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Apple responds to Greenlight lawsuit, says preferred stock won't be barred - Page 2

post #41 of 69
2/7/13 at 4:11pm
Einhorn... just sell already and go away! If you screw up Apple by rushing them into anything, I'll be lining up to sue your ass pal!
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post #42 of 69
2/7/13 at 4:12pm
Quote:
Originally Posted by mrr View Post

So how does this impact existing Apple stock holders?

Shareholders meeting Feb 27 - there's a couple or three things to be decided there.

They prolly will kick around some options that come out of that at BOD level - then make a statement.

I dunno. - within a month it should be pretty clear what the result will be.

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post #43 of 69
2/7/13 at 4:23pm
Quote:
Originally Posted by KingChael View Post

Terrific news for AAPL longs.  About time a brilliant investor and hedge fund titan like Einhorn step in and open the eyes of the InCompetence in Cupertino.  Enough destruction of shareholder value, Apple's image and its public perception, and it only took several months late. 

The next step is to strike the Samdung dogs back, and start being the leader in innovating again.  David Einhorn for special advisor to Tim Cook!

You must be an Analyst, clueless and crooked.
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post #44 of 69
2/7/13 at 4:34pm
Quote:
Originally Posted by KingChael View Post

The reason why this stock has been plummeting is because the bus was over levered, over crowded with hedge funds who thought AAPL would continue to innovate and keep their massive profit margins.  Well the street doubts AAPL's ability to innovate in the near-med term until it proves itself again, competition has clearly caught up, and hedge funds scrambled to get out at the same time.  That's not manipulation. 

So AAPL's margins are shrinking fast, demand is flattening, innovation is in question so why would any hedge fund want to pour  any more money into this broken stock when so many hedgies are still invested in it already?  

This was a growth stock, not anymore and the street has voted.

To anyone who still believes that the lower profit margins are due to "competition has caught up" or "flattening demand" I would strongly suggest reading
http://www.asymco.com/2013/02/05/margin-call/
Edited by galex69 - 2/7/13 at 5:04pm
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post #45 of 69
2/7/13 at 4:44pm
Quote:

Originally Posted by KingChael View Post

 

The reason why this stock has been plummeting is because the bus was over levered, over crowded with hedge funds who thought AAPL would continue to innovate and keep their massive profit margins.  Well the street doubts AAPL's ability to innovate in the near-med term until it proves itself again, competition has clearly caught up, and hedge funds scrambled to get out at the same time.  That's not manipulation. 

 

So AAPL's margins are shrinking fast, demand is flattening, innovation is in question so why would any hedge fund want to pour  any more money into this broken stock when so many hedgies are still invested in it already?  

 

This was a growth stock, not anymore and the street has voted.

 

To anyone who still believes that the lower profit margins were due to "competition catching up" or "flattening demand", I would strongly suggest reading Horace Dediu's analysis "Margin Call": http://www.asymco.com/2013/02/05/margin-call/

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post #46 of 69
2/7/13 at 4:52pm

OK, two questions from a normal person who doesn't understand this financial stuff:

 

1) What is Einhorn's end-game?  Is he just trying to make more money for his fund?  And does his argument make sense?

 

2) Why is Apple having so many billions a bad thing?  That would seem like a good thing.

 

Thank you, in advance.

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post #47 of 69
2/7/13 at 5:09pm
Quote:
Originally Posted by AaronJ View Post

OK, two questions from a normal person who doesn't understand this financial stuff:

 

1) What is Einhorn's end-game?  Is he just trying to make more money for his fund?  And does his argument make sense?

 

2) Why is Apple having so many billions a bad thing?  That would seem like a good thing.

 

Thank you, in advance.

1) Unclear at this point, on one hand he seems to be the de facto spokesperson for shareholders (self appointed) otoh he has launched a lawsuit with his own company Greenlight.

Yep.

Nope IMO - but I can see Apple taking it on board. They do want to listen to shareholders.

 

2) Not a bad thing. A very good thing.

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post #48 of 69
2/7/13 at 5:11pm
Quote:
Originally Posted by RobM View Post

1) Unclear at this point, on one hand he seems to be the de facto spokesperson for shareholders (self appointed) otoh he has launched a lawsuit with his own company Greenlight.

Yep.

Nope.

 

2) Not a bad thing. A very good thing.

 

Thank you.

