Wall Street’s highest-profile names have put billions of dollars on the line as they jostle to correctly predict the direction of Apple’s share price.
From Carl Icahn to Goldman Sachs, investors are divided on how the world’s biggest company, will fare over the coming year amid concerns that the smartphone market is becoming saturated and that China will no longer fuel sales growth.
Mr Icahn and the hedge fund Greenlight Capital, led by David Einhorn, are among those to have cut their stakes in the iPhone maker in the last three months of 2015, just before the company’s shares started to slide this year – Apple is down 8.2 per cent as of Tuesday – amid a global equity sell-off that has been marked by falling valuations in technology stocks.
Mr Icahn sold 7 million Apple shares in the fourth quarter, leaving him with 45.8 million shares worth US$4.8 billion. Greenlight Capital cut its stake by 44 per cent to 6.3 million shares worth $661.5 million as of December 31, according to a regulatory filing on Tuesday. Vanguard Group and Northern Trust were also among the institutional investors that reduced Apple holdings in their portfolios.
Still, other investors saw a buying opportunity in Apple shares. Tiger Global, a backer of Souq.com, added shares in Apple worth $1.1bn at end of the year, according to the filing.
Morgan Stanley, Goldman Sachs, Bank of America and T Rowe Price Group were also among the major investors who added Apple shares during the reporting period.
In the debt market, Apple didn’t seem to have any trouble attracting investors. On Tuesday, Apple sold bonds worth $12bn in the second-biggest bond sale of the year. The California-based company has been selling multibillion bond offerings since 2013 to pay for its return of cash to shareholders, instead of repatriating money held overseas that would be subject to taxation when brought back home.
It has stepped up its share buybacks and increased dividends, helping to fuel a 38 per cent share rally in 2014. That petered out last year, when Apple shares declined 4.6 per cent.
Apple briefly ceded its position this month as the world’s most valuable listed company, to Google’s parent company Alphabet. Last month, Apple also issued a forecast that predicted a decline in sales for the first time in more than a decade.
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