The Morning Brief: Icahn Puts More Pressure on Apple

Carl Icahn has turned up the heat on Apple. The septuagenarian investor raised his stake in the maker of the iPhone and iPad by 22 percent, to 4.7 million shares, and called on the company to buy back $150 billion worth of stock. He said in an appearance on CNBC that if the company rebuffs his proposal, he may try to gain one or two seats on the board of directors if he felt he could win. “I will test the waters,” he told his favorite interviewer, Scott Wapner. “I think it is undervalued,” Icahn added. “I look at this as a no brainer.” He said his average purchase price on the stock is $440 and he thinks it is still “compelling at $550 and even $570.” The stock closed Thursday at $531.88, up 1.32 percent.

Richard “Mick” McGuire III’s San Francisco-based firm Marcato Capital Management applied more pressure on Sotheby’s. The one-time protégé of Pershing Square Capital Management’s William Ackman filed with regulators a major presentation for unlocking value at the company, including selling properties it owns in New York and London. McGuire’s firm controls 6.7 percent of the shares of the auctioneer. Meanwhile, Daniel Loeb’s New York-based Third Point owns 9.3 percent of the stock. Shares of Sotheby’s closed Thursday at $52.95, up 0.70 percent.

Thursday was an eventful day for Jeffrey Ubben’s ValueAct Capital. Three of its four largest holdings made some sort of news and in most cases surged as a result. Shares of Microsoft jumped 6 percent in after hours trading after it reported quarterly earnings and revenues that beat consensus estimates. It was the largest position of the San Francisco-based activist hedge fund firm at the end of the second quarter. Meanwhile, ValueAct reported selling nearly 3.5 million shares of its fourth largest holding, Adobe Systems, for between $52.52 and $53.22, reducing its total stake to 25.3 million shares. The stock rose 2.17 percent Thursday, closing at $54.21. Also on Thursday, Credit Suisse raised its price target on Motorola Solutions, Ubben’s second largest holding, noting the telecom equipment company recently reported “solid results.”

The co-founder and president of Dallas-based Highland Capital is apparently locked in a nasty divorce. James Dondero claims pending lawsuits have left him legally insolvent despite earning more than $36 million in 2010. (For perspective, $36 million would never come close to qualifying for Alpha’s Rich List.) This divorce, which has already played out over two years, has become so intense that even his one-time partner of the $18 billion firm is testifying on behalf of Dondero’s wife, Rebecca, claiming her husband said he planned to hide assets.

Shares of AutoNation surged 1.75 percent to close Thursday at $49.42. The stock is the second largest holding in the concentrated portfolio of Edward Lampert’s Bay Harbour, Florida-based ESL Partners. Shares of the auto retailing giant are up roughly 25 percent this year.