Billionaire’s tweet adds $17bn to Apple

Tim Wallace
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APPLE’S shares rocketed last night after legendary investor Carl Icahn tweeted his support for the company, adding tens of billions to its market value.

The activist shareholder sent markets wild with a pair of tweets during afternoon trading yesterday, telling over 40,000 followers that he owns a large amount of Apple stock – which he believes is undervalued.

As shares began to rocket – rising as much as 5.6 per cent – Icahn stuck to the social media forum to divulge that he'd been speaking to the tech giant’s chief executive, and pushing Tim Cook to return some of the company’s huge cash pile to shareholders.

“We currently have a large position in Apple. We believe the company to be extremely undervalued,” Icahn tweeted, sending trading volumes up to three times their usual daily level.

“Had a nice conversation with Tim Cook today. Discussed my opinion that a larger buyback should be done now. We plan to speak again shortly.”

Stocks soared up 5.6 per cent on the statements, before ending the day up 4.75 per cent – representing a gain of $17bn to the market value of the business. The jump leaves the shares at $489.57, their highest level since January.

Icahn’s view differs strongly from that of the market which has been bearish on Apple for much of the last year, and the bounce represents something of a turnaround for the giant.

Once the darling of the tech sector and for a time the biggest company in the world by market capitalisation, Apple’s shares peaked at more than $700 each last September.

In the months that followed they lost more than 40 per cent of their value – in early June they stood below $400 per share.

The jump in prices marks a contrast with the fortunes of rival smartphone manufacturer Blackberry.

The business mobile phone firm announced this week it is up for sale, after its latest effort to crack back into the market disappointed this year.

Blackberry’s shares plunged to below $9 last month, from a peak of $70 in 2011. The stock barely picked up on the announcement it could be sold yesterday, edging up to $10.93.

The contrasting fortunes were further sharpened as speculation mounted over the next products Apple could be preparing to unveil to the public.

Technology websites claim leaked information and pictures point to a 10 September launch date for new iPhone models possibly to be called the 5S and 5C.

The 5C could be a lower-end model, intended to allow Apple to expand into the cheaper end of the market.

That could increase the company’s appeal and allow it to gain further market share. However, to date it has shied away from moves to sell lower-margin goods or to risk hurting its brand by association with cheaper products.

Twitter has had an increasing influence on markets in recent months, allowing traders and algorithms to pick up on the views of big investors and business figures instantly.

News is also spread more quickly, particularly as Twitter feeds can be seen on Bloomberg terminal displays.

And more adventurous funds also attempt to pick up on market and broader sentiment by analysing huge volumes of tweets for positive and negative indicators.

However, monitoring the site has not always proved positive for traders – the Associated Press Twitter account was accessed earlier this year by a hacker who falsely claimed explosions had been reported at the White House, briefly jolting markets.