Apple Inc.'s shares passed the $500 threshold Wednesday— their highest level since January — before giving back some of the gain to end at $498.50.
The stock traded as high as $504.25, but ended up 1.8 percent, or $8.93, a day after activist investor Carl Icahn said he thinks the iPhone maker should do more to revive its stock price.
The outspoken billionaire said in Twitter posts Tuesday that he had acquired an unspecified stake in Apple and had spoken to its CEO about boosting share repurchase plans. The stock immediately jumped, and closed at its highest level in nearly seven months.
Icahn said he has amassed a "large position" in Apple Inc and believes the stock could be worth as much as $700 a share if Chief Executive Tim Cook pushed for a larger stock buyback. Icahn also said Apple is "extremely undervalued."
Apple is committed to buying back $60 million in stock by the end of 2015. Icahn believes that program should be immediately increased.
Icahn told Reuters that the iPhone, iPad and Mac computer maker 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," 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. U.S. rules require investors to disclose stakes of 5 percent or larger within 10 days of hitting that threshold.
"We currently have a large position in Apple. We believe the company to be extremely undervalued," Icahn said in one of two tweets about Apple.
The company's stock peaked last year at $705.07 but began losing ground on concerns about slowing growth and growing competition.