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Apple spent $16 billion last quarter to repurchase 36 million shares - Page 2

post #41 of 62
Quote:
Originally Posted by ksec View Post

How does one take itself private though? Would Apple goes to the bank and take on hundreds of Billion of debt, then knocking on most of those >5% institution. And buy the rest from Open Market?

Assuming that is even possible ( Apart from government i dont know if Banks even have have that many billions to lend out ) , Who would be the actual owner of Apple then?

A typical 'going private transaction' is financed today with about 60% - 70% debt. The rest is financed by 'private' equity, a combination of private equity (PE) sponsors of the deal such as, say, a KKR or a Blackstone (20% - 30%), and Apple's senior management (0% - 10%).

 

Let's say 65%/25%/10%. Given Apple's market cap and a typical premium that would need to be paid -- the average is probably  around 35% in going private transactions -- we're talking about a $540B transaction, i.e., $350B in debt, $135B in PE equity, and $55B in management equity.

 

Impossible. (To put this into perspective, the cumulative total value of going private deals globally in the past twenty years is probably no more than ~$3 trillion, i.e., less than 6x the size of a deal that Apple's would be).

post #42 of 62
Quote:
Originally Posted by anantksundaram View Post

(i.e., targeted repurchases, like Yahoo did with Loeb a couple of days ago)

It seems Loeb orchestrated the change of management at Yahoo with ~5% shareholding:

http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/10195624/Daniel-Loeb-makes-520m-profit-from-sale-of-Yahoo-shares-as-he-quits-board.html

His company was the largest Yahoo shareholder but still a minority shareholder and just got some Wall Street goons to side with him to change out the management:

"Carol Bartz was fired from the post in September 2011. Instead of going quietly, she memorably told staff she had been “f--- over” by a board of “doofuses” running scared from Wall Street”."

Loeb was also part of the stock dump that affected Apple:

http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/electronics/9873802/Apple-bruised-as-Dan-Loeb-dumps-375m-stake.html

It's a shame that companies are put under pressure from investors looking for their inflation-beating returns. On some level if it brings the company to higher profitability then it's a good thing but the pursuit of money can be at the expense less profitable but more valuable ventures. I was just reading about Eric Veach who came up with algorithms to improve rendering used in movie visual effects, he got hired by Google and was behind their Adsense/Adwords and made millions from that:

http://www.fxguide.com/featured/the-state-of-rendering/

"The concept of MIS is not new. Eric Veach first discussed it in his Ph.D. dissertation, Stanford University, December 1997. This was followed by a key SIGGRAPH presentation the next year. So key is this work that Arnold founder Marcos Fajardo says he re-reads it every year or two, “…and ever since he published it, every single researcher has been reading that thesis – which is amazing by the way,” points out Fajardo. Veach’s understand of rendering is so deep and what is all the more remarkable is its 1997 publication date (as an aside, Veach went on to Google to develop algorithms for Adsense and made millions of dollars according to Fajardo who could not be more happy to see Veach rewarded)."

It's good that he got rewarded for his talent but from the pursuit of shoving ads in everyone's faces instead of his contribution to the arts. Somewhere along the line we've lost track of what's important.
Quote:
Originally Posted by Tallest Skil 
They're taking themselves private!

The people at Apple aren't interested in increased shareholdings by employees:

http://online.wsj.com/article/SB10001424127887323978104578332501982227128.html

The proposal was voted against:

"The proposal, brought by small individual shareholder and corporate-governance advocate James McRitchie, asked Apple to "adopt a policy requiring that senior executives retain a significant percentage of shares acquired through equity-pay programs until reaching normal retirement age." The proposal recommended a share-retention percentage requirement of 33% of shares acquired through equity grants.

In its Jan. 7 proxy statement, Apple's directors urged shareholders to vote against the measure on the ground it "could undermine the company's ability to attract and retain executives." The statement also said the company believed the measure would provide "no benefit to the company" and noted that Mr. Cook and board members already have stock-holding requirements.

The proposal failed to pass, garnering only 29.7% of the votes tallied before Wednesday's shareholder meeting."

Apple could only go private with outsiders buying shares from existing shareholders - in the case of Dell, Michael Dell himself, Microsoft and other investors. Apple's value is based on profitability plus cash assets. 51% of the shares would have to be worth less than their cash to keep control away from outside influences and they'd still have to give them to people. If they distributed $200b between 50,000 employees, there could be a few early retirements depending on the terms.

I think Apple is pretty safe from something happening like what happened with Yahoo. People can see record quarters under Tim's leadership and there are few people who could be trusted to do as good a job. They have more money than they know what to do with so doing the buyback while the stock is lower is a good use of it, I don't think it's indicative of any major strategy.
post #43 of 62
Quote:
Originally Posted by anantksundaram View Post

Impossible. (To put this into perspective, the cumulative total value of going private deals globally in the past twenty years is probably no more than ~$3 trillion, i.e., less than 6x the size of a deal that Apple's would be).

