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Apple's $17B six-part bond offering is largest in history [u]

post #1 of 54
Thread Starter 
Apple will sell $17 billion in debt in its first bond offering since 1996, as the company borrows funds to fuel its $100 billion capital rewards program.

Bond


Update: Apple's bonds will amount to $17 billion, it was confirmed later on Tuesday by The Wall Street Journal. That number is in fact a new dollar amount record for a U.S. corporate offering.

The iPhone maker is planning to issue date with floating-rate notes maturing in 2016 and 2018, along with fixed-rate bonds with interest dates in 2016, 2018, 2023 and 2043, Apple revealed in a 424(b)(2) filing filing with the U.S. Securities and Exchange Commission on Tuesday.

There is strong demand for Apple bonds, which could allow the company to sell as much as $20 billion in debt, Tom Tucci of CIBC World Markets Corp. told Bloomberg. If Apple were to reach that number, it would be the largest dollar-denominated offering in history.

Apple has $145 billion in cash, but a majority of those funds are overseas and would need to be repatriated according to U.S. tax laws in order to be used for share repurchases. As a result, Apple has instead opted to borrow, in addition to using its domestic cash, to fund its $100 billion capital rewards program.

While Apple's bond sale could become the largest in history, the company's share repurchase authorization plans are already record setting. Apple plans to repurchase $60 billion in shares through the end of calendar 2015, accounting for the bulk of its $100 billion capital initiative.

The remaining money will be used by Apple's quarterly dividend, which was bumped 15 percent last week to $3.05 per common share.

"We are very fortunate to be in a position to more than double the size of the capital return program we announced last year," Apple CEO Tim Cook said in a statement. "We believe so strongly that repurchasing our shares represents an attractive use of our capital that we have dedicated the vast majority of the increase in our capital return program to share repurchases."
post #2 of 54

And on the mention of yet another "largest in history" milestone from Apple, the stock falls $200 per share.

Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
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Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
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post #3 of 54
Quote:
Originally Posted by Tallest Skil View Post

And on the mention of yet another "largest in history" milestone from Apple, the stock falls $200 per share.

I hadn't checked AAPL today and you just nearly made me do a very childish thing!
Been using Apple since Apple ][ - Long on AAPL so biased
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Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini, SE30, IIFx, Towers; G4 & G3.
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post #4 of 54
I find the floating rate component of the issue to be interesting. Initially, I thought that it was a bit weird, but thinking some more about it, the move makes sense.

Coupon rates will be very low for sure, but the real reason is, I am guessing, it will be a natural hedge against the interest on cash in the next few years.
post #5 of 54
I'm wondering... why has no one more knowledgable about finance explained what the impact of a $60Bn share buy back is?

Foolishly it seems to me if the market capitalisation of AAPL is $413Bn then this effectively would increase value of the other shares by 15%. Or in other words a mere $60 dollars per share.

As this was announced when the share price had fallen to about $400, then it looks as though it will only take a small additional rise in the price to use up that capital.

In this case... why is Apple issuing $20Bn that they have to pay back later?

Maybe it makes sense to use this tactic if there is a future good use for the cash held abroad, e.g.: in capital investment.

But I've read no analysis of what this all means, and I'd like someone more knowledgable to explain it to myself and other shareholders.
post #6 of 54

Companies buy back their shares when they do not have anything better to spend their cash on from an ROI perspective.  Which is sad; I would think they would invest extensively in new product development.  This screams they do not have anything nor any ideas on the next game changing product.  

post #7 of 54
Paul -

1. As long as they get a low enough interest rate, and the stock purchase price is low enough, the buyback will be cash flow positive (i.e. less paid out in interest than the dividends on the repurchased stock).

2. Apple is going to get such crazy low interest rates that later, if inflation starts to pick up, they can buy back the bonds at a huge discount (the value of bonds on the open market drop each time you get an interest rate rise).

3. Your math is correct, except that when you do a stock buyback you reduce the pool of shares that get frequently traded. Apple is buying back a huge chunk (hopefully almost half) of the 300 million share pool, which will dry up available shares on the market and have more than the effect you would expect.

