Gross says Icahn should leave Apple alone

Activist investor ups his stake in technology bellwether but tells CEO to buy back stock.
OCT 28, 2013
Bill Gross, manager of the world's largest mutual fund, said fellow billionaire investor Carl Icahn should stop pushing Apple Inc. for additional share buybacks. “Icahn should leave Apple alone and spend more time like Bill Gates,” Mr. Gross, who runs the $250 billion Pimco Total Return Fund at Pacific Investment Management Co., wrote in a message on Twitter Thursday. “If Icahn's so smart, use it to help people, not yourself.” Mr. Icahn, who has taken stakes and agitated for stockholder-friendly changes at companies from Dell Inc. to Transocean Ltd., said in a Bloomberg Television interview Wednesday that Apple should buy back $150 billion of shares and criticized the board for not acting to enhance value. In backing Apple's management, Mr. Gross joins Warren E. Buffett, who has said that companies shouldn't be run primarily to please shareholders who may then sell. Mr. Icahn is ranked 34th on the Bloomberg Billionaires Index of the world's richest people, with a net worth of $21 billion. In 2012, he pledged $200 million to the Mount Sinai School of Medicine, the biggest donation ever given to the New York teaching hospital. He's also endowed five charter schools in the city and has signed Mr. Buffett's and Mr. Gates's Giving Pledge, which encourages the world's richest to give the majority of their wealth to charity. GROSS'S WEALTH Mr. Gross's personal wealth is estimated at $2 billion. The 69-year-old has endowed a foundation with $293 million in assets and raised money for Doctors Without Borders, a medical charity, by selling parts of his stamp collection. He gave $20 million to Cedars-Sinai Medical Center last year and $20 million to Mercy Ships, an international medical charity, in August. On Friday, Mr. Gross acknowledged that he also should spend more time on philanthropy. “By the way, I should spend more time like Bill Gates, too — we all should,” he wrote in a message on Twitter. “He and Melinda are great paragons.” Mr. Gross's Total Return Fund didn't own any Apple bonds as of June 30, according to a regulatory filing. One of Pimco's stock funds, EqS Pathfinder, had 23,059 shares of Apple as of June 30. ICAHN'S LETTER In a letter to Apple chief executive Tim Cook, published Wednesday, Mr. Icahn said he had increased his holding in the company to 4.7 million shares, worth $2.5 billion, from 3.4 million shares in August, and added that he intends to buy more of the stock — which he said is undervalued. Mr. Icahn, 77, didn't respond to a phone message at with his office. Mr. Buffett has said he advised Apple a few years ago to use some of its cash to repurchase shares, though he doesn't see a need for a larger share repurchase, as demanded by Mr. Icahn. Investors who have weighed in on Apple include bond manager Jeffrey Gundlach, who runs the top performing DoubleLine Total Return Bond Fund. Last year, Mr. Gundlach told investors to bet against the shares before they started falling. During an interview on CNBC earlier this month, Mr. Gundlach said Apple was a “fairly safe” stock to own, but doesn't agree with people who contend it's a no-brainer at $500 a share.

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