Icahn Takes A "Large Position" In Apple Stock

"If Apple does this now and earnings increase at only 10 percent, the stock - even keeping the same multiple currently - should trade at $700 a share," Icahn said in a phone interview. Apple has "huge borrowing power, little relative debt and trades at a low multiple."

Icahn, who this year launched an assault on Michael Dell’s $25 billion effort to take Dell Inc private, did not say how many shares of Apple he holds.

A source familiar with the matter, who declined to be named because Icahn hasn’t disclosed his holdings in Apple, said the investor’s stake was worth around $1 billion, a fraction of the company’s market value of more than $400 billion.

Right now, given Apple’s current market capitalization, he isn’t a threat in terms of decision making influence at the company. Regardless, Apple’s stock hit $500 for the first time since the beginning of this year on Wednesday August 14th, so investors seem to be happy with the news.