Activist investor Carl Icahn has amassed a large stake in smartphone giant Apple and believes that if its CEO Tim Cook pressed for larger buyback of shares, the price of each share could be worth as much as $700.
Icahn, who values the company at more than $12bn, however didn’t disclose the size of the stake he bought in the company.
Industry experts estimate that Icahn may have bought $1bn worth of shares in Apple. Icahn also noted on Twitter that he had a positive discussion with Apple CEO Cook.
"We currently have a large position in Apple. We believe the company to be extremely undervalued," Icahn said on Twitter.
Icahn was quoted by Reuters as saying that Apple could presently go for a $150bn buyback by borrowing funds at 3 per cent.
This move may push up Apple’s stock value further. On Tuesday, Apple shares grew by almost 5 per cent to $489.57.
Scott Kessler of S&P Capital IQ told the Financial Times: “We believe Icahn’s position in, and potential role as an activist in, [Apple] could have a notable positive impact on the stock.”
Earlier in April, the company, best known for iPhone and iPad, is estimated to pay $100bn to shareholders by the end of 2015.
Apple in a statement said: “We appreciate the interest and investment of all our shareholders.”
The activist investor Icahn, who owns a 10 per cent stake in Netflix, was in a battle to acquire PC maker Dell in recent times.
The US fund manger Vanguard Group holds about 4.76 per cent of Apple stake.