Carl Icahn to Apple: It’s not you, it’s China

Apple, which had already lost billions in market value since it reported earnings Tuesday, is falling further after activist investor Carl Icahn on Thursday said he has dumped his whole stake in the company because he’s concerned about its prospects in China.

In an interview with CNBC’ s “Power Lunch,” Icahn called the Cupertino company “great” but said he is worried that China’s government could “make it very difficult for Apple to sell there.”

Apple on Tuesday reported its first year-over-year quarterly revenue decline in 13 years, including an 11 percent drop in iPhone sales in China. In addition, Apple’s iTunes and iBooks were shut down in China, six months after their debut there.

“You worry a little bit — and maybe more than a little — about China’s attitude,” Icahn told CNBC, which noted that Apple CEO Tim Cook and CFO Luca Maestri both told the TV station earlier this week that they were optimistic about their business in China.

China, of course, is a key market for all global companies because it’s still largely untapped. It’s a priority for companies such as Apple, whose most important product — the iPhone — has begun to see sales leveling off in markets such as the United States.

Apple is one of the Silicon Valley tech companies Icahn has targeted in recent years. In 2014, he disclosed he had amassed a $3 billion stake in the company, and pressured it to do a stock buyback. At the end of last year, Icahn reportedly owned 45.8 million Apple shares.

Icahn might have sold all his shares in the company, but he still has high praise for Cook et al: “In Apple today as opposed to six months or a year ago, in this one, there’s no need for activism because I think they have a great management.” He said he’d consider buying Apple shares again if China “was basically steadied.”

Apple shares have fallen about 11 percent since it reported financial results Tuesday. They have pared some of their losses early Friday, and are down under 1.4 percent to $93.55.

 

Photo: Carl Icahn in 2007. (AP/Mark Lennihan)

 

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  • USMC 8th and I

    China may be a communist-run country but, I’m sure they could teach the USA a few tricks when it comes to Capitalism….. Chinese love the Apple products so, I see this as a lull……..NOT the end……

  • USMC 8th and I

    China may be a communist-run country but, I’m sure they could teach the USA a few tricks when it comes to Capitalism….. Chinese love the Apple products so, I see this as a lull……..NOT the end……

    • Willis James

      The next 5 years in the Chinese economy is very likely to anything but a lull.
      They keep reporting 6.5% and above growth, when most experts suggest those figures are highly inflated. I’d say they face a 50/50 chance of a actual recession wherein they get a few years of lower GDP…
      During that time, premium products such as Apple’s will suffer significant declines.
      Anyone and everyone is trying to get as much money out of China as they can, as quickly as they can.
      Simply put, the Chinese people with money want to hedge their bets by getting good portions of their wealth out of China.
      Thus the huge real estate investment in California houses…
      A significant devaluation of the currency is almost a given. That amounts to a overnight loss of savings… and will make Apple products even more expensive.

    • Willis James

      The next 5 years in the Chinese economy is very likely to anything but a lull.
      They keep reporting 6.5% and above growth, when most experts suggest those figures are highly inflated. I’d say they face a 50/50 chance of a actual recession wherein they get a few years of lower GDP…
      During that time, premium products such as Apple’s will suffer significant declines.
      Anyone and everyone is trying to get as much money out of China as they can, as quickly as they can.
      Simply put, the Chinese people with money want to hedge their bets by getting good portions of their wealth out of China.
      Thus the huge real estate investment in California houses…
      A significant devaluation of the currency is almost a given. That amounts to a overnight loss of savings… and will make Apple products even more expensive.

      • TrickyDickie

        “premium products” lol!

  • Wes

    Carl knows Trump, China may resort to payback under Trump. Is that what Ican really meant?

 
 
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