Carl Icahn walked away from his effort to win a higher price for an 8.9 percent stake in Dell Inc. (DELL) less than a month after stating that the $24.9 billion buyout “greatly undervalues” the computer maker.

In a post today on Twitter, Icahn said he was dropping his demand for an independent court appraisal of his 156.5 million Dell shares. Under the law in Delaware, where Dell is incorporated, stockholders can ask the state chancery court for an independent valuation of fair value in a takeover.

The billionaire, in a Sept. 9 letter to other Dell shareholders, vowed to pursue appraisal rights even as he conceded defeat after a months-long effort to spur a higher bid or win control of the Round Rock, Texas, company. Today’s reversal shows how Icahn’s shareholder activism is often designed to generate short-term gains, said Gary Lutin, a former investment banker who is setting up a trust for investors who seek Dell appraisal rights.

“This is what Icahn has always been good at,” said Lutin, who runs the Shareholder Forum, the New York-based sponsor of the Dell Valuation Trust. “Yelling and shaking and grabbing what he can.”

Icahn, who didn’t return a telephone call seeking comment, said in the September letter that his efforts had forced Michael Dell and partner Silver Lake Management LLC to boost their bid to $13.75 a share, plus a 13 cent dividend, from the $13.65 a share they originally offered in February. Abandoning the appraisal demand clears the way for Icahn to collect the $2.2 billion he is entitled to receive under the buyout’s revised terms.

‘Better Uses’

“I withdrew my demand for appraisal of my Dell shares,” Icahn said in his Twitter post. “Based on our returns on capital, we believe we have better uses for $2 billion.”

To pursue a claim under Delaware law, an investor needs to file an appraisal demand with the target before the shareholder vote, then oppose the deal or refrain from casting a ballot. Once the deal closes, investors who have filed demands have 60 days to change their minds and accept the price being paid in the buyout. Dell shareholders approved the buyout on Sept. 12, and the company has said it expects to complete the transaction by Oct. 31.

Other Investors

Dell received appraisal requests for 225 million shares, including Icahn’s, said a person familiar with the matter, who asked not to be identified because the information hasn’t been made public. That suggests that investors holding an additional 68.5 million Dell shares passed up the $942 million they would have received through the buyout to pursue a court valuation for their stock holdings.

The investors must file a petition with the Delaware Chancery Court seeking an appraisal within 120 days after the deal becomes final. Absent a settlement, they would receive whatever the court decides Dell shares were worth when the buyout was completed, plus interest of almost 6 percent.

Dell filed a Form 8-K with the U.S. Securities and Exchange Commission today saying that Icahn notified the company yesterday that his affiliates withdrew their appraisal demands.

“We are going to proceed accordingly with the rest of the process, including closing” the buyout later this month “and then with whatever litigation occurs down the road,” David Frink, a Dell spokesman, said today in an interview.

To contact the reporter on this story: Miles Weiss in Washington at mweiss@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net