Special Report: Tim Cook fields questions on Apple dividends, a stock split, iTunes content deals

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  • dcsimagesdcsimages Posts: 55member
    I would make one argument for a stock split.



    There are many people, like my mother, who have AAPL stock in their IRAs.



    My mother is required to withdraw a certain amount every year based on the value of the IRA at the end of the previous year.



    This year it was about $4200 and she sold 9 share at $502.



    If Apple had split 4 for 1 last year and was trading at $125.50 she'd have sold 35 shares and had the equivalent of 3/4 of a share more than she has now.



    For someone who lives on a fixed income it means a lot.
  • anantksundaramanantksundaram Posts: 16,844member
    Quote:
    Originally Posted by JDW View Post


    Well, if dividends are only going to "preferred shareholders" then I want Cook to explain to me how I can become one. And if such is not possible, then it is clear we would have a situation where a small group of wealthy, elitest "preferred shareholders" are getting yet more on top of what they already have. In such a case, how is making that small group of wealthy elite even more rich via Dividends better for Apple or AAPL stock? It would seem only logical that a Common Stock Dividend (i.e., share the wealthy with everyone who owns AAPL) would be the best course of action, if a Dividend was deemed "good" at all.



    Preferred shares is a class of shares that is generally only held for the dividends that they generate (although, there may be some tax advantages for inter-corporate preferred holdings). That is how that category of security is characterized: http://www.investopedia.com/terms/p/preferredstock.asp



    In other words, it is not come conspiracy against the common shareholder that preferreds get paid dividends. I don't know about Apple's preferreds specifically, but you can buy preferred shares in hundreds of companies, if you're so inclined. But just don't expect much of a price upside, if any, only dividends.
  • anantksundaramanantksundaram Posts: 16,844member
    Quote:
    Originally Posted by OldMacGuy View Post


    Indeed. This would just be another instance of the one percenters gettin' while all us 99ers who have stood by the company, good times and bad, get nothing.



    See above.
  • king of beigeking of beige Posts: 178member
    The day after Iraq invaded Kuwait the market went down 25%. Sooner or later, the Iran-Syria-Israel mashup will turn into a burning ship or two (not WWIII) and Iran will close the straits, and you can do the math on how much the market will correct when the news breaks the the next morning.



    If I'm prescient I'll jump out the day before and jump back in two days later (I use these AAPL windfalls to supplement my 84 year old mothers carekeeping fund.)



    Tim is right on, there is no need for a split or dividend, the ship is not broken and it doesn't need fixin. Kinda like Tim's successful strategy with the iPhone, iPad and MBA's, which is, if you're selling all you can make, why would you change things?
  • anantksundaramanantksundaram Posts: 16,844member
    Quote:
    Originally Posted by SolipsismX View Post


    Perhaps it's just a psychological limitation on my part but I have trouble believing that it would just as long for a stock at $500 to reach $2500 than it would 5x as much stock to reach $500 from $100. There a lot more factors at play than the simply division of the stock value.



    No, there aren't. You can choose not to believe it..... there's no law against it.
  • anantksundaramanantksundaram Posts: 16,844member
    Quote:
    Originally Posted by digitalclips View Post


    Heck if they are convinced a split won't have any effect then I'd say why not try it? I'd love 5x the stock to see if I'm right ... if not what is lost?



    Lawyers' fees; investment bankers' fees; (perhaps) more hassles with shareholder record-keeping...



    Why only 5x? Why not 50x?
  • apple ][apple ][ Posts: 7,907member
    I am against dividends.



    If somebody needs a dividend as an incentive to hold Apple stock, then they should go out and buy some other stock which suits them better.



    I am currently undecided as to what I think about stock splits. It seems to be more psychological than anything else.
  • cvaldes1831cvaldes1831 Posts: 1,832member
    Quote:
    Originally Posted by dcsimages View Post


    I would make one argument for a stock split.



    There are many people, like my mother, who have AAPL stock in their IRAs.



    No, your mother is an exception.



    According to the proxy statement issued in January, there were only 28,500 shareholders of record as of late December 2011. My guess is that a healthy chunk of those shareholders were actually Apple employees, via the company's Employee Stock Purchase Plan (ESPP), mostly owning small quantities since it's a percent of the employee's salary. So let's say that there are about 25,000 non-employee shareholders.



    70% of the float is held by institutional investors, guys like Fidelity, Vanguard, BlackRock, State Street. According to Yahoo Finance, there are about 1700 institutional holders.



    So really, there are probably about 23,300 non-employee retail shareholders. In a country of over 313 million people, that means one out every 13400 people is a direct shareholder of AAPL. That's not even 0.0075% of the population.
  • dasanman69dasanman69 Posts: 12,376member
    Quote:
    Originally Posted by Apple ][ View Post


    I am against dividends.



    If somebody needs a dividend as an incentive to hold Apple stock, then they should go out and buy some other stock which suits them better.



    I am currently undecided as to what I think about stock splits. It seems to be more psychological than anything else.



    A dividend is a reward for holding Apple stock not an incentive, big difference.
  • chabigchabig Posts: 587member
    Quote:
    Originally Posted by DESuserIGN View Post


    What Scottrade fails to tell you on that page is that you can only specify "All Or None" on trades of 100 shares or more. So if you have an odd lot your trade may be made in multiple lots which can cost 1.5 or more times the $7 "flat rate."