4. There is a good use for the cash abroad, buying up/funding the supply chain possibly, and other acquisitions.

---

ex-iphone owner: R&D spending is up huge this year, they just make so much profit that it swamps out any increase.
Edited by e1618978 - 4/30/13 at 8:49am
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post #8 of 54

So why can't Apple buy it's shares back in foreign markets?

That Russian guy just bought $100 million... did he have to pay US tax on that money to get AAPL shares?

post #9 of 54
Quote:
Originally Posted by realpaulfreeman View Post

I'm wondering... why has no one more knowledgable about finance explained what the impact of a $60Bn share buy back is?

Foolishly it seems to me if the market capitalisation of AAPL is $413Bn then this effectively would increase value of the other shares by 15%. Or in other words a mere $60 dollars per share.

As this was announced when the share price had fallen to about $400, then it looks as though it will only take a small additional rise in the price to use up that capital.

In this case... why is Apple issuing $20Bn that they have to pay back later?

Maybe it makes sense to use this tactic if there is a future good use for the cash held abroad, e.g.: in capital investment.

But I've read no analysis of what this all means, and I'd like someone more knowledgable to explain it to myself and other shareholders.

 

Buying back $60B in shares is an attempt to boost Earnings Per Share.  It gives the impression that the company is doing better that it really is when compared to previous EPS quarters that contained more outstanding shares of stock.  

 

More than likely it's cheaper for Apple to sell Debt than to try and convert it's overseas cash into money within the US system.  That's the only reason it makes sense to issue Debt rather than use the cash they have to conduct the buy-back.  I can't see the unused cash earning more money that the interest rate from the debt.  It's got to be that they would take a significant financial hit if they move the money into the US system.  If it's not then they are being dumb; and I can't believe Apple is dumb.  

post #10 of 54
Quote:
Originally Posted by Ex iPhone Owner View Post

Companies buy back their shares when they do not have anything better to spend their cash on from an ROI perspective.  Which is sad; I would think they would invest extensively in new product development.  This screams they do not have anything nor any ideas on the next game changing product.  

No it doesn't. You've erroneously jumped to a conclusion that if a company has more money than it can spend in a country that it must not have any ideas.

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"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #11 of 54
Quote:
Originally Posted by Ex iPhone Owner View Post

Companies buy back their shares when they do not have anything better to spend their cash on from an ROI perspective.  Which is sad; I would think they would invest extensively in new product development.  This screams they do not have anything nor any ideas on the next game changing product.  

 

Or it "screams" that the next game changing product won't cost $100 billion to develop any more than the Mac, iPod, iPhone, or iPad did.

post #12 of 54
Quote:
Originally Posted by Ex iPhone Owner View Post

Companies buy back their shares when they do not have anything better to spend their cash on from an ROI perspective.  Which is sad; I would think they would invest extensively in new product development.  This screams they do not have anything nor any ideas on the next game changing product.  

 

My finance professor described stock buy-backs the same way a few years ago.  However, I think it is unprecedented to have over $100B+ in "cash" and growing.  Apple doesn't have any foreseeable need for more than $100B, so they are returning that money to shareholders.  It is absurd to characterize it as the above poster did however.

 

Back to the original question about what buying shares will do.  Apple has about 945 million shares outstanding, and plans to buy back $60B worth of shares over the next few years.  So let's imagine they are spending $10B this quarter, and assume an average purchase price of $450 (it's going up now, right?).  That represents 22 million shares.  So after this round of purchasing there will only be 923 million shares.  After spending the whole $60B, there could be 800 million shares (or 850MM or 600MM, who knows, it depends on future share prices).  Every share will be intrinsically more valuable since it represents a larger share of the Apple pie (sorry).

