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Briefly: Apple CFO Oppenheimer nets $16.4M in stock selloff

post #1 of 25
Thread Starter 
A filing with the U.S. Securities and Exchange Commission published Friday reveals Apple senior vice president and Chief Financial Officer Peter Oppenheimer sold 37,172 shares of AAPL stock earlier this week at a price of $440.31, netting the executive $16.37 million.

Oppenheimer
Source: SEC


The sale was executed one day following Apple's quarterly earnings call for its third fiscal quarter of 2013 on Tuesday, and was reported pursuant to SEC Rule 10b5-1 regarding insider trading.

According to previous SEC filings, the shares Oppenheimer sold came from a cache of 75,000 restricted stock units that vested in June. At the time, the executive sold off 37,828 shares worth $15,641,878, with Wednesday's transaction depleting the remaining vested stock.

Oppenheimer now holds a total of 4,834 common stock shares, which at today's price of $440.99 are worth $2.13 million, and will see another 75,000 RSUs vest in March 2016 contingent on his continued employment at Apple.
post #2 of 25
Someone's going shopping
post #3 of 25
Quote:
Originally Posted by Everett Ruess View Post

Someone's going shopping


Part of it is probably due to taxes on recently vested shares.

post #4 of 25
Quote:
Originally Posted by Everett Ruess View Post

Someone's going shopping

No, what he's going to do after paying taxes is put all of the money in $10 bills and just throw them around for anyone.    /s

post #5 of 25
Apple executive team dumping shares as fast as they can without being too obvious...
Sell.
post #6 of 25
Give some to me plz
post #7 of 25

He thought he better sell them before they were taken off him when the boss became aware of the news that Samsung now makes more profit selling phones than Apple does.

 

What was that about gross profit being more important than market share?  Now Samsung appear to have have more of both.

 

Quote:

Samsung has become the most profitable mobile phone company in the world, overtaking Apple, a report says.

Samsung's handset division had an estimated operating profit of $5.2bn (£3.4bn) in the second quarter of 2013, according to Strategy Analytics.

Apple's iPhone operating profit was estimated at $4.6bn, with the iPhone range "underperforming".

 

http://www.bbc.co.uk/news/business-23463111

 

Another article I read claims smartphones are now commodities and the boom in growth for smartphones is over, and that lower priced models are where the growth is at, a market sector which Samsung will better be able to profit from than Apple:

 

 

Quote:

The smartphone has crossed the line from shiny new technology to ubiquitous commodity.

App-laden, Web-surfing phones have surged in popularity over the past half-decade and generated $293.9 billion in sales last year alone. They are now used by more than 1 billion people around the world. With more than half of mobile users in the U.S. and developed countries owning a smartphone, and consumers in emerging markets including China and India gravitating toward cheaper models, demand is slowing for high-end devices.

 
The average price of a smartphone has plunged to $375 from $450 since the beginning of 2012, IDC estimates.

 

http://www.bloomberg.com/news/2013-07-21/high-end-smartphone-boom-ending-as-price-drop-hits-apple.html
 

post #8 of 25
post #9 of 25
I've seen this Strategy Analytics release reported all over the place. Can someone explain where they got that $4.6B figure? I don't see any where in Apple's 10Q where they reported profit by segment. As for Samsung, they do break out profit by segment but I would assume their mobile segment is more than just phones and would include tablets as well.
post #10 of 25

Oh noes - Apple is DOOOMEDTM

post #11 of 25
Quote:
Originally Posted by rain View Post

Apple executive team dumping shares as fast as they can without being too obvious...
Sell.

 

 

Unlike the misleading nature of your post,  which is quite obvious`

post #12 of 25
Apple execs have been selling stock at certain junctures for years now, regardless of Apple's performance.

One would assume that at some point they'd like to cash in on their financial opportunities.
post #13 of 25
Quote:
Originally Posted by Quadra 610 View Post

Apple execs have been selling stock at certain junctures for years now, regardless of Apple's performance.

One would assume that at some point they'd like to cash in on their financial opportunities.

That's true, but it is odd that so many of them don't keep significant amounts. Oppenheimer's holdings are infinitesimal given his salary and position. The same is true of Cook. It is really odd that neither of them has any significant holdings and have been selling their stock shortly after it vests.
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Gatorguy 5/31/13
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post #14 of 25
Quote:
Originally Posted by jragosta View Post

That's true, but it is odd that so many of them don't keep significant amounts. Oppenheimer's holdings are infinitesimal given his salary and position. The same is true of Cook. It is really odd that neither of them has any significant holdings and have been selling their stock shortly after it vests.