    No. What Scotttrade is saying is this: Suppose you put in a buy order for 17 shares of AAPL and you get filled in three transactions--4 shares, 6 shares, and 7 shares. You will only pay $7 commission total, even though it was three transactions. The $7 will be split among the three.
  • irelandireland Posts: 15,368member
    sky sports



    this chance will come only once
  • zoetmbzoetmb Posts: 1,850member
    Quote:
    Originally Posted by JDW View Post


    Well, if dividends are only going to "preferred shareholders" then I want Cook to explain to me how I can become one. And if such is not possible, then it is clear we would have a situation where a small group of wealthy, elitest "preferred shareholders" are getting yet more on top of what they already have. In such a case, how is making that small group of wealthy elite even more rich via Dividends better for Apple or AAPL stock? It would seem only logical that a Common Stock Dividend (i.e., share the wealthy with everyone who owns AAPL) would be the best course of action, if a Dividend was deemed "good" at all.



    There's usually two classes of stock to separate "preferred shareholders" from common stock holders. I own a number of preferreds (of other stocks). But I wasn't aware that there were two classes of Apple stock, so this statement surprises me.
  • cpsrocpsro Posts: 2,048member
    Quote:
    Originally Posted by AppleInsider View Post


    Cook noted Apple now has more cash than it needs to run its business



    Does that signal Apple is going to lower prices a bit, to put the squeeze on the competition?
  • solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by Cpsro View Post


    Does that signal Apple is going to lower prices a bit, to put the squeeze on the competition?



    That's one option they could use but it's a tricky one. If they lower their prices they have to make sure they can't be accused of using their dominate market position to unfairly reduce competition. They also need to factor in how lower prices will affect their profit margin and future growth to make sure they won't be put in a bad situation from charging too little. I think the best option with this new information is a buyback or one time dividend, with the latter being the most advantageous and most likely.



    PS: Note that Cook say "now has more cash" yet people have been saying that since they had only a few billion in reserves.
  • whofan01whofan01 Posts: 15member
    [A of this proves what I've always known from the beginning he who controls the content makes the rules ... and since apple controls 0 content, i have to think apples prospects look pretty grim.

    Especially when you consider that future tech is likely to be even more content dependent than currently.



    I think realistically apples only option is to invest in its own content just as others already are ...
  • shaun, ukshaun, uk Posts: 1,050member
    Quote:
    Originally Posted by AppleInsider View Post


    Instead, he suggested Apple invest more of its resources into obtaining content for iTunes.



    Everything that's available on BluRay and DVD should also be available on iTunes.
  • shaun, ukshaun, uk Posts: 1,050member
    Quote:
    Originally Posted by AppleInsider View Post


    Apple "makes its month from hardware," Cook stated.



    I don't understand that. Apple makes great software when they want to. If they're genuinely not interested why not merge the current products into the Filemaker business. At least we might get more frequent updates and new versions. There is a lot of money to be made in software. The better the software the more it encourages people to buy the hardware to get the great software.



    PS Never heard that expression before.
  • dcsimagesdcsimages Posts: 55member
    Quote:
    Originally Posted by cvaldes1831 View Post


    No, your mother is an exception.



    According to the proxy statement issued in January, there were only 28,500 shareholders of record as of late December 2011. My guess is that a healthy chunk of those shareholders were actually Apple employees, via the company's Employee Stock Purchase Plan (ESPP), mostly owning small quantities since it's a percent of the employee's salary. So let's say that there are about 25,000 non-employee shareholders.



    70% of the float is held by institutional investors, guys like Fidelity, Vanguard, BlackRock, State Street. According to Yahoo Finance, there are about 1700 institutional holders.



    So really, there are probably about 23,300 non-employee retail shareholders. In a country of over 313 million people, that means one out every 13400 people is a direct shareholder of AAPL. That's not even 0.0075% of the population.



    You really spent time doing research to make that calculation?



    Why stop at the US population? Anyone in the world can buy Apple shares. Why don't you go look up the exact current world population and tell what that percentage is.



    <johncleese> stupid git </johncleese>
  • SpamSandwichSpamSandwich Posts: 24,260member
    Quote:
    Originally Posted by JDW View Post


    Well, if dividends are only going to "preferred shareholders" then I want Cook to explain to me how I can become one. And if such is not possible, then it is clear we would have a situation where a small group of wealthy, elitest "preferred shareholders" are getting yet more on top of what they already have. In such a case, how is making that small group of wealthy elite even more rich via Dividends better for Apple or AAPL stock? It would seem only logical that a Common Stock Dividend (i.e., share the wealthy with everyone who owns AAPL) would be the best course of action, if a Dividend was deemed "good" at all.



    This was the question/suggestion of a stockholder at the meeting. It was not the word of Tim Cook or anyone at Apple. Remain calm.
  • macarenamacarena Posts: 318member
    My thoughts on this issue are very different. I think Apple is in the process of totally changing what the company is about.



    In 5 years, I would be surprised if hardware accounts for the major portion of Apple's revenues. I think it will still account for a major share of profits, but the revenues will come from other areas - primarily services and content.



    Apple is already into iAd, and it is just a matter of time before they enter search to really compete with Google. It makes tremendous sense for Apple to enter search as a hobby. If nothing else, it will spook the shit out of Google.



    Expect iTunes to become the iShop - a bigger and more diversified Amazon than Amazon.com. It will offer books, magazines, music, movies, TV shows, educational content, electronics, etc. But the other things will be even bigger - Siri based services like Ticket reservations, hotel booking, and possibly a foray into selling general products using Siri - basically everything under the sun, etc. It will also enter financial services in a major way with NFC based wallet. They will be forced to compete with Amazon to put pressure on Amazon in the tablet space.



    At the end of the day, Amazon.com is a logistics game. And Tim Cook is a genius in logistics. Apple is going to do this, just to ensure that Amazon focuses less on the Kindle and more on its core business.
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