 

Alternatively, the money Apple sends to investors via dividends sets an expectation for investors that owning Apple shares will provide a stream of future cash payments.  Some investors are looking for that and will be attracted to Apple shares for that reason.  On the other hand, if Apple ever lowers it's dividend in the future, expect the stock to crater.  For that reason, the stock buyback (at the currently super low prices) makes great sense compared to trying to unload tends of billions of dollars solely as dividends,

post #13 of 54
Quote:
Originally Posted by realpaulfreeman View Post

I'm wondering... why has no one more knowledgable about finance explained what the impact of a $60Bn share buy back is?

Foolishly it seems to me if the market capitalisation of AAPL is $413Bn then this effectively would increase value of the other shares by 15%. Or in other words a mere $60 dollars per share.

That's a reasonable first level estimate. IF the investors had a fixed P/E ratio in mind and you take 15% of the shares off the market, then the P/E would drop - and investors would bid the price up by roughly 15% to reach the 'equilibrium' P/E ratio.

However, that's too simplistic - especially in light of Apple's incredibly low current P/E ratio. Investors have apparently lost confidence in AAPL and have driven the P/E to ridiculously low levels. A large part of that is confidence. Apple's use of $60 B to buy stock is also an effort to convince investors that "even with our incredible profitability, we don't see any immediate investments that are better than buying our own stock". The hope is that this will spur confidence and increase the share price by more than the percentage of shares being repurchased.
Quote:
Originally Posted by realpaulfreeman View Post

As this was announced when the share price had fallen to about $400, then it looks as though it will only take a small additional rise in the price to use up that capital.

Not sure what you're saying. Even if the shares jump to $500 after the share buyback, that doesn't return any cash to Apple, so it is completely unrelated to the amount of cash on hand.
Quote:
Originally Posted by realpaulfreeman View Post

In this case... why is Apple issuing $20Bn that they have to pay back later?

Maybe it makes sense to use this tactic if there is a future good use for the cash held abroad, e.g.: in capital investment.

But I've read no analysis of what this all means, and I'd like someone more knowledgable to explain it to myself and other shareholders.

The logic works like this:
- Much of our cash is overseas
- We can bring the cash back, but we have to pay a 35% marginal tax rate on the tax, so we'd reduce our cash by $90 B in order to buy back $60 B in stock.
- If we borrow the money, we only pay a few percent penalty and then pay off the debt from future income. With the cash available overseas, it's low risk both for us and the bond holders. If some problem ever occurs, we can always repatriate the cash later (paying the penalty) to pay off the debt.

So the worst case scenario is that they bring back the cash at a later date and pay the tax - which is no different than bringing back the cash NOW and paying the tax (they would, however, have a very small interest expense). The best case scenario is that they easily pay off the debt without tapping the overseas cash. So the downside to borrowing is not that large.

In addition, what happens if the US government does allow a tax holiday for repatriated cash? They simply bring the cash back, pay off the debt, and get the best of both worlds.
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post #14 of 54

However you slice it, now's the time to buy.

post #15 of 54
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Originally Posted by SolipsismX View Post


No it doesn't. You've erroneously jumped to a conclusion that if a company has more money than it can spend in a country that it must not have any ideas. That's a pretty troolish thing to say but I'll give you the benefit of the doubt by saying you're just ignorant and myopic, despite your handle.

 

Check my posting history; I have repeatedly stated I want to jump back into the iPhone realm.  But won't until they make a bigger screen.  My post was not a troll post but exactly my opinion.  If I jumped to the wrong conclusion then post your thoughts rather than just insulting me.

post #16 of 54
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Originally Posted by Slurpy View Post

 

What an incredibly astute, insightful, and rational observation. 

 

If your future posts are at this same level of shit, we're in for a mind-numbingly trollish ride. If the mods here had any sanity, your username, as evidence of your intent to shamelessly troll, would be enough reason to ban you. 

 

Check my posting history; I am not a troll.  Again post your thoughts on why you feel I am wrong rather than insults.  Contribute constructively as I have please.

post #17 of 54
Theoretically you are right a $60Bn share buy back would increase the value of each floating share since the market cap should stay constant only with now less shares in the market.

But that's only the theory. The $60Bn share buy back plan does not mean that "we will increase the value of your share by 60$ and then we stop buying back".

