or Connect
AppleInsider › Forums › Investors › AAPL Investors › Preliminary Apple proxy filing details Carl Icahn's $50B stock buyback plan up for shareholder vote
New Posts  All Forums:Forum Nav:

Preliminary Apple proxy filing details Carl Icahn's $50B stock buyback plan up for shareholder vote - Page 2

post #41 of 140
Quote:
Originally Posted by sog35 View Post

Trust the Board?  Same wonderful Board that fired Steve Jobs?

Are you that dense or just spreading Mis-information? Name one current board member that was also on the board 30 years ago.
post #42 of 140
Quote:
Originally Posted by sog35 View Post

Trust the Board?  Same wonderful Board that fired Steve Jobs?

You mean the board that brought Steve back? That board?

Proud AAPL stock owner.

 

GOA

Reply

Proud AAPL stock owner.

 

GOA

Reply
post #43 of 140
Quote:
Originally Posted by sog35 View Post

Everyone here who is against the buyback is saying the same thing:
Icahn is GREEDY so he must be wrong.

Give us GOOD reasons why not to do a buyback when Apple is at historically low valuations (14 PE) and historically low interest rates to float a bond.

Again don't just say Icahn is greedy.  Thats not a good reason.  Show me stats and figures.  Give me reasons.

My reason is that $200,000,000,000 in cash languishing in 1% CD's is losing over $15,000,000,000 in opportunity cost a year (vs 8% rate of return)
My reason is Apple will still have $150B in cash even with the buyback.  Probably closer to $180B if they float a bond.
My reason is net of dividends the interest on the bonds are costing Apple ZERO.
My reason is I believe this stock should be valued at $675-$700.  Why wait till the stock is $700 to buyback?  Current buyback runs all the way to 2015.  The time to buy shares is now when its dirt cheap.
Hmm...Apple is now a dividend paying company. Apple took on debt in order to finance stock buybacks. Basically they've done everything Wall Street wanted and the stock is still way undervalued. You really think more buybacks will matter?
post #44 of 140

Bottom line is this:

 

Icahn is not asking Apple to increase its buyback dramatically.  Apple has already agreed to buyback $60B in shares by the end of 2015.  They already bought about $23B.  Ichan wants Apple to buyback $50B this fiscal year.  PERIOD.  So he's only asking for Apple to accelerate the buyback and add $13B addition.  The total would be $73B (Ichan proposal) vs $60B (Apple).

 

I agree with Ichan that the time to buy is NOW.  Now that the stock is grossly undervalued.  Now when the interest rates are low.  Now when Apple will have over $200B by 12.31.14.

 

All Ichan wants is Apple to accelerate buyback and add $13B more.  Which is basically 90 days of cash flow generated by Apple.

Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
post #45 of 140
I think sog35 is Carl Icahn. Hi Carl.
post #46 of 140
Quote:
Originally Posted by jungmark View Post

I think sog35 is Carl Icahn. Hi Carl.

I think sog35 is Icahn's little vampire daughter.

Proud AAPL stock owner.

 

GOA

Reply

Proud AAPL stock owner.

 

GOA

Reply
post #47 of 140
Quote:
Originally Posted by SpamSandwich View Post

There is no political will in Congress or the White House to get behind a change in tax policy.

I don't think Apple or the other companies holding the remaining trillions or so are in any hurry when they can borrow low domestic and use offshore cash to bolster production capacity. 2014 elections and the lamest part of a lame duck president aren't far off.
post #48 of 140
Quote:
Originally Posted by ChristophB View Post

I don't think Apple or the other companies holding the remaining trillions or so are in any hurry when they can borrow low domestic and use offshore cash to bolster production capacity. 2014 elections and the lamest part of a lame duck president aren't far off.

This president has been lame since day one...but back to the show!

Proud AAPL stock owner.

 

GOA

Reply

Proud AAPL stock owner.

 

GOA

Reply
post #49 of 140
Quote:
Originally Posted by SpamSandwich View Post

This president has been lame since day one...but back to the show!

