Apple drops Earnings Per Share guidance because outstanding shares are in flux - Page 3

That compensation -- almost all of it in long-term options and a few million in actual salary, with the options perhaps underwater at this point -- is a pittance given how the stock performed in 2011-2012 under his watch. (Incidentally, he refused to take dividends on his stock.) Take a look at his compensation for the current year. The US would be lucky to have more CEOs like that.

You class envy types are pathetic.

So you are saying the over 400 million dollars he sold them for is a pittance?  Now I am envious if you can say that.

 

My original response was to Tim not getting enough recognition.  I'm merely pointing out he is EXTREMELY well paid for what he does.

 

Class envy?  So I assume you agree it is okay for a board of directors to decide what to pay CEOs, guys they are friends with and golf with.  That's just crony capitalism, but I guess you see it differently.  Clearly business is a pyramid, my suggestion would be that the top not be so far from the bottom.  However, I would agree, historically power hungry people tend to justify being pigs about wealth.

 

Have a good one.

Most of the increase in Apple's cash horde over the last year has been overseas, but they had enough locally for a 4% dividend or so.  A year ago Apple had 33 billion in the US and 66 billion overseas, now it has 43 billion locally and 94 billion overseas.  

 

Lol, okay so it it was 112 million last year.  Clearly underpaid and under recognized according to you.  Great points. 

Sorry, I meant "3% or so"
 

I'd recommend everyone read this, one of the most rational pieces I've read re Apple + expectations

 

http://www.slate.com/articles/technology/technology/2013/01/apple_earnings_report_don_t_let_its_stock_slump_fool_you_the_company_is.html

I know this is the Internet. But please don't make up stuff. It just ruins any credibility you might want to build.

Please check on how much he sold in 2012 and get back to us, will you? We'll interpret your silence as being caught out making outlandish statements.

Lol, I'm a shareholder how about you?  I guess I should have sold when Cook did, could have bought back 33% more shares now.

 

It wasnt about what he was earning it was in response to people saying he doesnt get enough recognition.  I could care less what he makes, but when people start saying he isnt well recognized enough it's just ridiculous.  Clearly his compensation more than recognizes his contributions.

 

Funny, I didnt realize so many people felt bad for TIm and his lack of recognition.

 

He's being blamed for things that aren't his fault and ignored for successes that are. 

 

Money ≠ recognition. 

 

When did 2 times 2.65 become greater than $8?  After the next payment in Feb it will be $7.95...still not over $8 by my math.

You should talk about your ability to add after you can substantiate your claim that Cook sold $400M worth of stock in 2012! 

Edited by anantksundaram - 1/27/13 at 12:04pm

This is one of the best Discussions on AI that I've seen! Educational! Bravo guys! Please keep it going!  

 

In any case, this latest AAPL Craze will fade away into history, and then anything below $700 will be as scare as being under $500 is now! 

 

AAPL Investors will be rewarded well. Those who didn't panic and sold will have an even sweeter taste, for their Faith in AAPL will be re-validated yet again!

Those who Sold, and Bought back, coming out ahead, will feel like victors, because of their lucky timing! 

 

That article AAPL: ‘Flash Dump’ Closes Stock at $439.88, Says ZeroHedge - Tech Trader Daily - Barrons.com http://j.mp/VAovkv 

 

Who said anything about spending $100 billion in 2006? If I was on the board of directors of a publicly traded company and saw my stock getting hammered by massive economic turmoil, I'd certainly recommend a stock buyback if the underlying value of the company was solid (which it absolutely was at the time).

 

Link (explainer on share repurchase / stock buyback programs):  http://www.investopedia.com/articles/02/041702.asp

Edited by SpamSandwich - 1/27/13 at 1:24pm

I love all this horse-shit narrative about APple not innovatiing since Steve's death and 'no new products'. 

