The iCahn iMpact on the Apple share price

What is going on with the Apple share price? Over the last five trading sessions the stock is up 7.21 percent. Over the last month the stock is up 16.88 percent, but year to date the stock is down 6.33 percent. And last evening the stock went through the 500 Dollar mark for the first time. Marc Ashton, who's day and night job is the editor of Finweek, tweeted an article from the BusinessInsider that he thought we might enjoy. And we sure did, thanks! It is an opinion piece from the founder of the now hugely popular finance website/blog, the Businessinsider's Henry Blodget: Can Someone At Apple Please Tell Tim Cook That He Doesn't Have To Waste Time Talking To Investors?


That is almost the same way that I felt about it when I heard that Carl Icahn had taken a billion Dollar position in Apple. In fact, he announced it on Twitter:





Two things, I don't follow Carl Icahn, I am sure he is wildly interesting, but he would hardly interact with anyone as he follows only 6 people. One way tweets! BUT.... the second thing is the power of twitter and more importantly, one of the original corporate raiders. This was the impact shortly after the tweet, no, immediately after the tweet:





What this graph shows is from Google finance I have zoomed in to the actual time of the announcement. Notice the jump in volumes and price, indicating that people (naturally) take Icahn's trading prowess really seriously. Why not, he has made himself and the rest of his investor fabulously wealthy and now falls into the class of celebrity investor, if there is such a thing.

When we discussed it briefly in the office here yesterday morning, Byron's parting shot was something along the lines: "And of course that has nothing to do with the business and everything to do with the share price". I don't know whether Icahn has a two month or two year time frame, or even two weeks, I have no idea of knowing that!


But the point that Blodget was trying to make is that he, as a smaller shareholder, he doesn't have access to Tim Cook. And he would prefer if Cook and the team (too many cooks spoil the broth) continued to focus on the business. Blodget would prefer to see the company find a new head of the retail division. The ex head of Apple retail Ron Johnson has lost/left his job at JC Penney, that disaster and another corporate stirrer, Bill Ackman is taking pain there, that is another story and I am sure that it thrills Carl Icahn secretly, as he is having a feud with Ackman.


I am not too sure that I agree with Blodget however. As a shareholder, not a massive one, around one quarter of a percent of the company, Icahn should possibly have access to the board. After all, he owns some of the business and therefore the board does answer to the owners. Where I do agree with Blodget however, is that Tim Cook and his team mustn't pander to all the needs of their shareholders at every twist and turn. They (the shareholders) can make their grievances known at the AGM, through the correct channels.


Icahn is a rabble rouser, but his ilk are much needed to just remind the powers that be who owns the business. BUT, I am very, very sure that through improved governance, most listed businesses act on this basis. The correct channels are not old Carl Icahn calling Tim Cook to tell him what he thinks that he should be doing. For a short term boost in the price, that is why Blodget is against this access to top brass. I suppose that Icahn earned it.