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post #49 of 69
2/7/13 at 5:50pm
Quote:
2) Not a bad thing. A very good thing.
It is a very good thing if you want the company to not be beholden to anybody else. It is a good thing if it is accurately reflected in the stock price.

It starts to be a bad thing when investors don't see it as a source of value, especially when that trend accelerates with a declining PE and increasing cash horde.
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post #50 of 69
2/7/13 at 6:03pm
Quote:
Originally Posted by aaarrrgggh View Post


It is a very good thing if you want the company to not be beholden to anybody else. It is a good thing if it is accurately reflected in the stock price.

It starts to be a bad thing when investors don't see it as a source of value, especially when that trend accelerates with a declining PE and increasing cash horde.

True. I think that Apple have likely thought this through by now (hell there has been enough noise about it) and will begin to address stockholder concerns Feb 27.

Let it come to a head at the meeting and deal with it quickly thereafter. IMO they're playing it the right way. Some short term pain for some, sure. Long term fundamentals are good.

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post #51 of 69
2/7/13 at 6:55pm
Quote:
Originally Posted by lkrupp View Post

 

No they don't. Shareholders expect profits at any cost so running the company into the ground for short term profit would suit them just fine. To hell with running it "well." That would mean looking to the future at the possible expense of profits and we can't have that can we. Gimme that money now¡

Ahhh, the HP way of doing things!  See where it got them!!

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post #52 of 69
2/7/13 at 7:14pm
What I read about preferred stock... is there something about a proposal for preferred stocks that's not absolutely reprehensible? It seems like a way to create a second tier of stock that (1) presumably I won't be owning and (2) gets more bang for the buck than my stock. How is that okay? If Apple wants to give money back, great. Dividends, you bet. But don't argue for separate but unequal avenues.
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post #53 of 69
2/7/13 at 7:27pm
Quote:
Originally Posted by SpamSandwich View Post

 

I don't consider myself a moron and I don't want them to raise the dividend. I think they actually do have plans for that cash and self-serving lawsuits by suspect investors to goad Apple into acting in a manner that is not beneficial to the company should be squashed.

 

Just so I'm clear you realize that increasing the dividend wont impact the current reserve and will only slightly slow down how fast it increases, but you still don't want them to increase the dividend because they might want to...what? buy a small country? Exxon?  Increasing the dividend is the only thing that makes sense and is in no way detrimental to the company in any meaningful way.

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post #54 of 69
2/7/13 at 9:27pm
Quote:
Originally Posted by aaarrrgggh View Post


It is a very good thing if you want the company to not be beholden to anybody else. It is a good thing if it is accurately reflected in the stock price.

It starts to be a bad thing when investors don't see it as a source of value, especially when that trend accelerates with a declining PE and increasing cash horde.

 

This is what I don't understand.

 

It means that Apple is free to do what it wants.  All that money means that if, say, they want to buy a company with resources, they can.  If they want to buy patents, they can.  If they want to do anything, they can.

 

I don't understand how having money is a bad thing.

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post #55 of 69
2/7/13 at 9:48pm

The problem for Apple is the SIZE of the cash reserve. People are inherently greedy  - they see that and want some of it. Given the amount of economic pain worldwide their greed or need for money is understandable.

What is laughable is Einhorns self appointed spokesman role. FO - long term AAPL investor with a history shorting stock.

If I had the misfortune of having money tied up with Greenlight I'd be bailing out of there faster than you could say, "Lemming". Actions like this from a middleman do nothing other than reveal them for what they are. This punk looks like he's been silver spoon fed from day one.

That said there are some positives to his character - see his wiki David Einhorn. You can only afford to be magnanimous when you've got heaps already though. lol

 

Apple navigated and developed its way into this position - Given their history I would trust their BOD over and above 99.9% of  the other corporates out there to do the best for the company and shareholders.


Edited by RobM - 2/7/13 at 10:48pm
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post #56 of 69
2/7/13 at 11:07pm
Thanks for pointing to his wiki page, RobM. Bit of a two faced character, this guy. He donated often, but at the same time makes money of the misery of others. Interesting read, his wiki.
Even if you disagree, he is entitled to his opinion, isn't he? Just as you're entitled to your blinders? (Stelligent)
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Even if you disagree, he is entitled to his opinion, isn't he? Just as you're entitled to your blinders? (Stelligent)
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post #57 of 69
2/7/13 at 11:27pm

Yea - sorry - i would have posted the link but my ipad was on about 1 and I couldnt risk searching without my lofty words of wisdom being lost forever. lol

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post #58 of 69
2/8/13 at 4:37am
Quote:
Originally Posted by AaronJ View Post

This is what I don't understand.

