UPDATE, 2:57 PM: Apple should repurchase $150B worth of its shares after borrowing the funds at an interest rate of 3%, Carl Icahn tells Reuters. ”If Apple does this now and earnings increase at only 10%, the stock — even keeping the same multiple currently — should trade at $700 a share,” he says. The stock closed today at $489.57, +4.8%. adding about $20B to the company’s market value.

PREVIOUS, 11:43 AM: Company shares are up 4.3% this afternoon after the billionaire investor tweeted that he has “a large position” in Apple, believes it to be “extremely undervalued” and spoke today with CEO Tim Cook. In what he describes as a “nice conversation,” Icahn says he “discussed my opinion that a larger buyback should be done now. We plan to speak again shortly.” Apple shares are down 23.4% over the last 12 months as investors fear that competitors including Google will continue to take market share from the iPhone and iPad — and that the iconic consumer electronics company won’t have another blockbuster product to pick up the slack. This morning Oracle’s Larry Ellison said in an interview that Apple isn’t likely to regain its former glory following the death of Steve Jobs. Apple’s expected to unveil an updated iPhone on September 10.

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