large number of shares at $525. Another investor, David Einhorn, was able to get the company to do just what Icahn wants them to do, purchase back shares earlier this year. Icahn wants them to do more now.

In addition to the share buyback plans, Apple is rumored to be ready to release the next version of its more popular product, the iPhone. A new revenue stream coming from the release should push the stock higher with or without the share repurchase. In addition, the Christmas season in the US is quickly approaching which should mean great sales all of Apple products including the iPhone, the iPad, the iPod, and the Mac. The stock has remained strong the last couple of trading sessions as the overall market has become soft. Demand is strong at this time for shares and the fall should be positive for Apple investors.