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How much $AAPL has Apple eaten with its $44 billion buyback appetite? - Page 2

post #41 of 57
Quote:
Originally Posted by ncee View Post

Wouldn't a stock split be a good thing?

I think it would, but Apple apparently disagrees.

Apple has a very high institutional ownership (something like 70%, IIRC). That leads to much of the volatility in the shares and the overreaction when the FUD starts flying. If the shares were $50 instead of $500, it would be easier for individuals to buy the stock and I think it would go a long way to address the share price problems.
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Gatorguy 5/31/13
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post #42 of 57

Kind sir ,   your lack of insight (or self control) is considerably more off-putting than my corrected post.  

post #43 of 57

 

Quote:
Originally Posted by pedromartins View Post
 

 

Do they need to buy the whole company or just half of it?

 

You mean gain control of 51% of shares for the purpose of voting those shares? They would still need to buy the remaining shares to take control of the company, and they would have to gain something like >90% to force the remaining shareholders to sell. This silliness has come up ever since Dell mentioned it. 

 

Quote:
Originally Posted by DogGone View Post

Apple are currently buying back shares and reducing the number of outstanding shares.

For Apple to go private it would have to raise the cash independently to buyback all shares. That includes the shares I have. I can't see how Apple could ever raise $400-500BB to achieve this.

How many times do people need to state that a company cannot buy itself from its owners? It makes my head hurt reading this kind of silliness.

post #44 of 57
Quote:
Originally Posted by Richard Getz View Post
 

Why do you not proof read your posts? :no:

 

I see my error,   the reply button does not capture the post,  one should use the quote tab instead.  

 

Kind sir ,   your lack of insight (or self control) is considerably more off-putting than my corrected post.  

post #45 of 57
Quote:
Originally Posted by theCore View Post
 

 

I see my error,   the reply button does not capture the post,  one should use the quote tab instead.  

 

Kind sir ,   your lack of insight (or self control) is considerably more off-putting than my corrected post.  

 

What in the world are you talking about? 

post #46 of 57
Originally Posted by DESuserIGN View Post

Why do you think that would be good?

 

Off the top of my head, so that idiots can’t destroy company value with worthless, pathetic lies whenever they feel like it.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

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Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

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post #47 of 57
Quote:
Originally Posted by jragosta View Post

I think it would, but Apple apparently disagrees.

Apple has a very high institutional ownership (something like 70%, IIRC). That leads to much of the volatility in the shares and the overreaction when the FUD starts flying. If the shares were $50 instead of $500, it would be easier for individuals to buy the stock and I think it would go a long way to address the share price problems.

You think institutions would not buy even more shares at $50?
post #48 of 57
Quote:
Originally Posted by jungmark View Post

You think institutions would not buy even more shares at $50?

No. Institutions are spending many thousands (or millions) of dollars, so it makes no difference to them whether each share is $50 or $500.

For an individual, it might matter. Maybe they have $400 (or $800) to spend. Maybe they want to buy $100 worth of shares per month to dollar cost average.
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post #49 of 57
Quote:
Originally Posted by Tallest Skil View Post
 

 

Off the top of my head, so that idiots can’t destroy company value with worthless, pathetic lies whenever they feel like it.

 

Although with a cheaper PPS, you will have daytraders and much of the same. The best thing Apple could do is a buyback and therefore make the stock more valuable to a larger audience, thus diluting the influence of the few. Larger audience meaning investment accounts that are not interested in day to day fluctuations. 

post #50 of 57

There is no such "metric" as revenue per share. Yes, of course, you can calculate such a thing, but there is no such "metric" from a Wall Street perspective.

 

There is obviously an earnings per share metric which is affected by the share buyback but this post is weakened by too much cheerleadering I'm afraid.... "if it hasn't already it may have forever missed the opportunity to buy its own shares for so little"... even if true, that reads hyperbolic.

 

"Apple was clearly racing to get its new iPhones done in time to include at least some of their initial revenues within the September quarter. "

 

The company always does this... It wasn't "racing" to do anything.... 

 

You can let the facts tell the story and add analysis -- which you did really well -- without moving into the realm of the slightly absurd. 

post #51 of 57
Quote:
Originally Posted by Evilution View Post

Hmm, maybe Apple are spreading FUD about themselves through paid analysts to drive the price down so they can buy shares back at a lower price before recovering the price and selling them on for a massive profit.

 

Not sure you understand what is going on, shares bought by Apple are terminated/deleted from the exchange.

post #52 of 57
Quote:
Originally Posted by hydr View Post

Not sure you understand what is going on, shares bought by Apple are terminated/deleted from the exchange.

Absolutely false. Termination of shares is a completely separate transaction from buying shares back. In many cases, companies buy shares back to terminate them. In other cases, they buy them back to hold as treasury stock - to give out as incentives. In Apple's case, it has been specifically stated that they will use at least some of the stock they're buying back for employee incentives. That reduces the impact of the buyback - because the shares continue to circulate.

I do not believe that Apple is terminating ANY shares in this transaction. They are buying them back to hold and/or distribute.
Quote:
Originally Posted by markrogo View Post

There is no such "metric" as revenue per share. Yes, of course, you can calculate such a thing, but there is no such "metric" from a Wall Street perspective.