It means that Apple is free to do what it wants.  All that money means that if, say, they want to buy a company with resources, they can.  If they want to buy patents, they can.  If they want to do anything, they can.

I don't understand how having money is a bad thing.

It isn't. It's just a matter of a few shareholders who are never happy no matter what Apple does. Their argument is silly because if they want to do something with the accumulated cash, they can sell some of their shares and pay capital gains tax rates rather than income tax rates (historically, capital gains rates have been lower). The end result is the same, at least to the extent that the cash is reflected in the share value.
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post #59 of 69
2/8/13 at 4:48am
I don't think issuing perpetual preferred stock is in the best interest of the company. Adding a preferred stock would just lower the value of the common stock anyways. I think Apple wants to see itself at a $1000 stock price, probably a reason they haven't issued a stock split. The best thing Apple should do is to buyback more shares. Issuing a buyback will lowers the total number of outstanding shares; lowering supply and increasing demand for the stock. If they believe in their company and how undervalued it is right now, then issuing a large buyback would be the best way to convince investors.
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post #60 of 69
2/8/13 at 6:13am
Quote:
Originally Posted by SpamSandwich View Post

 

No... That would result in charges of "unfair competition", "dumping" or some such nonsense from government overseers.

Damn, someone should tell Bezos and Page that they are not allowed to sell at cost.

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post #61 of 69
2/8/13 at 6:14am
Quote:
Originally Posted by monstrosity View Post

I will continue making money from the naive!

 

Internet tales of wealth and expertise... always a good read lol.gif

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post #62 of 69
2/8/13 at 6:34am
Quote:
Originally Posted by D8V1D View Post

I don't think issuing perpetual preferred stock is in the best interest of the company. Adding a preferred stock would just lower the value of the common stock anyways. I think Apple wants to see itself at a $1000 stock price, probably a reason they haven't issued a stock split. The best thing Apple should do is to buyback more shares. Issuing a buyback will lowers the total number of outstanding shares; lowering supply and increasing demand for the stock. If they believe in their company and how undervalued it is right now, then issuing a large buyback would be the best way to convince investors.

I agree that Apple should be buying back shares like crazy.

However, I think they should split the stock. Something like 69% of AAPL is owned by institutions - which makes it more subject to manipulation. Furthermore, it limits the potential upside. A 10:1 split would make it more accessible to many shareholders.
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post #63 of 69
2/8/13 at 9:33am
Quote:
Originally Posted by D8V1D View Post

I don't think issuing perpetual preferred stock is in the best interest of the company. Adding a preferred stock would just lower the value of the common stock anyways. I think Apple wants to see itself at a $1000 stock price, probably a reason they haven't issued a stock split. The best thing Apple should do is to buyback more shares. Issuing a buyback will lowers the total number of outstanding shares; lowering supply and increasing demand for the stock. If they believe in their company and how undervalued it is right now, then issuing a large buyback would be the best way to convince investors.

You raise an interesting point. Yes, adding a new group of claimants to cash flows could, in principle, lower the claim to cash flows of the lowest-tier claimant (which is what a common shareholder is), and therefore lower its value.

However, this would not be the case here. Einhorn's proposal is to hand out the preferreds to current shareholders only, in proportion to their holdings of common stock.

However, here's a tax angle to this that makes it very self-interested from his standpoint. Assuming is hedge fund is registered as a corporation, he does not have to pay taxes on the preferred dividends (that's what the tax law says). However, you and I will owe taxes on it.
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post #64 of 69
2/8/13 at 1:46pm
Quote:
Originally Posted by jragosta View Post


I agree that Apple should be buying back shares like crazy.

However, I think they should split the stock. Something like 69% of AAPL is owned by institutions - which makes it more subject to manipulation. Furthermore, it limits the potential upside. A 10:1 split would make it more accessible to many shareholders.

Finally, someone who gets it. A 10:1 split would indeed take this stock out of it's current slump, and swiftly.

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post #65 of 69
2/8/13 at 4:24pm
Quote:
Originally Posted by tkell31 View Post

 

Just so I'm clear you realize that increasing the dividend wont impact the current reserve and will only slightly slow down how fast it increases, but you still don't want them to increase the dividend because they might want to...what? buy a small country? Exxon?  Increasing the dividend is the only thing that makes sense and is in no way detrimental to the company in any meaningful way.