There are many other parmeters that determine the value of a stock price like future earnings and growth opportunities. Since AAPL had high exponential growth over a far longer period than any other company it stock kind of priced in that perpetual high growth.

The stock buyback plan and dividend increase now on the other hand kind of means that "hey we don't have any ideas how to develop great new products so we just hand you out our extra cash and a percentage of our earnings since we won't need it anymore". This more or less means that this exponential growth is over which on the other hand means that this needs to be priced in by the market, i.e. huge drop in the stock price we saw in the last months.

So the theoretical share gain from a buy back in destroyed by repricing in the future growth of AAPL.

Additionally you have that the $150Bn has in cash are also priced into the market cap (AAPL market cap = "market cap of Apple as company alone " "$150Bn cash") . This cash will leave the company and therefore the cash pile will decrease which will decrease the "priced in cash" of it's stock.

Now about the bond offering. As stated in the article that cash is oversea and could only be given back to investors if it is repatriated. But repatriating that cash would mean paying taxes to the US treasury. Since AAPL does not want that it issues debt and hopes in the mean time to find a solution for the cash, for exemple lobby for lower taxes and repatriate it cheaper later.


In my opinion AAPL's cash management is disastrous. Stock buy back and dividends is the worst kind of capital allocation you can do. Apple could have done so much with it. Acquire whole companies (Twitter, Facebook, AT&T even something crazy like Volkswagen or Boeing!) or even create a powerful bank with a mouse click! But instead it now even makes a pact with the devil and issues bonds via Goldman Sachs... Great job!
post #18 of 54
Quote:
Originally Posted by Ex iPhone Owner View Post

Check my posting history; I have repeatedly stated I want to jump back into the iPhone realm.  But won't until they make a bigger screen.  My post was not a troll post but exactly my opinion.  If I jumped to the wrong conclusion then post your thoughts rather than just insulting me.

I did post my thoughts. I felt your comments were shortsighted and ignorant to assume that any company, not just Apple, has zero ideas because they make more money than they can spend. I really don't know how I can be anymore clear.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #19 of 54
Quote:
Originally Posted by SolipsismX View Post


I did post my thoughts. I felt your comments were shortsighted and ignorant to assume that any company, not just Apple, has zero ideas because they make more money than they can spend. I really don't know how I can be anymore clear.

 

Then I hope you insult the other posters as you did me that are also posting the same message as I.

post #20 of 54
Quote:
Originally Posted by Ex iPhone Owner View Post

Then I hope you insult the other posters as you did me that are also posting the same message as I.

What other posters stated that making more money than you can spend means you have no ideas to foster?

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #21 of 54
Quote:
Originally Posted by SolipsismX View Post


What other posters stated that making more money than you can spend means you have no ideas to foster?

Check Gordon90s post.  You obviously fail at reading comprehension...

 

The stock buyback plan and dividend increase now on the other hand kind of means that "hey we don't have any ideas how to develop great new products so we just hand you out our extra cash and a percentage of our earnings since we won't need it anymore". This more or less means that this exponential growth is over which on the other hand means that this needs to be priced in by the market, i.e. huge drop in the stock price we saw in the last months.

post #22 of 54
Quote:
Originally Posted by Gordon90s View Post

There are many other parmeters that determine the value of a stock price like future earnings and growth opportunities. Since AAPL had high exponential growth over a far longer period than any other company it stock kind of priced in that perpetual high growth.

The stock buyback plan and dividend increase now on the other hand kind of means that "hey we don't have any ideas how to develop great new products so we just hand you out our extra cash and a percentage of our earnings since we won't need it anymore". This more or less means that this exponential growth is over which on the other hand means that this needs to be priced in by the market, i.e. huge drop in the stock price we saw in the last months.

So the theoretical share gain from a buy back in destroyed by repricing in the future growth of AAPL.
 

The first part of this is correct and insightful.  That is, the reason Apple's price has fallen over the past year is because investors have realized that Apple's profits can't keep growing as they have.  There was a bit of an AAPL bubble as investors (apparently) assumed that Apple would keep growing at an increasing rate.

