Carl Icahn’s new strategy: come in second but with a bigger microphone

Activist investor Carl Icahn is not afraid of going it alone in his investments, and often does. But in his last few high-profile bets, he’s followed other hedge fund managers who made the first move into a company. The difference is that Icahn has the biggest voice in the shareholder world, allowing him to stir things up more than others, and make a lot of money in the process.

The latest example is his $1 billion investment in Apple, which Icahn is pushing to implement a bigger share buyback. His move comes after hedge fund manager David Einhorn in February began publicly pressuring Apple to return some of its cash pile to investors, marking the first time a big activist shareholder targeted Apple. In April, Apple announced that it was increasing its share buyback and dividend plan by $55 billion, bringing the total to $100 billion by the end of 2015.

Einhorn already did a lot of the hard work for Icahn by being the first mover, which was a risky move given Apple’s history of not being responsive to shareholders. Icahn is essentially piggybacking off of Einhorn’s effort, and simply asking that Apple do even more. The difference is how much attention Icahn’s moves get. He teed up his Apple stake by announcing a few days before that he would have some important news, and then revealed his Apple stake through Twitter. The news caused Apple shares to briefly surge above $500.

Apple only has to look at Dell to see how large of a voice Icahn has, and how often he likes to use it. The proposal to take Dell private by its CEO Michael Dell already faced shareholder opposition from Southeastern Asset Management when Icahn stepped in to say he was also against the sale. The two teamed up to offer an alternative proposal, while Icahn took to Twitter, CNBC and public letters to express his disgust with Dell. He also threatened to tie the company up with years of lawsuits if it went forward with the Michael Dell deal. The shareholder vote on the deal is in September.

Icahn also made a lot of noise with his investment in nutritional products company Herbalife, which came after fellow activist investor Dan Loeb had announced a similar bet. Both men were long on the stock, taking the opposite bet of arch enemy Bill Ackman, who was shorting the stock and accused the company of being a pyramid scheme. Icahn and Ackman got into a public fight on CNBC over Herbalife, which gave Icahn representatives two seats on its board.

Of course, the benefit of being Icahn or these other well-known investors is that others usually follow in their footsteps, causing the share price of a company to go up even further. That makes even more money for Icahn and his like. Following another activist is potentially less lucrative for Icahn, causing him to miss any early pop in shares when the first big investor comes out publicly—but his recent track record suggests Icahn’s gains can still be big.

The question on Apple is whether the company gives in the way it did with Einhorn. A lot of shareholders are betting that Icahn has a fighting chance.

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