 

I don't know Apple's reasons, however I personally believe a larger shock to the stock market and the economy is coming, probably this year. I can't tell you how many investors I've heard express their opinion that 2013 will be another really bad year. Start looking around for 2013 economic projections and pay attention to who is saying what. I automatically dismiss the projections of politicians and those who have a vested interest in the maintenance of the illusion that our economy is on the mend.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #66 of 69
2/8/13 at 4:26pm
Quote:
Originally Posted by Potsie Webber View Post

Finally, someone who gets it. A 10:1 split would indeed take this stock out of it's current slump, and swiftly.

 

LOL! Ridiculous.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #67 of 69
2/10/13 at 7:40am
Quote:
Originally Posted by SpamSandwich View Post

 

I don't know Apple's reasons, however I personally believe a larger shock to the stock market and the economy is coming, probably this year. I can't tell you how many investors I've heard express their opinion that 2013 will be another really bad year. Start looking around for 2013 economic projections and pay attention to who is saying what. I automatically dismiss the projections of politicians and those who have a vested interest in the maintenance of the illusion that our economy is on the mend.

 

Absent a Mayan like collapse of our economic system I'm pretty sure we'll get through 2013 in about the same shape we were in last year plus or minus 10%.  Are you seriously suggesting Apple will need to burn through more than 137 billion dollars to survive 2013?  Guess what, in that scenario we're screwed anyway so is .615 billion a quarter going to change what happens in your apocalyptic scenario?  No, so how about Apple go about what a reasonable and discount the .1% chance the world's economy collapses this year.

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post #68 of 69
2/10/13 at 11:10pm

Sorry, I haven't read this article or thread but I posted something under another thread mentioning Greenlight. Some mentioned that they like my post and should be moved here. 

 

Sorry didn't read the thread but here it is....

 

"The whole lawsuit is about the issue of preferred stock being tied to other issues that are being voted on at an upcoming shareholders meeting.

 
I can't find the wsj article now but basically the there was issue A and issue B. Apple figured the 99% of the people who voted for issue A would also vote for issue B and vice versa. Also 99% of the people voting against issue A would vote against issue B. 
 
So Apple decided to tie those issues together  and there is one vote, Yes or No, to make the voting forms easier with one check box. 
 
Then Apple amended that article to include a 3rd issue to be voted on. Maybe bc it was convenient or they wanted it to pass bc the the people who vote yes on issue A and B would also vote for issue C - restricting the Board of Directors from issuing preferred stock without the majority shareholders approval. 
 
Einhorn's lawsuit is about the inclusion of issue C with the other two issues. He thinks that the vast major that support issues A and B also support issue C or don't care. Issue C is less related to A or B than they are to each other so he is suing to separate issue C, saying it should be voted on by itself. Which on principle I agree with.
 
WSJ
"Apple proposed the preferred stock amendment after a broader review of its corporate governance practices and independent of Mr. Einhorn’s proposal, people close to the company said.
 
If it were to succeed with the proposal, Apple would become an outlier. According to FactSet SharkWatch, 95% of all companies in the S&P 500 have the “blank check” provision for issuing preferred stock without a shareholder vote that Apple is attempting to toss out."
 
Long story short, Apple wants to become more democratic in regards to its stockholders, restricting actions of its Board of Directors. If the issue passes, unless a majority of shareholders agree, the Board can't do the things that people like Einhorn want without approval by the majority. Why should someone who owns less than 1% of get more influence than the collective 80% ( chose random number )?
 
This is all about super rich people like Einhorn having more influence and input to get Apples' Board to get what they want and benefit from.....
 
Apple is trying to support the little guys here, from people with social and political influence like Einhorn. Yet the WSG and NYT never cover that aspect of the story."
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post #69 of 69
2/10/13 at 11:20pm
Quote:
Originally Posted by Spacepower View Post

This is all about super rich people like Einhorn having more influence and input to get Apples' Board to get what they want and benefit from.....

In this case it's ok to post without having read the article or thread, which I normally always advise people to do. Good post Spacepower!

So, there's the well-formulated reason why I dislike people like this Einhorn fellow.
Even if you disagree, he is entitled to his opinion, isn't he? Just as you're entitled to your blinders? (Stelligent)
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Even if you disagree, he is entitled to his opinion, isn't he? Just as you're entitled to your blinders? (Stelligent)
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