Carl Icahn disclosed via Twitter's (TWTR) social media app in January that he had boosted his Apple holdings to $3.6 billion. He added that more aggressive buybacks were a "no brainer" in a letter to fellow Apple investors.
Pacific Crest Securities analyst Andy Hargreaves suggested that Tim Cook and Apple are not bowing to pressure from activists by repurchasing shares and paying a dividend.
"It's great that Carl Icahn figured out how to use Twitter and that he's got a 1% stake," Hargreaves said.
Apple appears "perfectly comfortable" with the system of deploying cash that its management has devised over years of analysis, he suggested.
"In the spectrum of ways you return cash, one way is to be loud, say what you are going to do and how are going to do it, which pops the stock and is good for activists" who may want to flip their shares, Hargreaves added. "It also generally results in your buying back your stock at an artificially inflated price."
The alternative is not to broadcast intentions and avoid driving up the price of securities your company is purchasing. "That's what Apple is doing and I appreciate that method," Hargreaves said.
Barclays Capital analyst Ben Reitzes suggested in a Friday note that Cook detailed Apple's buybacks in a Wall Street Journal interview "to remedy several inadequate answers on last week's [first quarter] conference call that we believe many investors found disappointing." One question after the call, he suggested, is why Apple was not buying shares more aggressively while the price neared $500 per share.
Cash stockpiles are not the sole focus of agitators. Pressure on Ebay and Juniper stems, at least in part, on a critique of the companies' asset portfolios.
In the case of Hewlett-Packard's (HPQ) 2011 clash with Ralph Whitworth's Relational Investors, governance was a central issue.
Given the political tension in Washington, D.C. and the place in the political cycle, Moody's analyst Lane suggested that temporary or permanent legislation to encourage repatriation of cash is not likely for the current administration.
Companies may take steps to preempt activism, he suggested.
Following Apple's disputes with David Einhorn's Greenlight Capital in 2013, Altera (ALTR) increased its stock buyback from about 11 million shares to more than 40 million shares, issuing $1 billion in note to fund the purchases. Unlike Apple, the San Jose chipmaker had not faced activist threats.
"You might see some companies saying we want to better control our fate," Lane said, "as opposed to having a disproportionate amount of pressure from an outside party."