 

Having said that, everyone has already accepted the reality of a super successful Apple, making billions in profits (just not having those profits grow exponentially).  That company is worth (apparently) $400+/share rather than $700+/share.  Apple acknowleging that having $100 billion in the bank is sufficient and basically paying the rest to investors won't and hasn't affected investor sentiment--except in a good way.  Look at the share price since this plan was announced.  Up 10% in a week.  That's hardly a catastrophe.

post #23 of 54
Quote:
Originally Posted by Ex iPhone Owner View Post

Check Gordon90s post.  You obviously fail at reading comprehension...

The stock buyback plan and dividend increase now on the other hand kind of means that "hey we don't have any ideas how to develop great new products so we just hand you out our extra cash and a percentage of our earnings since we won't need it anymore". This more or less means that this exponential growth is over which on the other hand means that this needs to be priced in by the market, i.e. huge drop in the stock price we saw in the last months.

Again you're making false claims. You're both being irrational to claim that making more money than you can spend in a given time frame means you have no ideas. If what you say is true then there will no new products to come this year, next year and so on as that would be a results of a new idea. In fact, this article is proof that Apple has new ideas the bond is very new to Apple as they haven't done it since before Steve returned to Apple.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #24 of 54
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Originally Posted by malax View Post

The first part of this is correct and insightful.  That is, the reason Apple's price has fallen over the past year is because investors have realized that Apple's profits can't keep growing as they have.  There was a bit of an AAPL bubble as investors (apparently) assumed that Apple would keep growing at an increasing rate.

I wouldn't presume investors to be rational. Apple's P/E is low, and was even at the peak. In comparison, Amazon almost doesn't make money and the lemmings still own their stock at unrealistic prices.
post #25 of 54
Quote:
Originally Posted by e1618978 View Post

3. Your math is correct, except that when you do a stock buyback you reduce the pool of shares that get frequently traded. Apple is buying back a huge chunk (hopefully almost half) of the 300 million share pool, which will dry up available shares on the market and have more than the effect you would expect.
 

 

Becoming a supply and demand issue, thus raising the share price. The savings on dividends must be huge also. 

post #26 of 54
Quote:
Originally Posted by studiomusic View Post

So why can't Apple buy it's shares back in foreign markets?

That Russian guy just bought $100 million... did he have to pay US tax on that money to get AAPL shares?

 

I am wondering the same thing

post #27 of 54

Wow, if I ever have stock questions, I'm coming here. We have some really smart investors on this site! 

 

Thanks to all who have given such great answers!! 

post #28 of 54
Quote:
Originally Posted by studiomusic View Post

So why can't Apple buy it's shares back in foreign markets?
That Russian guy just bought $100 million... did he have to pay US tax on that money to get AAPL shares?

Quote:
Originally Posted by Richard Getz View Post

I am wondering the same thing

Take this with a grain of salt, but if I am remembering correctly if they buy them in a foreign market with the intention of retiring the stock they are still not moving those funds to the US without the tax penalty.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #29 of 54
Originally Posted by Ex iPhone Owner View Post
The stock buyback plan and dividend increase now on the other hand kind of means that "hey we don't have any ideas how to develop great new products so we just hand you out our extra cash and a percentage of our earnings since we won't need it anymore". 

 


A blind person would believe that, yeah. Are you a blind person?

Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
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Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
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post #30 of 54
Quote:
Originally Posted by malax View Post

The first part of this is correct and insightful.  That is, the reason Apple's price has fallen over the past year is because investors have realized that Apple's profits can't keep growing as they have.  There was a bit of an AAPL bubble as investors (apparently) assumed that Apple would keep growing at an increasing rate.

 

Having said that, everyone has already accepted the reality of a super successful Apple, making billions in profits (just not having those profits grow exponentially).  That company is worth (apparently) $400+/share rather than $700+/share.  Apple acknowleging that having $100 billion in the bank is sufficient and basically paying the rest to investors won't and hasn't affected investor sentiment--except in a good way.  Look at the share price since this plan was announced.  Up 10% in a week.  That's hardly a catastrophe.