For the record I was referring to the last two years of the term. If the senate swaps in 2015, it will be interesting times.
post #50 of 140
The most valuable franchise in the NFL is $2.3 BILLION
The average is half
The owner built the stadium in a location without any MASS transportation
He charges$75.00 to park
Can you imagine the current BOD or TIm Cook making that kind of decision?
We miss you Steve Jobs, the last entrepreneur at Apple
Put Jerry Jones on the board
post #51 of 140
Quote:
Originally Posted by Flabingo View Post

The most valuable franchise in the NFL is $2.3 BILLION
The average is half
The owner built the stadium in a location without any MASS transportation
He charges$75.00 to park
Can you imagine the current BOD or TIm Cook making that kind of decision?
We miss you Steve Jobs, the last entrepreneur at Apple
Put Jerry Jones on the board

And he can con the US voters to fund his infrastructure and then put a crap product on the market?
post #52 of 140
As long as the pe remains below 15 it is attractive. I would never want to jiggle the hand on the wheel when so much is going right. Apple shareholders of over 10 years have every reason to expect the price to drop by half on a regular basis. This company innovates. They need the cash to make the way smooth when they are pushing a new product out that literally billions of people will buy. Supply chain control reguires cash and guts. The innovation causes cash flow to fluctuate. Wall street hates this, and they can go piss off. I have never sent in a proxy vote before. I will be voting against this.
post #53 of 140
Quote:
Originally Posted by Macnewsjunkie View Post

As long as the pe remains below 15 it is attractive. I would never want to jiggle the hand on the wheel when so much is going right. Apple shareholders of over 10 years have every reason to expect the price to drop by half on a regular basis. This company innovates. They need the cash to make the way smooth when they are pushing a new product out that literally billions of people will buy. Supply chain control reguires cash and guts. The innovation causes cash flow to fluctuate. Wall street hates this, and they can go piss off. I have never sent in a proxy vote before. I will be voting against this.

"Supply chain control reguires cash and guts."

 

Does it require cash & guts to the tune of $150 billion sitting in the bank? Apple can pay for their capital expenditures with the cash flow they earn every quarter.

post #54 of 140
Quote:
Originally Posted by Flabingo View Post

The most valuable franchise in the NFL is $2.3 BILLION
The average is half
The owner built the stadium in a location without any MASS transportation
He charges$75.00 to park
Can you imagine the current BOD or TIm Cook making that kind of decision?
We miss you Steve Jobs, the last entrepreneur at Apple
Put Jerry Jones on the board

Seriously? The current BoD is overseeing the most valuable company in the world w/o Jerry's help. Jerry plays second fiddle to no one and he can't get out of his own way.
post #55 of 140
Its a great idea but don't think it matters. Im sure they plan on buying back more than 50B regardless. I think he's just trying to hurry it up a bit as anyone can see the stock is undervalued at current levels.
post #56 of 140
Read about the stadium and the other uses including Paul McCathy . Why is the franchise so valuable given the performance of the team?
Can you imagine Apple management thinking outside the box?
Winning football games is apparently not that important to the value of his franchise
post #57 of 140
Quote:
Originally Posted by Flabingo View Post

Read about the stadium and the other uses including Paul McCathy . Why is the franchise so valuable given the performance of the team?
Can you imagine Apple management thinking outside the box?
Winning football games is apparently not that important to the value of his franchise

Good point. He would probably be better suited to be on the board at Amazon.
post #58 of 140
Does it bother anybody that the Chairman of the Board of directors is the CEO of a company that GOOLE recently purchased?
post #59 of 140
When Carl hits his target price he will be gone. Is he any different that any investor?
post #60 of 140
Since when is a stockholder who may own more shares than every officer and director is an outsider?
post #61 of 140
Carl just came in out of nowhere and started dictating business decisions. Id be highly skeptical.
post #62 of 140
Quote:
Originally Posted by Flabingo View Post

Does it bother anybody that the Chairman of the Board of directors is the CEO of a company that GOOLE recently purchased?

GOOLE (sic) recently purchased Genentech?
post #63 of 140
Quote:
Originally Posted by sog35 View Post

Everyone here who is against the buyback is saying the same thing:

Icahn is GREEDY so he must be wrong.

Give us GOOD reasons why not to do a buyback when Apple is at historically low valuations (14 PE) and historically low interest rates to float a bond.

Again don't just say Icahn is greedy.  Thats not a good reason.  Show me stats and figures."

