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Apple Inc.'s Tim Cook Will Not Be the Victim of an iCahn

By: Minyanville
Posted: 9/27/2013 12:55:00 PM
Referenced Stocks: AAPL;HLF

If Carl Icahn didn't exist, we'd have to invent him.

Uncle Carl -- as we affectionately call him here in the Buzz & Banter war room -- is loud, blustery, and doesn't care what you think.

He gloats over his victories, humiliates his rivals on national television, and is easily the most entertaining guest in the history of financial television, as evidenced by his legendary CNBC takedown of Bill Ackman over Herbalife ( HLF ).

Interestingly enough, Uncle Carl has taken a serious interest in Apple ( AAPL ), and in fact, he sent the stock up 5% on August 13 simply by tweeting that he had a large position in the stock, and that he had spoken to Tim Cook that day:

Uncle Carl followed up on August 22, saying that he and Cook were planning on having dinner in September. CNBC recently reported that this dinner is happening this Monday, which is generating some controversy.

Henry Blodget of Business Insider had this to say :

This incident should make crystal clear, in other words, that Carl Icahn and other big investors have a very significant "edge" over the rest of us. And in case we get tempted to play the trading game, we should remember who the suckers at the table are (us).

The second issue I have with the Cook-Icahn bromance is the reminder that Apple CEO Tim Cook is wasting his time having private conversations with investors.

Meanwhile, Barron's cited Trip Chowdhry of Global Equities Research, who believes that there are Reg FD (fair disclosure) concerns at hand:

1. Though Carl Icahn has announced he owns Apple stock, there is no certainty that he is net long Apple stock; 2. There is a perception among investors that Carl Icahn is actually net short Apple stock; 3. Hence, being in compliance with Reg FD, Apple should fully disclose all the past and future conversations with Carl Icahn to investors.

With all due respect to Blodget and Chowdhry, this is all much ado about nothing.

This dinner could not be more innocuous.

Let me tell you something: Tim Cook has been with Apple since 1998.

Now what does that mean?

Well, for one, it means that from 1998 until 2011, he dealt with the owner of what may have been the biggest ego in business history -- Steve Jobs.

So if you think Cook is going to bend to Icahn's will, think again. There is zero chance that Cook will do something just because it will benefit Icahn.

I don't think Carl Icahn is doing anything nefarious; he's just busting chops to make money.

Now what are they going to talk about?

Apple's buyback program, which Icahn wants upsized.

So let's talk about Apple's cash.

As of last quarter, the company had $130 billion in net cash -- more than any company on Earth. If all that cash disappeared, it would take the company less than two years to make it back all over again.

Believe you me, Apple knows about cash.

With all that money, Apple most certainly has already explored every possible option for it -- especially since it already has a buyback and dividend program in place!

Does anyone really think Apple didn't explore bigger buybacks and dividends?

You think bankers don't hit up the company's finance team regularly with ideas?

And does anyone really think Tim Cook would take the chance of being perceived as a mark for Carl Icahn?

Come on. This dinner couldn't be more unobjectionable.

So let me tell you why I think Cook is having dinner with Icahn.

It's for the same reason I would have dinner with Icahn -- because it beats the heck out of eating with anyone else on Wall Street.

Carl Icahn is funny, loud, and obscenely wealthy -- and he does not behave himself.

In my experience, those people are fun to be around.

Twitter: @Minyanville