There is obviously an earnings per share metric which is affected by the share buyback but this post is weakened by too much cheerleadering I'm afraid.... "if it hasn't already it may have forever missed the opportunity to buy its own shares for so little"... even if true, that reads hyperbolic.

That's false, too. Many companies use market cap / earnings (i.e. P/E) as a metric, but they also use market cap / revenues as a metric. Market cap is simply price per share times number of outstanding shares (which is normally a constant). For small companies and/or new, growing companies, price / revenues most certainly is an important metric. Heck, that's the major driving force for Amazon's stratospheric price.

Look at the financial summary provided by your stock broker. If they do a thorough job (or use one of the more comprehensive public summaries), it will include metrics like book value per share, earnings per share/, revenues per share, and so on.
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post #53 of 57
Quote:
Originally Posted by jragosta View Post
...
Their current market capitalization is $440 B (or trailing P/E of 12.1). If your numbers are correct (I haven't checked), the cash-adjusted market capitalization is $300 B. That yields a cash-adjusted P/E of just over 8. Consider that the market's average P/E is more than twice that, it's really unfathomable that the P/E is so low. Even if you think Apple is only going to grow as fast as the market average, the share price should be twice what it is.

If you separate the cash from the operations part of the company, the operations part has a P/E of 8 or 9 like you say but the cash part has a P/E of 30 or more (assuming Apple's conservative investments of the cash). That's why it makes sense to get rid of the cash.

post #54 of 57
Quote:
Originally Posted by jonshf View Post

If you separate the cash from the operations part of the company, the operations part has a P/E of 8 or 9 like you say but the cash part has a P/E of 30 or more (assuming Apple's conservative investments of the cash). That's why it makes sense to get rid of the cash.

Reporting a P/E for cash alone makes no sense at all.

There are lots of reasons for holding on to cash, even if it reduces the overall P/E (but not the cash-adjusted P/E):
- Keep it around in case a great acquisition opportunity appears
- Buffer in case there's a disaster that makes them lose money one or more years
- Guaranteed payment option for long term investments (in research, for example)
- New HQ building
and so on

One should generally keep a healthy dose of cash around. The only question is how much is enough. Apple has been conservative, but even with their conservative view, they decided that they had more than enough and started share buybacks and dividends. But you can be sure that it had nothing to do with calculating a P/E ratio on the cash they have in the bank - no one I know would ever measure cash returns that way.
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post #55 of 57
Quote:
Originally Posted by anantksundaram View Post

Not an option. Not in a million years.

 

Not so.

 

And in a much shorter period of time that you may realise.

 

Where EXACTLY may I be getting my information from? ;)

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post #56 of 57
Quote:
Originally Posted by DESuserIGN View Post
 

Why would you? Why do you think that would be good?

 

Because short-term investors, not perceptive enough to even see Apple's current share potential, having the ability to choose the current CEO makes no sense at all.

 

Want Apple to keep innovating?

 

Remove potential stockholder stupidity now.

 

Support Apple going private.

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post #57 of 57
Quote:

Apple is healthy and they are making a ton of money. 

But their $140B cash on the balance sheet is making the stock a major drag. It´s earning less than a 1% and it´s a *huge* part of Apple now. It´s not helping anyone, and it´s hurting Apple share price. That is a fact. However if they took advantage of this, and applied the cash to buy its own shares it would make the share more attractive.

 

And Steve would say: "so what? We're in business to make great products for consumers, and generate profit, NOT in the business of driving up stock prices or being well liked by Wall Street speculators."

 

As a matter of fact, one of the main reasons Apple does sit on a pile of cash is exactly to be independent of Wall Street. If Apple were to dole out the cash to share holders either through dividends or buy backs, Apple could be black-mailed by Wall Street at any point, e.g.: "Want to make a strategic acquisition? Well, unless you do X we'll hike up your bond rates by Y%"

Similarly minor issues with release cycles etc. could make the stock fluctuate even more widely than it does now, causing shareholder revolts, management ousters, etc. and making the company considerably less stable than it is now, and much more likely to have to give up the Apple way of running a business and becoming like the rest, driving by penny pinchers, cost cutters and accountants, rather than by engineers, designers, visionaries.

Apple's "if you build it, they will come" approach is only feasible if you can show to all of Wall Street the middle finger and just do what you want, because you have the cash, and more than enough cash to ride out a recession or two.

When the tech bubble burst, Apple continued investing and researching, while everyone else was cutting budgets. If the tea baggers manage to tank the economy, Apple will cruise on at full speed, with R&D, modernizing infrastructure, etc. They sell less phones and computers, make somewhat less profit, but they will exit the recessions as if it had never happened, while the competition has to re-hire talent they cut lose to cut costs, they will have to resume moth-balled R&D efforts, etc. and will be even more behind than they are now.

 

This is exactly Apple's game: if you have the cash, you rule. If others have the cash, they rule. Wall Street wants the cash, and they want to rule, that's why they keep bitching about not enough dividend, not enough share buyback, etc. because they want Apple lean, themselves cash-rich and in the driver's seat. As things are, Apple is in the driver's seat, and that causes them ulcers.

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