Back out the cash and AAPL trades at a 9.92 multiple, while AMZN trades at 1,429 multiple ($400/0.28 EPS) and is trying a new version of Webvan with visions of drone delivery. Bizzare.

I complain about Cook, but for no good reason other than his "Grandpa" image (recreate cool-kid next gen Justin Long!

Onviously, Cook has to be one of the world's most genius operations guru to ever walk the planet, genuinely loved SJ, got China Mobile signed on AAPL terms I speculate, AND in time for 5s AND 5c AND iPad Air & Mini, Mac Pro and the list goes on! Yet AAPL is not considered a growth company as they've just been handed the keys to China? That's absurd...the fact AAPL was even down $8/share this week is pure hedge fund manipulation. Instead of buying shares those guys just sell calls and quit buying...many no different than Einhorn or Ichan. They are all in it together, thus Job's intense disdain for Wall Street. Can't live with'em, can't live without'em

The current stock buyback program + dividend program is biggest in history, complete it in Q1, then split the stock 20-1 and hopefully give actual AAPL enthusiasts a chance at owning more stock.

Who knows, but at the moment the reason(s) AAPL is not trading at a fairly conservative 20X PE is ludicrous to me and would make the price of AAPL $792 right now. Their margins should be fine, and AAPL will thrive in China, 5c included...supplying 500M iPhones alone will be the challenge.

At least Ichan and Einhorn are good for puttin pressure on manage because 1% on $150B nearly dormant cash is as stupid as their current stock price.

C'mon Cook, you've showed us your operational brilliance, now how about "one more thing" or one thing we didn't expect?
post #64 of 140
Changing the subject, do not forget to watch the Kennedy Center Awards on Sunday night. It is only broadcast once, and if you miss it there are no DVDs
post #65 of 140
Why if Warren buffet announced that he bought an equal amount of Apple stock on Monday as Carl. What would the price be on Tuesday?
post #66 of 140

@sog35 I agree with sog35 - his reasoning is logical and sound, and I'll be voting to support increasing the buyback.  I don't have all that many shares, though, but I agree that it creates value, especially with interest rates below the dividend yield.  Just:

1) borrow the money

2) buyback and retire the shares

3) don't pay dividends on the retired shares

4) use the saved dividend money to pay the interest on the bond.  And step 5) will be instant profit.  (The instant profit will be the difference between the bond yield and the dividend yield)

Pro tip: don't forget to take the interest paid tax deductions for extra profit :)

 

It's non-binding, so don't expect too much out of it either if it passes or fails.  I think whichever happens, Apple wouldn't do exactly what the resolution says, but that's no big deal.  The original plan was to change nothing anyway. But I do think that a bigger step towards that direction will actually create wealth for all shareholders, both short term and long term.  Buybacks lowers PE (a good thing) and gets rid of excess cash (that otherwise cannot be reinvested in the core business or something equivalent performing like what Warren Buffett does)

Or Apple could just buy more patent portfolios and lay the smack down on Google I guess.

post #67 of 140
Quote:
Originally Posted by sog35 View Post

 

Trust the Board?  Same wonderful Board that fired Steve Jobs?

 

Please stop spreading BS!

First of all, it is NOT the same Board that fired Steve. It is the Board that Steve hired!
Second of all, Icahn, is it you?
Third, yes I trust the board and the executive team that led Apple to where it is now. The most valuable company on earth.
post #68 of 140
All this talk about money is precisely what types like Carl would like to see.
Apple has the capabilities to do something exceptional and interesting and maybe even contribute to a better world.
What would happen for example if Apple remade the electric car and used its attention for detail, it's exceptional design and superior software to make revolutionair new hardware that's affordable for almost anyone?
That would be something, phones and computers are one thing but real hardware like cars, planes (maybe space planes) are something else.
Money is boring, achieving something exceptional is the real aim.
post #69 of 140

I think Icahn is a finance guy and sees Apple strictly as a corporation - an instrument for giving investors as good a return as possible on their investment. In that narrow sense he may be right about what to do with the money. But the people who work there (including the CEO) see it more as an instrument of positive change in the world (primarily technological but social too), in which case a big pile of money can come in very handy.

post #70 of 140
Quote:
Originally Posted by Cpsro View Post
 

(Photo taken in the weeks before Carl Icahn's bar mitzvah.)