 

The shortest length of time in Apple's history between the launch of 2 completely new product lines is 3 YEARS between the iPhone and the iPad. That was an anomally, not a trend.  Everything else, including iPod to iPhone, Mac to iPod, etc took much, much longer, yes under Steve Jobs.  Yet people are acting as if there's been this shockingly long amt of time since Apple turned a market upside down. The iPad, which literally changed the direction of the entire computing landscape, only came out in 2010. Also, phones and tablets were the "low lying fruit" so to speak, in terms of products that can be re-invented. It's not like there's a list of other form factors or industries that can be overhauled in this way. Apple refreshed pretty much their ENTIRE product lineup last year, significantly so. They've been busy, and haven't been sitting on their asses. Just off the top of my head, in 2012:

 

- Completely redesigned 15" MBP with highest resolution laptop  of that size in the world

- Completely redesigned 13" MBP with highest resolution laptop of that size in the world

- New iPad with Retina display- again, massive achievement

- Completely redesigned iPod touch

- Completely redesigned iPod nano

- Completely redesigned iMac- most significant change in years

- Completely redesigned iPhone- 1st change in screen size/aspect ratio since inception

- iPad mini- Completely new iPad line

- 4th generation iPad- fastest refresh in their history

- refreshed Macbook Airs

- refreshed classic MBPs

- refreshed Mac mini

- refreshed Apple TV

- Biggest Apple TV interface change in its history

- New iTunes- most significant update since it first launched a decade ago

- New iOS appstore- biggest update since it 1st launched in 2008

- iOS 6- major release of iOS

- OSX 10.8- major release of OSX

- New maps- launched a completely new mapping product from the ground up, not an insignificant accomplishment

- Transition to new dock connector + cable for all products, 1st change in the last decade

- A6 and A6X chip- custom designed chip that has set new benchmarks for performance and has gotten rave reviews from anyone who knows anything about chips

- significant updates to all OSX/iOS apps

 

 

I'm sure I'm missing quite a few things, but all this shit happened last year, and many of those products needed thousands of decisions, both large and small. I don't recall any other time in Apple's history where it's been more aggressive and active. All this, while it has faced the toughest competition in its history, by the richest companies on the planet, who are willing to sell their shit at break even just to get some marketshare. All this, and Apple posted record profits, revenues, and sales. As a human species, we're getting increasingly spoiled, cynical, impatient, as well as losing any sort of perspective. Apple has been working it's asses off, regardless of how quickly people get bored of the new shiny. Never has Apple changed its porduct line so significantly in 1 year. Beyond all these things, no doubt Apple has been working on some very major things behind the scenes, like a revamped iOS + OSX, and maybe 1 or 2 completely new product lines. But Apple has never been a company to just 'take a risk' as some people are saying, and throw something new out there for the hell of it- they will do so when they have 100% confidence in the product, have figured out how it will fit tightly with the rest of their product line, and are willing to put significant resources behind it and its marketing. If Apple releases a new product line that is universally reviewed poorly, this will have an infiintely worse effect on its brand value and stock than all the bullshit stories in the past few months. It's easy to det distracted when all other companies are releasing and promoting new gimmicks everyday (which t the end of the day have zero effect in fundamentally changing anything) but Apple will never, and should never do this. So please, if you're 'bored' with Apple, please jump shit. God knows there's plenty of other products out there. Apple has been firing on all cylinders this year, any rational, reasonable person who has any historical context about the company and the most fundamental understanding of the industry and how things work should realize this. 

Edited by Slurpy - 1/27/13 at 10:37pm

If you read the thread, especially the posts by anant and me, you will find the answer.

Do investors even want to buy this stock at all? The constantly shrinking P/E is already screaming that Apple has no future growth potential. Isn't that some sort of a warning flag to stay away from the stock? Wall Street has openly said that Samsung is going to practically destroy Apple's iPhone by being able to flood the smartphone market with better and cheaper smartphones thanks to exceptionally fast manufacturing techniques which Apple can't possibly match. Whereas Apple always has constant delays, Samsung can push their smartphones out as fast as demand warrants. Samsung doesn't even have any retail stores to speak of yet their smartphones are just flying off the shelves at a record's pace.

Apple does everything at a snail's pace like some big ocean liner trying to accelerate or turn. Apple just can't keep up with Samsung's nimble smartphone team which puts out a half-dozen models for every one model Apple can barely assemble on time. There's always these huge waiting times for products. That's why Apple has fallen from grace so quickly. The company moves the speed of a glacier where much smaller and aggressive companies can run rings around them. Wall Street can't tolerate companies that are so slow to meet rapidly changing market conditions. Apple is going to need more than buybacks to make their stock worth buying, that's for sure.

Could someone enlighten me. What benefits do company get for buying back their stock?

I am well aware of the difference, share price, EPS etc benefits to Investors... But what about the company on itself?

The 2nd questions could Apple theoretically buyback itself? Say that Apple somehow secure a loan of $150B, a total of $300+ cash along with a few partnership, they could spread themselves out with many small company and basically buyback all of its stock using those money?

