Carl Icahn Says Apple Inc. Trades At 50% Discount In Letter To CEO Tim Cook

In an open letter to Apple Inc. AAPL CEO Tim Cook, Carl Icahn requested the company make additional share repurchases and suggested the company has been deeply undervalued in the market.

Icahn wrote, “Our forecasted growth for FY 2016 and FY 2017 more than adequately justifies using a P/E multiple of 19x our FY 2015 forecast, which along with net cash values Apple at $203 per share today.”

The letter went on to state that, “given the persistently excessive liquidity of $133 billion net cash on Apple’s balance sheet, we ask you to present to the rest of the Board our request for the company to make a tender offer, which would meaningfully accelerate and increase the magnitude of share repurchases.”

Icahn concluded by writing that as “the strength of the earnings growth we forecast materializes, and these [managed] funds scramble to correct [their valuation] mistake, only to find themselves competing in the market to do so, a de facto short squeeze may occur, and we can only hope that the company has repurchased all the shares it can before that happens.”

Apple Inc. recently traded at $101.80 in the premarket Thursday, up 0.99 percent.