Very interesting to know. Thx.

 

Is that a source you can suggest where I can learn more about this?

post #44 of 62
Quote:
Originally Posted by herbapou View Post

 

 

I dont buy that.  But I can see how this is interesting on a "conspiracy theory" level.

I think those guys are kidding.

post #45 of 62

Also, it's not technically possible for a company to literally take itself private.  Apple could not own itself.  Senior management or "the employees" or some other group (or person) has to buy up the final shares. 

post #46 of 62
Quote:
Originally Posted by ankleskater View Post

Quote:
Originally Posted by anantksundaram View Post

Impossible. (To put this into perspective, the cumulative total value of going private deals globally in the past twenty years is probably no more than ~$3 trillion, i.e., less than 6x the size of a deal that Apple's would be).

Very interesting to know. Thx.

 

Is that a source you can suggest where I can learn more about this?

Unfortunately, a lot of the data is proprietary, and.... as you might guess, private. So it has to be built up from databases such as the "Thomson-Reuters SDC/M&A database" (http://thomsonreuters.com/sdc-platinum/) or "The Deal" (www.thedeal.com). University and (some) public libraries have it.

 

However, there are occasionally excellent 'industry analysis and overview' reports put out by investment banks and consulting firms.

 

Here's a very good one from Bain & Co: http://www.bain.com/bainweb/publications/global_private_equity_report.asp

post #47 of 62
Quote:
Originally Posted by malax View Post

Also, it's not technically possible for a company to literally take itself private.  Apple could not own itself.  Senior management or "the employees" or some other group (or person) has to buy up the final shares. 

It is technically possible like you said but would be extremely difficult and unlikely for a company the size of Apple. Michael Dell managed to do that with Dell but that is a far, far smaller company. 

 

I don't know about the rest of you AAPL owners but I have spent enough time in the basement in the $400's purgatory and am ready to enjoy the penthouse suite again. A meteoric rise that happened like last time when it shot up to over $700 hopefully will not be repeated but a nice steady rise to above $600 by this time next year would be nice. 

 

Never argue with an idiot. They will only bring you down to their level and beat you with experience. 

Reply

 

Never argue with an idiot. They will only bring you down to their level and beat you with experience. 

Reply
post #48 of 62
Quote:
Originally Posted by anantksundaram View Post

Unfortunately, a lot of the data is proprietary, and.... as you might guess, private. So it has to be built up from databases such as the "Thomson-Reuters SDC/M&A database" (http://thomsonreuters.com/sdc-platinum/) or "The Deal" (www.thedeal.com). University and (some) public libraries have it.

 

However, there are occasionally excellent 'industry analysis and overview' reports put out by investment banks and consulting firms.

 

Here's a very good one from Bain & Co: http://www.bain.com/bainweb/publications/global_private_equity_report.asp

Cool. Thx.

post #49 of 62
Quote:
Originally Posted by anantksundaram View Post

A typical 'going private transaction' is financed today with about 60% - 70% debt. The rest is financed by 'private' equity, a combination of private equity (PE) sponsors of the deal such as, say, a KKR or a Blackstone (20% - 30%), and Apple's senior management (0% - 10%).

Let's say 65%/25%/10%. Given Apple's market cap and a typical premium that would need to be paid -- the average is probably  around 35% in going private transactions -- we're talking about a $540B transaction, i.e., $350B in debt, $135B in PE equity, and $55B in management equity.

Impossible. (To put this into perspective, the cumulative total value of going private deals globally in the past twenty years is probably no more than ~$3 trillion, i.e., less than 6x the size of a deal that Apple's would be).

There's a better comparison than looking at 20 years of history. The LARGEST year for private equity deals in the past 20 was $696 globally. The last 4 years where data was available were all under $200 B per year. Clearly, a $540 B deal would be impractical, if not totally impossible (and I suspect that it would take more than $540 B to buy Apple, anyway. I really doubt that the board would approve a sale at that level).
http://www.bain.com/bainweb/pdfs/Bain_and_Company_Global_Private_Equity_Report_2012.pdf
"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
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post #50 of 62

Seems like without the buyback, AAPL would be in the 300's range for the past quarter?

post #51 of 62
Quote:
Originally Posted by ipen View Post

Seems like without the buyback, AAPL would be in the 300's range for the past quarter?

Not even close. The buyback at most could have effected around $5 to $10 a share and even then that is very temporary. Apple is trading unreasonably low  due to a lot of stupidity and manipulation by large hedge funds that want a great bargain to get it as low as possible then start loving the stock again and watch their profits soar. Apple should easily be trading at $550 or higher today if you simply look at fundamentals. 