 

So that guy is indeed jewish?

iMac Intel 27" Core i7 3.4, 16GB RAM, 120GB SSD + 1TB HD + 4TB RAID 1+0, Nuforce Icon HDP, OS X 10.10.1; iPad Air 64GB; iPhone 5 32GB; iPod Classic; iPod Nano 4G; Apple TV 2.

Reply

iMac Intel 27" Core i7 3.4, 16GB RAM, 120GB SSD + 1TB HD + 4TB RAID 1+0, Nuforce Icon HDP, OS X 10.10.1; iPad Air 64GB; iPhone 5 32GB; iPod Classic; iPod Nano 4G; Apple TV 2.

Reply
post #71 of 140
Quote:
Originally Posted by sog35 View Post
 

 

Its a good thing.

 

A decrease in share count means each share represents a larger percentage of the company.  For example if there were 100 shares available and you owned 10 shares you would own 10% of the company.  If a buyback purchases 50 shares then you would own 20% of the company.  You would have 20% stake in all of Apple's assets.  As far as stock price it should go up also since Earnings PER SHARE will go up since there are less shares outstanding.

 

There are also very good reasons to start a $50B buyback this fiscal year:

 

1.  Interest rates are near all time lows.  We won't be able to say that in a year or two.

2.  Apple's stock price is severely under-valued

3.  Apple pays a 2% dividend

4.  Apple has over $150B in cash and generates $50B free cash flows a year

5.  The $150B cash is generating 1% returns

 

Unless Apple is planning on making acquisitions of over $150B in the next 12 months I see no reason for them to continue to hoard the cash.  Even if they payout $50B in buybacks they still will have $150B at the end of 2014.  Floating a bond at today's interest rates would cost Apple basically ZERO.  They would not have to pay the 2% dividend and would be able to write off the interest expense. 

 

I hold 300 shares of Apple stock and I will vote yes to the buyback

 

The only way the Buyback is a bad idea is if LONG-TERM you think the stock will be worth less than $560.  If that's the case you should just sell your shares and invest in something else.


Agreed.  There is very little downside to a larger buyback if you think Apple is worth more then $560.  If you think it is worth less you should sell or short AAPL. 

 

I own AAPL shares and would also like to see the 50B in 2014 buyback.  Just the savings on the dividend makes it worth it, with the less shares being outstanding a (huge) bonus.  The buyback is the best way to deal with a Wall Street that does not properly value AAPL.

post #72 of 140
Quote:
Originally Posted by jungmark View Post

Are you that dense or just spreading Mis-information? Name one current board member that was also on the board 30 years ago.


My point is the board can make mistakes. Many of you are acting like the board is infallible.
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
post #73 of 140
Quote:
Originally Posted by ascii View Post

I think Icahn is a finance guy and sees Apple strictly as a corporation - an instrument for giving investors as good a return as possible on their investment. In that narrow sense he may be right about what to do with the money. But the people who work there (including the CEO) see it more as an instrument of positive change in the world (primarily technological but social too), in which case a big pile of money can come in very handy.

Not a good reason to own a stock. You are better off donating to your favorite charity. Can you remind everyone what percentage of apples profits were donated to charity last year.
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
post #74 of 140
Quote:
Originally Posted by AdonisSMU View Post

Carl just came in out of nowhere and started dictating business decisions. Id be highly skeptical.

Same thing Buffett does to the companies he invest in. Bottom line is most companies don't have people on their board or exec committee that are experts on capital allocation
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
post #75 of 140
Quote:
Originally Posted by SpamSandwich View Post

I think sog35 is Icahn's little vampire daughter.

Would it be better to buy back the stock when it's $560 or when it's $700? At this rate Apple will be buying back stock all the way till late 2015 when the price will be much higher than now. All Icahn wants to do is accelerate the buy back and add $13B.
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
Apple Purchases last 12 months - iPhone 5S (two), iPhone 6, iPhone 6+ (two), iPadAir, iPadAir2, iPadMini2, AppleTV (two), MacMini, Airport Extreme, iPod Classic.
Reply
post #76 of 140
People keep saying $150b in cash. Their $150b is mostly in long term securities, which can fluctuate in value. They could take on more debt to finance the buyback and the value of their securities can drop. While they still generate lots more income every year, the ultimate aim is to increase the share price.