Imo they dont want to have all there eggs in the same basket. Those shares must be a significant amount of cash and they will get more later on. He did wait after the earnings to sell them.
post #15 of 25
Quote:
Originally Posted by Everett Ruess View Post

Someone's going shopping

It would be interesting to see if they invested the money in stocks elsewhere. Some of them buy expensive property. Jony Ive spent $17m on a property.

They'll keep some in banks for living expenses but the bulk of it will be reinvested into something else.

Selling it doesn't show a lack of faith in the company though, just that there are better investment opportunities elsewhere. A company can do perfectly well financially but not give a good return for investors. Microsoft makes loads of money for example but not a good investment:

http://blogs.wsj.com/moneybeat/2013/07/26/einhorn-turns-on-microsoft-investment/
post #16 of 25
Quote:
Originally Posted by herbapou View Post

Imo they dont want to have all there eggs in the same basket. Those shares must be a significant amount of cash and they will get more later on. He did wait after the earnings to sell them.

I understand not wanting all your eggs in one basket. But an executive for a public company like this is normally expected to have a significant holding in that company's stock.
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post #17 of 25
Quote:
Originally Posted by Marvin View Post


Selling it doesn't show a lack of faith in the company though, just that there are better investment opportunities elsewhere.

 

It is not possible to say whether or not the execs selling their shares shows a lack of faith.  You certainly can't say it shows faith, and you can't rule out that it shows a lack of faith, as their behaviour is exactly what one would expect if there was.

 

If I was an Apple investor, which I was seriously contemplating at one point, I would be concerned about your second point, that there are better investment opportunities elsewhere.  If there were big things in the pipeline like the next iPad or Apple panel TV that has been posited, then I doubt they would be quit so keen to divest themselves of shares, as the introduction of revolutionary new products would almost certainly see the stock take off again.

post #18 of 25

Why would Apple be buying back shares like crazy if they didn't believe AAPL would go higher?

post #19 of 25

 

It is normal for executives to sell the stock after it is vested. It is misleading to say that samsung had more profits than Apple. Samsung's Net Profit for June Quarter was 6.6 Billion dollars & Apple posted quarterly net profit of $6.9 billion. Previous Quarter Samsung had released one of their latest smartphones while Apple iPhones were 9 months old.  Both Apple and Samsung do not give any net profit details regarding smartphones exclusively, so it is misleading to speak net profit in a specific category.

Samsung makes 1000 different products other than smartphones & feature phones. It is ridiculous to say most of their profits is from a slow moving high end smartphone.

 

Apple is presently not competing with samsung in mid range and low range smartphones. Samsung's net profit for all products that also includes smartphones and tablets for the last 12 months is only 19.77 billion according to yahoo finance. As per reports Samsung profits for smartphone is around 50% of all profits.

Apple Manufactures mainly 2 or 3 products which includes smartphones & tablets. Apple's net profit for all products which also includes smartphones & tablets for the last 12 months is 39.67 Billion according to Yahoo Finance. Apple's profits in smartphone & tablets is 70% of all profits. In final analysis if you just compare net mobile profits for the last 12 months for both samsung & apple, you will notice that APPLE has 66% of net profits in the smartphone segment.

 

Strategic Analytics, IDC, Gartner should find the market share in different price ranges.  The average price for samsung was around $250 and Apple's average price is around $581.  We all know that you sell more smartphones in the lower price range which samsung and other android smartphone sellers specialize.  Apple sells at $500 +range only.  You can sell few BMW's compared to a toyota corolla, nissan maxima or Honda Civic.  Does that mean BMW is losing marketing share.  You cannot compare Apple's and Oranges.  All these expert research firm should find marketshare in different price segment. 

Samsung has long put out a new phone every two weeks. They like to just throw it out there and see what sells. This is not innovation but carpet bombing. It says Samsung has no clue  evidenced by the trial which showed the manufacturing arm giving specifications to the design arm on how to design a phone by dissecting the Apple one they built.

As for tablets, every survey I have seen shows Apple owns 90% of the tablet market by web browsing metrics. So while Samsung may be shipping tablets I wonder who is buying it or what they use it for.

This should all be taken in context of recent reports that Samsung can’t move their phones.

And by the way Samsung devices have always been cheap. They are not known for longevity.

