Big investor dumps Apple

Big investor dumps Apple

People walk past a store promoting the Apple iPhone 6S in the southern Chinese city of Shenzhen. (Reuters Photo)
People walk past a store promoting the Apple iPhone 6S in the southern Chinese city of Shenzhen. (Reuters Photo)

American billionaire Carl Icahn says he has sold all of his shares worth billions of dollars in Apple Inc because of concerns about the company’s relationship with China.

“We no longer have a position in Apple,” Icahn told CNBC, adding that he sole most of his remaining stake in February. “I got out because I’m worried about China.”

Icahn perceives a risk in Apple’s relationship with China and that made his already profitable investment in the company no longer a “no-brainer", he said. China shut down Apple’s iTunes Movies and iBooks services recently, showing that the company isn’t immune to the reach of Beijing regulators.

“You worry a little bit, and maybe more than a little, about China’s attitude,” said Icahn, an outspoken shareholder rights activist who has used his clout over the years to push for reforms at many large companies.

Apple has a good relationship with China, providing a lot of employment there, but also relies on the country for a large proportion of its sales, he said.

Apple shares declined 2.7% on Thursday and have lost more than 7% this year.

In the fourth quarter of last year, Icahn sold 7 million Apple shares, leaving him with 45.8 million shares worth $4.8 billion, according to a February regulatory filing. He reduced his holding just before the company’s shares started to slide this year on concerns that the smartphone market is becoming saturated and that China will no longer fuel sales growth.

“We have this huge profit so by definition it’s not the no-brainer it was — but two — if China was basically steady I would probably go back into” Apple, which he reiterated he viewed as a great company with great management. “I hope one day to get back into it.”

After disclosing his Apple stake in August 2013, Icahn pushed CEO Tim Cook to return more of the company’s ballooning cash pile to investors. The iPhone maker stepped up its share buybacks and increased dividends, helping to fuel a 38% share rally in 2014. That petered out in 2015, when Apple shares declined 4.6%.

Do you like the content of this article?
COMMENT (1)