Investors talk as though the share price dictates the company value and if it's down, the company is struggling. The share price is determined by traders/gamblers and can go up or down regardless of what Apple is doing - Apple pretty much did nothing and it nearly doubled in less than 6 months. Apple could buy back a load more shares, release an iPhone 6 that traders aren't impressed with and the stock price doesn't move or moves very little. All this does is lose the company (and shareholders) a lot of money.

Apple is not undervalued at its current stock price. It has the highest market cap of any company in the world - 14% higher than the next company. Their profits aren't growing and they have hit the market limits.

The investors pushing for the buyback want the stock market value of their holdings to go up, it has nothing to do with Apple's best interest, it is for their own self-interest (shouldn't come as a surprise as this is the MO of stock traders).

It is true that inflation can slowly devalue Apple's securities but not if those securities increase in value - Apple invests its money for growth too. Having people with a profit motive (regardless of the effects on Apple) calling the shots is a bad thing for Apple's long-term interests.

Let's say that Apple doesn't increase the buyback and they sustain their revenue and margins for the incoming year. If Apple is undervalued, the market will push the stock price up anyway and Apple will have both lots of securities and a high market value.

If the market doesn't push the stock price up and Apple increases their securities without any plans to spend it, they can accelerate the buyback at that point because the stock price is still down and they have more assets to use.

There's no urgency to increase the debt, Apple is stable and very healthy. Any urgency comes from investors whose other interests aren't as stable and they need growth. Icahn is a major shareholder in Federal-Mogul which has a lot of staff and it or any of the other companies he invests in could require him to have money for certain business transactions:

http://www.businessweek.com/news/2012-12-03/carl-icahn-s-federal-mogul-seeks-to-extend-1-dot-8-billion-debt

The people who talk about Apple losing money by not doing a buyback speak of value in terms of the value traders put on the company, which is extremely volatile. Apple buying back a share doesn't give them an asset with assured growth, they are exchanging assets for something valued by traders. That doesn't mean it's pointless doing it at all as they can be given as awards to staff instead of assets and they can grow in value quickly when the company is undervalued but as I say, they aren't.
post #77 of 140
Quote:
Originally Posted by sog35 View Post

Not a good reason to own a stock. You are better off donating to your favorite charity. Can you remind everyone what percentage of apples profits were donated to charity last year.

Don't read it from the perspective of a stockholder, read it from the perspective of a human being.. Then it will make sense.

Tim Cook has already announced a buyback program, he knows the benefits of it. At $560 per stock, it doesn't sound like an incredible buy to me. I think 60 billion in stocks is plenty at that price. If your narrow view of this is "how can we maximize profits from Apple stock within 6 months", then yes spend all the money on stock buybacks, don't stop at $50B more. If your view is: what's best for Apple, then let this All-Star team think outside the box, they don't need a one-trick pony investor's advice. They made it this far, now all the big "wigs" come out of the woodwork with invaluable advice that Apple just couldn't survive without.
post #78 of 140
Quote:
Originally Posted by sog35 View Post

My point is the board can make mistakes. Many of you are acting like the board is infallible.

And Icahn can't make mistakes?
post #79 of 140
Quote:
Originally Posted by jungmark View Post

And Icahn can't make mistakes?

If Icahn had a controlling interest in Apple, he'd want the company split up and sold off to Samsung, Microsoft and Google.

Proud AAPL stock owner.

 

GOA

Reply

Proud AAPL stock owner.

 

GOA

Reply
post #80 of 140
Quote:
Originally Posted by SpamSandwich View Post


Give it a rest. Neither you nor any of us here know what Apple's future plans are. And I'm pretty sure Icahn has no knowledge in this matter either. I trust the board over Icahn with few exceptions (and a board that included Icahn would be a massive mistake if he has designs on such a thing).

 

But we all bloviate on this news and rumor site, don't we? :) 

New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: AAPL Investors
AppleInsider › Forums › Investors › AAPL Investors › Preliminary Apple proxy filing details Carl Icahn's $50B stock buyback plan up for shareholder vote