(Reuters) - Billionaire investor Carl Icahn said on Monday Apple Inc's (O:AAPL) stock was "still dramatically undervalued" and that it should be trading at $240, nearly double its current price.
Icahn also used an open letter to Apple Chief Executive Tim Cook to call for it to execute a much larger share buyback, returning to a longtime theme of the activist investor's campaign for the iPhone maker to boost shareholder returns.
Apple shares rose as much as 1.8 percent to $130.72 by midday on Monday. The stock has gained more than a quarter since October, when Icahn first said it was undervalued.
Following pressure from Icahn and other activists, Apple boosted its share repurchase program in April to $140 billion from $90 billion announced last year and raised its quarterly dividend by 11 percent to 52 cents per share.
"It is our belief that large institutional investors, Wall Street analysts and the news media alike continue to misunderstand Apple," Icahn wrote in the letter.
Icahn, one of Apple's top 10 investors, has long urged the world's most valuable company to buy back more shares and boost its dividend.
The investor said in February that he owned about 53 million shares, now worth about $6.8 billion.
"Apple is poised to enter and in our view dominate two new categories (the television next year and the automobile by 2020) with a combined addressable market of $2.2 trillion, a view investors don't appear to factor into their valuation at all," Icahn wrote on Monday.
Apple has yet to officially acknowledge that it is developing what would likely be an electric, self-driving car.
It has also long been expected to enter the consumer television market with a more wide-ranging product than its current Apple TV box that allows users to stream programs from iTunes and other sources, but has said little about those plans. Past expectations that Apple would develop an actual television have so far been disappointed.
Apple had decided more than a year earlier that it would not make a television set, Wall Street Journal reported on Monday, citing people familiar with the matter.
It is unclear how much insight Icahn has into the iPhone maker's plans for future products. An Apple spokeswoman did not immediately respond to a request for comment.
Icahn was not immediately available for comment by phone.