By Dow Jones Business News,
February 10, 2014, 11:32:00 AM EDT
By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Apple Inc. started the week off in the tech sector spotlight Monday with the company's
stock price getting a small lift after billionaire activist investor Carl Icahn said he would drop his efforts aimed at
getting Apple to buy back an additional $50 billion of the company's stock.
In an open letter to Apple ( AAPL ) shareholders, Icahn said Monday that he was "supportive" of Apple's recent
repurchases of $14 billion worth of its stock over the last two weeks. Icahn issued his letter a day after proxy
advisement Institutional Shareholder Services came out against a non-binding proposal from Icahn that called on Apple to
add another $50 billion to its stock-buyback plan. Last year, Apple said it would return $100 billion to its
shareholders over three years, including $60 billion in stock repurchases.
Icahn said that as a result of Apple's buybacks, and the recommendation of ISS, "we see no reason to persist with our
non-binding proposal, especially when the company is already so close to fulfilling our requested repurchase target."
Icahn also recently said that he had purchased $500 million more of Apple's stock, bringing his stake in the company
to more than $3 billion. Since divulging his initial Apple investment in August 2013, Apple's stock price has risen
Analyst Robert Cihra, of Evercore Partners, said the end of Icahn's efforts came down to arguing just how much is
enough for Apple to return to shareholders from its approximately $160 billion cash reserve.
"I think it was one thing to argue, justifiably, for Apple to start returning some of its massive cash pile back to
shareholders as dividends and buybacks a couple of years ago when it was giving back nothing," Cihra said. "But having
now added and even increased its buybacks and dividends over the past year, I'm not sure calls for "more, more" carry
the same weight."
In addition to Apple, another notable tech gainer was Yelp Inc. ( YELP ), which rose almost 4%, to $92.59 a share.
Yelp got a lift following a report in the Wall Street Journal said the company is entering a new partnership with
Yahoo Inc. ( YHOO ) in which Yahoo will incorporate Yelp's listings and reviews of local businesses into Yahoo's search
results. Yelp also has similar deal in place with apple and Microsoft Corp.
The overall tech sector was showing mild gains, as the Nasdaq Composite Index (RIXF) rose almost 7 points to 4,132
and the Philadelphia Semiconductor Index (SOX) edged into positive territory.
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