By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Apple Inc. started the week off
in the tech sector spotlight Monday with the company's stock price
getting a small lift after billionaire activist investor Carl Icahn
said he would drop his efforts aimed at getting Apple to buy back
an additional $50 billion of the company's stock.
In an open letter to Apple (AAPL) shareholders, Icahn said
Monday that he was "supportive" of Apple's recent repurchases of
$14 billion worth of its stock over the last two weeks. Icahn
issued his letter a day after proxy advisement Institutional
Shareholder Services came out against a non-binding proposal from
Icahn that called on Apple to add another $50 billion to its
stock-buyback plan. Last year, Apple said it would return $100
billion to its shareholders over three years, including $60 billion
in stock repurchases.
Icahn said that as a result of Apple's buybacks, and the
recommendation of ISS, "we see no reason to persist with our
non-binding proposal, especially when the company is already so
close to fulfilling our requested repurchase target."
Icahn also recently said that he had purchased $500 million more
of Apple's stock, bringing his stake in the company to more than $3
billion. Since divulging his initial Apple investment in August
2013, Apple's stock price has risen 12.7%.
Analyst Robert Cihra, of Evercore Partners, said the end of
Icahn's efforts came down to arguing just how much is enough for
Apple to return to shareholders from its approximately $160 billion
cash reserve.
"I think it was one thing to argue, justifiably, for Apple to
start returning some of its massive cash pile back to shareholders
as dividends and buybacks a couple of years ago when it was giving
back nothing," Cihra said. "But having now added and even increased
its buybacks and dividends over the past year, I'm not sure calls
for "more, more" carry the same weight."
In addition to Apple, another notable tech gainer was Yelp Inc.
(YELP), which rose almost 4%, to $92.59 a share.
Yelp got a lift following a report in the Wall Street Journal
said the company is entering a new partnership with Yahoo Inc.
(YHOO) in which Yahoo will incorporate Yelp's listings and reviews
of local businesses into Yahoo's search results. Yelp also has
similar deal in place with apple and Microsoft Corp.
The overall tech sector was showing mild gains, as the Nasdaq
Composite Index (RIXF) rose almost 7 points to 4,132 and the
Philadelphia Semiconductor Index (SOX) edged into positive
territory.
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