 

Never argue with an idiot. They will only bring you down to their level and beat you with experience. 

Reply

 

Never argue with an idiot. They will only bring you down to their level and beat you with experience. 

Reply
post #52 of 62
S | A | C is finally being gutted, brick by brick for insider trader, money laundering and more.

It's a good day.
post #53 of 62
Quote:
Originally Posted by gwmac View Post

It is technically possible like you said but would be extremely difficult and unlikely for a company the size of Apple. Michael Dell managed to do that with Dell but that is a far, far smaller company. 

I don't know about the rest of you AAPL owners but I have spent enough time in the basement in the $400's purgatory and am ready to enjoy the penthouse suite again. A meteoric rise that happened like last time when it shot up to over $700 hopefully will not be repeated but a nice steady rise to above $600 by this time next year would be nice. 

I'm hanging in there ... 1smile.gif
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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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 #54 of 62
Quote:
Originally Posted by mdriftmeyer View Post

S | A | C is finally being gutted, brick by brick for insider trader, money laundering and more.

It's a good day.

Yep I totally agree. Now that is a trial they should turn into a media circus. For some reason the old 1960's Frankenstein movies come to mind. People outside with pitch forks at the ready ....
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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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 #55 of 62
Quote:
Originally Posted by gwmac View Post

Not even close. The buyback at most could have effected around $5 to $10 a share and even then that is very temporary. Apple is trading unreasonably low  due to a lot of stupidity and manipulation by large hedge funds that want a great bargain to get it as low as possible then start loving the stock again and watch their profits soar. Apple should easily be trading at $550 or higher today if you simply look at fundamentals. 

Well I hope they start the loving before they are all dragged in to court! 1smile.gif
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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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 #56 of 62
Quote:
Originally Posted by MikeJones View Post

Nuh uh! These armchair CEOs that have never run a business, let alone a massively profitable multinational business, in their life are clearly more competent than Tim Cook! If Apple's BoD was smart they'd install Red Oak and matrix07 as the co-CEOs of the company. Apple's stock would then be up to a billion dollars per share in no time! /s

I like Cook but if we couldn't critise CEO's then Elop and Ballmer would have to be acknowledged as geniuses.
I wanted dsadsa bit it was taken.
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I wanted dsadsa bit it was taken.
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post #57 of 62

If there was a game called Ultimate Insider Trading, this would be it.

post #58 of 62
Quote:
Originally Posted by digitalclips View Post


But I like my dividends! 1hmm.gif

So do I. We can only hope it will see significant growth in the coming years. 

But at least Apple are aggressively spending money to increase shareholder value, if only to reduce the amount of stock out there.

 

Apple is a huge cash cow, and the share price poorly reflect this. Perfect time for them to reduce the share count by 15-20%. 

 

Now let´s hope they have some *killer* new products in the pipeline, that will boost EPS and revenue in the years ahead. I´m all for Apple doubling the current dividend payout next year.

post #59 of 62

Just goes to show how powerful dilution is. They bought 36 million shares, but the share count is only down 18 million from the same time last year.  So they've used up 18 billion of the 60 billion available and the share count has barely moved.  I wonder when this gets picked up on.  What a scam.

 

Anyone who doesnt think buybacks are for insiders is a moron.  Very obvious dividends benefit investors far more than buybacks.

post #60 of 62
Quote:
Originally Posted by anantksundaram View Post

Excellent. Hope they maintain the pace.

They must have something big coming before end of year. With over 2 years left to buy back stock, they have aready bought back a third. At this rate they will have completed 70% of the buy back by Sept 30th. Its amazing the stock pros on cnbc are not all over this. instead they are whining about needing a 5 inch screen. It's also amazing nobody cares about the apple's map app anymore. That was front page news a few months ago.
post #61 of 62
Quote:
Originally Posted by tkell31 View Post

Just goes to show how powerful dilution is. They bought 36 million shares, but the share count is only down 18 million from the same time last year.  So they've used up 18 billion of the 60 billion available and the share count has barely moved.  I wonder when this gets picked up on.  What a scam.

 

Anyone who doesnt think buybacks are for insiders is a moron.  Very obvious dividends benefit investors far more than buybacks.

 

Wow. What a sleuth you are. Here's Apple trying to pull a Bernie Madoff like scam on the public and the SEC, and you caught them. No one noticed that they made 18M shares disappear except you. Tim Cook's upside down grin is now seriously drooping. I bet the likes of Copperfield, Penn and Teller run for the hills when they see you in the audience.

post #62 of 62
They spent $16B to buy roughly 36M shares @444. They would have paid dividend @3.05 on 36M $109.8M. In interest it cost them $80M less tax saving @25% means net cost them $60M means they are saving $49.8M on 36M shares so it is good and I hope that they spend all $60B within next few days and get rid off all fund managers.
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