 

I'm talking long term. That Apple would buy back shares and issue dividends in the first place was announced in march of 2012. The stock peaked a few short months after that. You can also find studies that show that high growth is in most cases over once companies start paying out dividends.

 

But I mean most compagnies are cutting back on CapEx (capital expenditures) and boosting dividends... Time will tell if that's a good idea! (In my opinion not!)

 

 

 

Quote:
Originally Posted by SolipsismX View Post


Again you're making false claims. You're both being irrational to claim that making more money than you can spend in a given time frame means you have no ideas. If what you say is true then there will no new products to come this year, next year and so on as that would be a results of a new idea. In fact, this article is proof that Apple has new ideas the bond is very new to Apple as they haven't done it since before Steve returned to Apple.

 

 

Well let's put it that way, what great ideas had Apple in the last year or so? bigger screen for the iphone, smaller iPad display, a retina display for the iPad and the MacBook (Im' not saying that I don't love the display of my iPad and of Retina Macbook). I agree that these mind blowing ideas did not cost billions to develop.

And that's exactly the problem, these are no really new things... Every 5 year old somewhat-apple-fan could have predicted these changes.

And the worst part is that Apple still refuses to just make one critical change: a 4.7 or 5 inch screen on a phone. To put it in Tim Cook's words: "Apple won't launch bigger iPhone until trade-offs can be avoided".

Which trade-offs? In the mean time they have lost me (and I believe many others) as a phone customer (which just happens to be their most profitable business...). I hope it won't be in there other segments too... (I'm currently a S3 owner and preordered the S4; trust me everyone loving jailbreak tweets would fall from sky by all the possibilities you get now using default android settings!)

 

 

 

Quote:
Originally Posted by JeffDM View Post


I wouldn't presume investors to be rational. Apple's P/E is low, and was even at the peak. In comparison, Amazon almost doesn't make money and the lemmings still own their stock at unrealistic prices.

 

 

 

Well Apple's P/E is a very complicated one. Take into account that at least until the iPhone 6 / 5S comes out Apple has definitely lost the edge in their phone business. Losing the edge on a product that has on average 70% margin and your discounted future earnings take a hit big time. I wouldn't be so sure about Apple's future edge in other segments too. Those Google Chrome book look very innovating too for exemple. 

If that's the case you can kiss your 40% net margin good bye. Landing at for exemple 20% margin with same sales volume cuts your earnings in half in no time! (And that's not to unrealistic, expect the iphone all Apple products have margins of about 25%.)

post #31 of 54
Quote:
Originally Posted by Ex iPhone Owner View Post

 

Check my posting history; I have repeatedly stated I want to jump back into the iPhone realm.  But won't until they make a bigger screen.  My post was not a troll post but exactly my opinion.  If I jumped to the wrong conclusion then post your thoughts rather than just insulting me.

How about an LTE iPad mini then? Bigger screen and no expensive voice contract.

post #32 of 54
Quote:
Originally Posted by studiomusic View Post

So why can't Apple buy it's shares back in foreign markets?

That Russian guy just bought $100 million... did he have to pay US tax on that money to get AAPL shares?

Theoretically, Apple could, since it would probably be no different from using the foreign cash to buy a non-US company (as Microsoft did with Skype). But they would have to keep the shares abroad for subsequent spending (or re-issue against employee stock options) abroad. If they used it for something back home, it might incur a tax bill.

 

My guess is that there is not a lot of AAPL that trades abroad. I think almost all of it trades on US exchanges. The Russian guy probably bought it on a US stock exchange (anyone can do that, as long that person's home country allows it).

 

Add: Looks like AAPL is only traded on NASDAQ.


Edited by anantksundaram - 4/30/13 at 10:52am
post #33 of 54
Quote:
Originally Posted by realpaulfreeman View Post

I'm wondering... why has no one more knowledgable about finance explained what the impact of a $60Bn share buy back is?
 