 

If you ever wonder why the iPhone has consistently had higher quality and customer satisfaction ratings than any other phone, and why iPhone owners are much more likely to buy another iPhone in the future than users of other phones would repeat their purchase choices, it’s because Apple’s product development and production has a very different focus than those of competitors.

post #20 of 25
Quote:
Originally Posted by Rogifan View Post

Why would Apple be buying back shares like crazy if they didn't believe AAPL would go higher?


Because they literally have so much money they don't know what else to spend it on.  This way it looks like they are doing something with their money and might appease sharks like that hedge fund head who took a bite out of them just a few months ago.

 

Companies don't buy back their own shares on the expectation they will go higher so they can profit from their latter sale, they are taking them out of play to boost the value of those still available.

post #21 of 25
Quote:
Originally Posted by sammy100 View Post

 

Apple is presently not competing with samsung in mid range and low range smartphones. 

...

Apple sells at $500 +range only.

...

Samsung has long put out a new phone every two weeks. They like to just throw it out there and see what sells. This is not innovation but carpet bombing.

The iP4 sells for $429 in the UK and $450 in the US and it makes up 18% of Apple's phone sales:  http://appleinsider.com/articles/13/07/22/iphone-5-accounts-for-half-of-apples-smartphone-sales-iphone-4s-takes-30

 

Throwing it out there and seeing what sells seems to be working for them though, as their profits show.  You can be as derisive of Samsung's business model as you like, but it is obviously producing very good results and is therefore just as valid as Apple's.

 

Trying things out to see what works is what drives natural selection.  Knock it all you like, but it has stood up to the test of time and is beyond criticism.

post #22 of 25

In the scheme of things, the total amount of shares sold are not that much. But given his position at the company I am very concerned what this news will do to Apple's share price. And why is his total holdings so small? As an Apple executive he should at least have a more substantial amount of his net worth invested in the company.

post #23 of 25
Quote:
Originally Posted by Rogifan 
Why would Apple be buying back shares like crazy if they didn't believe AAPL would go higher?

Buying back shares makes the price go higher if the company value stays the same. If the company is worth $400b and they have 940m shares, then the share price is $426. If the company is still worth $400b and they have 800m shares, the share price is $500.

If they buy shares low, they can buy back more, which further increases the value of what remains but the very act of trading low is going to affect the perception of what the company is worth so it might take a bit of time for it to go up. If they keep their earnings steady, it will eventually go up because their cash pile will grow again.

Apple makes about $40b profit per year. If they do the same thing for 5 years with zero growth, the value of the company will have to go up because they'd have so much cash - you can't value a company lower than its cash value or the combined value of whatever they buy with it. I doubt they'd accrue over $400b in cash without spending any of it but it's possible. They have about $145b just now and made $125b of it in just the last 5 years. A $60b buyback seems like a lot of money but over the 2 years the buyback happens, they'll make another $80b so their cash reserves are still going to be at least as high as they were before the buyback and the share count will be lower.

Investors will always be looking for high growth and be disappointed if Apple only makes another $40b profit but that still makes them the 1st or 2nd most profitable company in the world, which is hardly something to be disappointed by. I imagine Apple will take on growth opportunities where they present themselves but things like TVs have limited market volume so it's not going to grow earnings massively. Samsung is already the market leader and combined with their smartphones, they make less profit than Apple.
post #24 of 25
Quote:
Originally Posted by sammy100 View Post

Strategic Analytics, IDC, Gartner should find the market share in different price ranges.  The average price for samsung was around $250 and Apple's average price is around $581.  

 

That Samsung average of $250 would include non-smartphones.  

 

For smartphones only, their ASP is around $380.  

 

Quote:
We all know that you sell more smartphones in the lower price range which samsung and other android smartphone sellers specialize.  Apple sells at $500 +range only.  You can sell few BMW's compared to a toyota corolla, nissan maxima or Honda Civic. 

 

Automobile analogies don't work with smartphones.

 

For one thing, cars are not subsidized by the gas companies.  iPhones sell best in countries where they are subsidized, or there are other incentives like trade-ins or loans to make the upfront cost more affordable to the masses.

post #25 of 25
Quote:
Originally Posted by Marvin View Post

Apple makes about $40b profit per year. If they do the same thing for 5 years with zero growth, the value of the company will have to go up because they'd have so much cash - you can't value a company lower than its cash value or the combined value of whatever they buy with it. I.

That is absolutely false. There have been a number of times when companies were valued below their cash value.

If a company is losing money, that cash won't last indefinitely.
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Gatorguy 5/31/13
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