I think you are not realizing that the company 'itself' is composed of investors. e.g. say 100 shares are owned by 100 people (1% each). Now if the company buys 20 shares, 80 are owned by 80 people (1.25% each). Or 'view it' as if the 20 shares are distributed among the 80 remaining investors.

I do, that is why the 80 investors would have a more %. That is benefits to investors. Not the company though.

 

Jobs once called Buffett and asked what he should do with all the cash. Buffett told him to buyback shares hand over fist.  Jobs said thank you.  Then he decided there was not going to be a buyback and started this hoarding of cash.  He ignored Buffett's advice.  This is one reason I'm quite sure Buffett never bought Apple stock.  They have no idea how to allocate the capital they accumulate.

 

It loses net 2% to inflation annually (3% inflation minus 1% return in t-bills).  Had Apple took Buffett's advice and allocated just 1/3 of the domestic cash for buybacks the effective EPS today would be over $100/share.  Nice move apple..how is that cash working for you in the bank?

I don't know if it's theoretically possible, but it has never happened AFAIK for several reasons:

1. The company would have to buy all the shares at once. If it buys shares in the market, as more shares are purchased, the value of the remaining shares increases (since the true intrinsic value of the company doesn't change - other than cash/debt). In the case of AAPL, they could buy a few million shares (maybe tens of millions) for $500 or so. But then the price would start climbing. When you get to the extreme, let's say that they had purchased all the shares but one. That share would be worth in excess of $300 Billion.

2. If a company has no future but has cash worth more than the share values, liquidation might make sense.

3. If the company has a future but the cash value is higher than the market cap, a cash distribution or buyback is the most common practice. In some cases, a private equity group might buy up all the shares (usually at a premium over market price, though).

4. There's no mechanism for the returns to be distributed. If the company owned itself, who gets the profits? Eventually, the management team would presumably want some share of the profits - which might lead to shareholder suits from the previous shareholders (who would claim that the stock was artificially under-valued).

 

Wall Street also lied and said that Apple had an extra week last quarter (instead of having one fewer week as in reality). 

 

I'm pretty sure you can't trust a single thing said by any analyst anywhere for any reason. Trust the numbers that Apple puts up every quarter. Nothing is happening to them any time soon, regardless of how many phones Samsung lies (because they do, and have, and have been caught) about shipping (not selling).

Check out this quote from an investment email I received today:

9:15 AM 1/28/2013 - StreetInsider
Will Apple (Nasdaq: AAPL) trading to annual lows be a boon for dividend investors?

The latest data out of Cupertino, CA-based Apple had the company adding about $16 billion in cash through the quarter, bringing its war chest up to $137 billion, or $145 per share. When cash is taken into consideration, shares trade for seven times FY13 earnings expectations, or 10 times ex-cash.

Apple initiated a dividend program last year, paying out $2.65 per share every quarter. The good news is that the yield on that payout has improved to 2.4 percent; the better news is that that yield might move even higher.

One analyst from Bernstein thinks that apple should "significantly" increase its dividend to three percent or more, though the best number might be a four percent yield, or annual dividend of $18 per share. The increase would put Apple with a payout ratio of 40 percent projected FY13 EPS, from about 25 percent now. Other biggies like Pfizer (NYSE: PFE) and General Electric (NYSE: GE).

Apple gets about 30 percent of profits from U.S. sales, notes Barron's this morning. That means Apple might need to repatriate foreign earnings and pay taxes, and/or tap its $43 billion of domestic cash reserves. The Bernstein analyst thinks Apple should mull selling about $50 billion in debt, enough to take its outstanding share count down by 10 percent or increase its dividend for the next five years. He thinks Apple could garner a rate under 2 percent for 5- and 10-year bonds.

Given the trouble Apple had through the 1990s, the company has become and remained cash-conservative. Plans to payout about $45 billion the next three-years isn't a lot for a company netting $40 billion annually. Some speculation still surrounds Apple losing market share in key areas like the U.S. and China, while international growth opportunities are becoming scarce without a lower-cost device. There are positives for Apple too, including the possibility of a new TV set sometime in 2013.

With shares dropping 38 percent over the last few months, investors might be looking for more than just promises when it comes to getting back behind Apple. The company could induce more confidence with a larger payout, something its share prices is desperately longing for.

The stock is down about 0.5 percent early.

If an analyst has the same wacky idea I had, it is creepy and I take it back.