Perhaps the way it works is that Apple borrows money to buy back stock and increase dividends because they can't bring their dollars back to the States without paying US income tax on it. That way they write off the interest on the loan to save on taxes while not touching their own cash.

 

Share buy back usually increases share price because it indicates that the management views the stock as undervalued based on what they know about the company's plans. It is sort of like legal insider trading.


Edited by mstone - 4/30/13 at 11:11am

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post #34 of 54
Quote:
Originally Posted by studiomusic View Post

So why can't Apple buy it's shares back in foreign markets?

That Russian guy just bought $100 million... did he have to pay US tax on that money to get AAPL shares?


Great question!

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Please update the AppleInsider app to function in landscape mode.

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post #35 of 54
Quote:
Originally Posted by jd_in_sb View Post

Quote:
Originally Posted by studiomusic View Post

So why can't Apple buy it's shares back in foreign markets?

That Russian guy just bought $100 million... did he have to pay US tax on that money to get AAPL shares?


Great question!

See #33 above.

post #36 of 54
Quote:
Originally Posted by Tallest Skil View Post

 


A blind person would believe that, yeah. Are you a blind person?


Why do you have such a negative attitude towards people unfortunate enough to be blind?

post #37 of 54

Looks like the bond issue is going to be massively oversubscribed (3x), and Apple will get a great coupon rate (some predicting even better than AAA corporate rates): http://on.wsj.com/ZUfi9Z

post #38 of 54
Originally Posted by cnocbui View Post
Why do you have such a negative attitude towards people unfortunate enough to be blind?

 

Do you have an actual response, or are you honestly of the belief that I meant blind in the sense of vision. 1oyvey.gif

Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
Reply

Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
Reply
post #39 of 54
Quote:
Originally Posted by Tallest Skil View Post

Originally Posted by cnocbui View Post
Why do you have such a negative attitude towards people unfortunate enough to be blind?

 

Do you have an actual response, or are you honestly of the belief that I meant blind in the sense of vision. 1oyvey.gif

Sometimes, it is better to recognize that one was sounding offensive (even if inadvertently), apologize, and move on. 

post #40 of 54
Quote:
Originally Posted by Gordon90s View Post

Additionally you have that the $150Bn has in cash are also priced into the market cap (AAPL market cap = "market cap of Apple as company alone " "$150Bn cash") . This cash will leave the company and therefore the cash pile will decrease which will decrease the "priced in cash" of it's stock.

That's a good point and I left it out of my earlier discussion. The current market cap is $400 B. $60 B is 15% of the market cap and they will remove 15% of the shares from circulation. IF the market were valuing Apple on the basis of assets, then there wouldn't be much of a gain. However, the market does not seem to be valuing Apple's assets that much. A $50 B increase in cash over the past year did not increase the share price by $50 B. AAPL seems to be valued emotionally rather than rationally - and is more likely to be dependent on P/E (where the buybacks WILL help) than asset value.

Quote:
Originally Posted by Ex iPhone Owner View Post

d you out our extra cash and a percentage of our earnings since we won't need it anymore". This more or less means that this exponential growth is over which on the other hand means that this needs to be priced in by the market, i.e. huge drop in the stock price we saw in the last months.

That is, of course, absurd. That implies that Apple's development efforts are limited by resources. In reality, they have the resources to do everything they want to do - and still have money left over.

Maybe your problem is not understanding the idea of focus. From the time Jobs came back, Apple was very good about focusing on things that they did well and not getting into areas where they couldn't excel. They have intentionally limited their efforts to a smaller number of projects where they can change the world rather than a thousand so-so projects. If they see a project that they want to do, money is not a problem.
Quote:
Originally Posted by SolipsismX View Post


Take this with a grain of salt, but if I am remembering correctly if they buy them in a foreign market with the intention of retiring the stock they are still not moving those funds to the US without the tax penalty.

I wondered that, but came to the conclusion that if it was possible, no one would be talking about repatriating the money to buy back shares. Surely their financial people would have looked at that if it was possible. I don't know if it's because the shares are not available overseas or if there's some unexpected tax consequence that makes it impossible, but I assume there's a reason.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
Reply
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