You see, Tuesday afternoon, in a single tweet, the legendary 77-year-old activist investor added more than $17.26 billion to Apple's market cap. At 2:21 p.m., pre-tweet, AAPL stock was trading at $475. Following the tweet, shares shot up to $494, before settling the day at $489.57.
Moreover, as Zero Hedge pointed out, holders of Apple $480 August calls saw their contracts soar from a mere $0.20 to a whopping $16, good for an astounding 7,900% profit in just two days.
Ah, the power of Carl Icahn – and Twitter.
How Icahn + Twitter = $500 Apple Stock
Icahn's tweet read: "We currently have a large position in APPLE. We believe the company to be extremely undervalued. Spoke to Tim Cook today. More to come."
What came later was: "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."
Icahn took a big bite of Apple with a $1.5 billion stake. He believes AAPL stock should be trading much higher and says the iPhone maker should be doing more with its $146.6 billion cash stash. He's pressing the company to buy back shares.
"Apple has the ability to do a $150 billion buyback now by borrowing funds at 3%," Icahn told Reuters. "If Apple does this now and earnings increase at only 10% the stock,-even keeping the same multiple currently-should trade at $700 a share."
Icahn added Apple has "huge borrowing power, little relative debt and trades at a low multiple."
Indeed, Apple stock currently trades at a modest P/E (for a tech company) of 12.39 and has fallen precipitously from its $705.07 peak hit in September.
AAPL Stock a 2013 Target
Billionaire Icahn's sizable investment marks the second time in recent months an activist investor has gone Apple picking…