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Billionaire Carl Icahn says Apple shares could trade at $700

Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference, held at the New York Stock Exchange, June 27, 2007. RE
Investor Carl Icahn speaks at the Wall Street Journal Deals & Deal Makers conference, held at the New York Stock Exchange, June 27, 2007. RE

By Jennifer Ablan

(Reuters) - Hedge fund billionaire Carl Icahn took a "large" position in Apple Inc. shares and told Reuters on Tuesday that he believes Apple should trade at $700 a share.

In a telephone interview, Icahn said he believes "Apple has the ability to do a $150 billion buyback now by borrowing funds at 3 percent.

"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."

Apple shares were at $489.57 on Tuesday.

Apple has "huge borrowing power, little relative debt and trades at a low multiple," Icahn said.

Earlier on Tuesday, Icahn stunned markets after he sent a tweet, saying: "We currently have a large position in APPLE. We believe the company to be extremely undervalued. Spoke to Tim Cook today. More to come."

He also tweeted: "Had a nice conversation with Tim Cook today. Discussed my opinion that a larger buyback should be done now. We plan to speak again shortly."

(Reporting By Jennifer Ablan; Editing by Andrew Hay and Ken Wills)

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