The Funniest Part Of Carl Icahn's Letter To Apple

For the most part, the letter is irrelevant. Basically, Icahn says Apple should buy back more shares because the stock is undervalued.

Apple agrees, which is why it's been buying shares.

Icahn just wants Apple to buy shares faster. He thinks the stock is poised to explode, so he wants Apple to "make a tender offer, which would meaningfully accelerate and increase the magnitude of share repurchases" before the share price increases.

He thinks Apple should be trading at $203, up from $101.34 today. That's an aggressive price target. At that price, Apple's market cap would be $1.2 trillion. Even the most aggressive sell-side analyst doesn't have the stones to throw out a target like that.

For some contrast, on CNBC this morning, another billionaire Apple shareholder, Leon Cooperman, said he thinks Apple is 20% undervalued.

The whole letter is still entertaining to read. The following is probably the funniest part:

To preemptively diffuse any cynical criticism that you may encounter with respect to our request, which might claim that we are requesting a tender offer with the intention of tendering our own shares, we hereby commit not to tender any of our shares if the company consummates any form of a tender offer at any price. We commit to this because we believe Apple remains dramatically undervalued. And we think you and the Board agree. If you did not, you would not continue to repurchase shares under the existing authorization.

With this, Icahn is trying to make himself look altruistic, like a good guy. But, if Apple shares will go up when Apple starts buying them, then Icahn's stake will become even more valuable.

So, Icahn isn't really being a good guy here. He's taking care of himself. Not selling shares is in his best interest. As Apple buys more shares the price of the stock is likely to rise. He should offer to sell some of his stake now, and acknowledge that he's going to miss out on the coming upside that he forecasts.