Billionaire activist investor Carl Icahn has sold his entire shares in Apple Inc. (NASDAQ:AAPL) citing instability of the Chinese market as one of his reasons.
Carl Icahn also gave the US market as a reason and he said a fiscal stimulus was needed because he was cautious about the market. He has been one of the big fans of Apple, since buying shares three years ago, which he called a ‘no brainer’ buy at the time.
The billionaire said he was worried about the Chinese regime putting on tough regulations for companies like Apple. According to him, other firms such as Samsung had greater chances of making it in environments like that because they had a country’s full backing behind them. He said his main worry was the relationship between Apple and China itself. If China for some reason decided to bring on tough regulation on Apple, then that would definitely affect Apple’s numbers in the interim. He also called the Chinese government a “benevolent” dictatorship.
Carl Icahn previously argued in an open letter to the Apple Chief, Tim Cook, back in May 2015, that he thought the Apple shares were supposed to go for $240, a 90 percent jump on what they were trading at the time. At the price he suggested, Apple’s market cap would be around $1.4 trillion, Icahn said.
Carl Icahn has however gone on to sell his shares, which numbered 45.8 million shares by the end of last year. He said he was worried about slowdown in China’s growth, and indications that the Chinese government might become more prohibitive in the future.
“We no longer have a position in Apple,” he said. “Tim Cook did a great job. I called him this morning to tell him that and he was a little sorry, obviously. But I told him it’s a great company.
He also went on to stress that he might be leaving and selling shares, but the company was in good hands with Tim Cook at the helm of the company. He stressed there was no need for any activism there because the firm had the best leadership and was headed in the right direction.
When the activist investor about whether he would consider coming back to the second most valuable company, Apple, or not and if so when he mentioned that for him it was not about the price point. He then went to bring up China again saying the instability of what was going on in China was too much for him at the moment. According to him, the stock is cheap on multiple basis, and China is possibly a shadow for it, so he says.
During Icahn’s interview, Apple shares fell under more pressure as they closed more than 3 percent at $94.83. The Dow Jones industrials were also under much pressure and by the close of the day were down by 210 points.
The news comes days after Apple posted its first decline in iPhone sales in their quarterly fiscal report. It was also Apple’s first revenue drop in near 13 years. Apple’s shares have now declined by 10 percent this week.