In an open letter addressed to Apple CEO Tim Cook, published on Oct 24 through his web site, The Shareholders' Square Table, Carl Icahn reiterated his call for Apple to utilise its surplus cash to increase its buyback programme and to make it happen soon.

"The timing for a larger buyback is still ripe, but the opportunity will not last forever. While the board's actions to date ($60 billion share repurchase over three years) may seem like a large buyback, it is simply not large enough given that Apple currently holds $147 billion of cash on its balance sheet, and that it will generate $51 billion of EBIT next year (Wall Street consensus forecast)," Icahn wrote.

In his bold prediction, he claimed that a $150 billion buyback will bring Apple Inc. (AAPL) to an all-time high of $1,250 over three years.

"As we proposed at our dinner, if the company decided to borrow the full $150 billion at a 3% interest rate to commence a tender at $525 per share, the result would be an immediate 33% boost to earnings per share, translating into a 33% increase in the value of the shares, which significantly assumes no multiple expansion. Longer term (in three years) if you execute this buyback as proposed, we expect the share price to appreciate to $1,250, assuming the market rewards EBIT growth of 7.5% per year with a more normal market multiple of 11x EBIT."

As observed in several times before, Icahn's association with Apple tends to make or break the price of the stock.

In fact, Apple shares were up 1.54 per cent at $533 based on a real-time quote by NASDAQ OMX as of Oct 25 - just one day after Icahn's open letter to Cook.

However, even with Icahn being as passionate as ever with the buyback programme, he pledged to keep his own stock out of the buyback programme he was proposing.

Icahn now owns $4.73 million shares of Apple stock as revealed in his letter. This means that he now owns approximately $2.5 billion worth of shares of Apple.

"Per my investment thesis, commencing this buyback immediately would ultimately result in further stock appreciation of 140 percent for the shareholders who choose not to sell into the proposed tender offer. Furthermore, to invalidate any possible criticism that I would not stand by this thesis in terms of its long term benefit to shareholders, I hereby agree to withhold my shares from the proposed $150 billion tender offer," Icahn wrote in his letter.

"There is nothing short term about my intentions here."