Apple bought back $14 billion worth of its shares on recent dip: Report

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By Associated Press | Updated: 7 February 2014 20:24 IST
Apple has reportedly repurchased $14 billion of its stock in the two weeks after its first-quarter financial results and second-quarter revenue outlook disappointed investors.

Its shares rose almost 2 percent in premarket trading Friday.

Late Thursday, The Wall Street Journal reported that Apple Inc. CEO Tim Cook said that the company was "surprised" when its stock dropped 8 percent the day after its earnings report and revenue outlook. He told the newspaper he wanted to be "aggressive" and "opportunistic."

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An Apple representative didn't immediately respond to an email seeking comment.

Apple has grown accustomed to being a leader in the technology sector. In the Steve Jobs era, consumers and investors alike eagerly awaited each new product announcement and have been rewarded as devices like the iPhone and iPad won accolades for innovation and pushing technology forward.

But with each new innovation over the years, there have been increasingly higher expectations for the future. So when Apple's first-quarter iPad and iPhone sales were not as big as expected by investors, and its second-quarter revenue forecast fell short of Wall Street's view, the stock got dinged.

In past year Apple's shares have started losing some ground due to concerns about slowing growth and increasing competition.

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And with the smartphone market becoming inundated with options, Apple may be hard pressed to lift its stock back to where it stood at its peak price of more than $700 in September 2012. That was before investors began to fret about fiercer competition in mobile devices and Apple's lack of a breakthrough product since the iPad came out nearly four years ago.

But Apple isn't sitting idle. Its reported stock buybacks signals the company remains confident in its business. This is good news for investors, including Carl Icahn. The billionaire activist investor has been pressuring Apple to boost its stock buybacks. Just last month Icahn raised his stake in Apple, revealing on Twitter that he'd put another $500 million into Apple stock. He already owned about 4.7 million Apple Inc. shares worth more than $2.5 billion.

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While Apple reportedly repurchased $14 billion of its stock in two weeks, Icahn has said he wants the Cupertino, California, company to spend $50 billion buying back its own stock during the current fiscal year ending in September.

Cook told the Journal that Apple has repurchased more than $40 billion of its shares in the last 12 months.

The company's stock added $8.66, or 1.7 percent, to $521.17 in premarket trading about 90 minutes before the market open.
 

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