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Carl Icahn drops push for more aggressive Apple share buyback - Page 3

post #81 of 102
Quote:
Originally Posted by redefiler View Post
 

It's roughly 1/3 of their cash.  Spending a third of your savings on dumb stuff is always 'insanely stupid'.  They don't need the stock, and that cash is much more valuable for other options.

 

So was Apple 'insanely stupid' for buying back $40B the last 9 months?

Yes or No.

post #82 of 102
Quote:
Originally Posted by redefiler View Post
 

 

Much mental gymnastic folding, yet this logic still doesn't quite fit into the box.  

Apple's past words and actions mean more than your speculation of future events.

 

I've go massive crystal balls, and they say Apple won't be taking on any debt to buy back stocks, because that's a stupid idea and their management has been very smart about handling their money.  

 

I guess you like Carl, great... but he's the one offering the 'peace treaty' not the other way around.  I'm not sure there's enough energy in the physical universe to muster this into a win for him.  No need for tears, I'm sure he can afford to buy a nice hanky for the egg on his face.

 

So was it bad that Apple took on $16B in debt last year?

Yes or No

post #83 of 102
Quote:
Originally Posted by redefiler View Post
 

It's roughly 1/3 of their cash.  Spending a third of your savings on dumb stuff is always 'insanely stupid'.  They don't need the stock, and that cash is much more valuable for other options.

So you are saying that Apple stock is "dumb stuff"? If Apple thinks that AAPL is undervalued (and they would know better than anyone else), buying it seems like a wonderful idea, and in any case, cash earns nothing, or close to nothing, Apple stock pays a dividend (and grows, albeit slowly these days), so it is clearly a better investment than cash.

post #84 of 102
Quote:
Originally Posted by sog35 View Post
 

 

So was Apple 'insanely stupid' for buying back $40B the last 9 months?

Yes or No.

Save your questions for later, because your 9 months encompass two different tax years,

and that distinction is a upper division subject.

 

Let's go back over the basics:

Apple has not spent any more than their original stated 60 billion on stock buyback.  

So far... in this universe, Carl's influence has yielded zero results.  

 

If that changes sometime in the future, get back to me.  Run along and happy trails.

post #85 of 102
Quote:
Originally Posted by redefiler View Post
 

Save your questions for later, because your 9 months encompass two different tax years,

and that distinction is a upper division subject.

 

Let's go back over the basics:

Apple has not spent any more than their original stated 60 billion on stock buyback.  

So far... in this universe, Carl's influence has yielded zero results.  

 

If that changes sometime in the future, get back to me.  Run along and happy trails.

 

tax years are irrelevant.

Apple bought back $40B in 9 months.

Is that idiotic?  yes or no.

 

If you are stuck on the tax year BS, explain to me why the tax year matters.

My guess is you had no idea Apple bought back $40B in 9 months and you are just covering your azz.

post #86 of 102
Quote:
Originally Posted by marubeni View Post
 

So you are saying that Apple stock is "dumb stuff"? If Apple thinks that AAPL is undervalued (and they would know better than anyone else), buying it seems like a wonderful idea, and in any case, cash earns nothing, or close to nothing, Apple stock pays a dividend (and grows, albeit slowly these days), so it is clearly a better investment than cash.

 

What does Apple need more?

-More AAPL stock

-Anything else in the entire world that 1/3 of their savings could afford

 

One burrito for lunch is not dumb, but buying 1000 burritos you don't really need is completely stupid.

Also remember, it's exponentially easier to spend money than to save it.

 

Cash earns nothing? Since it's used in this context as a short hand term for savings, I'm pretty sure Apple's got it all in various accounts (which can earn interest), rather than in stacks of $20's tucked under Tim Cook's mattress.

post #87 of 102

Ultimately, my point of view is that nobody knows Apple's business as well as Apple does. I can also see that Apple is extremely conscious of their growing cash holdings. They have constantly said that they are working on returning money to shareholders. I don't think that Apple is just sitting on the cash out of spite or out of fear. Sure, they are more conservative than most of their competitors but I just don't think that Apple's long term vision and Icahn's long term vision is the same. Apple is thinking about all their investors as a whole while Icahn is thinking more about Icahn. That is his precedent.

post #88 of 102
Quote:
Originally Posted by redefiler View Post
 

 

What does Apple need more?

-More AAPL stock

-Anything else in the entire world that 1/3 of their savings could afford

 

One burrito for lunch is not dumb, but buying 1000 burritos you don't really need is completely stupid.

Also remember, it's exponentially easier to spend money than to save it.

 

Cash earns nothing? Since it's used in this context as a short hand term for savings, I'm pretty sure Apple's got it all in various accounts (which can earn interest), rather than in stacks of $20's tucked under Tim Cook's mattress.

 


This post is a perfect example of how clueless some people are about investing and finance.

 

Please get an education in finance and THEN rejoin the discussion.  Your lack of knowlege in the field combined with your arrogance is laughable.

post #89 of 102
Quote:
Originally Posted by sog35 View Post
 

 

So was it bad that Apple took on $16B in debt last year?

Yes or No

Maybe.  It's almost a certainty that it would be a bad idea to take on the debt for Carl's suggestions, which is what we are talking about.

Apple's plan still hasn't changed, Carl's is now vaporware.

 

Nice try on a semantic niggle.  

Maybe its a Valentine thing for Carl, but there's still no way to spin all this into win for him.

 

Got anything else or new?

post #90 of 102
Quote:
Originally Posted by redefiler View Post
 

Maybe.  It's almost a certainty that it would be a bad idea to take on the debt for Carl's suggestions, which is what we are talking about.

Apple's plan still hasn't changed, Carl's is now vaporware.

 

Nice try on a semantic niggle.  

Maybe its a Valentine thing for Carl, but there's still no way to spin all this into win for him.

 

Got anything else or new?

 

Why is it bad to take additional debt?

post #91 of 102
Quote:
Originally Posted by sog35 View Post

Why is it bad to take additional debt?
It isn't. It makes very good sense given current availability of credit at practically no interest.

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post #92 of 102
Originally Posted by AppleInsider View Post

"Keep buying Tim!"

 

What he said: "Keep buying Tim!"

 

What he meant: "Make me even more obscenely wealthy Tim!"

Sent from my iPhone Simulator

Reply

Sent from my iPhone Simulator

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post #93 of 102
Quote:
Originally Posted by redefiler View Post
 

 

What does Apple need more?

-More AAPL stock

-Anything else in the entire world that 1/3 of their savings could afford

 

One burrito for lunch is not dumb, but buying 1000 burritos you don't really need is completely stupid.

Also remember, it's exponentially easier to spend money than to save it.

 

Cash earns nothing? Since it's used in this context as a short hand term for savings, I'm pretty sure Apple's got it all in various accounts (which can earn interest), rather than in stacks of $20's tucked under Tim Cook's mattress.

 

Look, you obviously have no clue, nor any hope for getting one, but let's try this again just for closure: If I have $3000, and I use $1000 to buy Swiss Francs. Did I just waste my money? As for how much interest Apple earns, it is a matter of public record, and it is WAY under 1%. So, buying back stock actually SAVES them money, since they don't have to pay out those dividends. AND the stock appreciates while in the treasury, so next time they give stock grants, it is cheaper.

 

What a maroon...

post #94 of 102
Quote:
Originally Posted by sog35 View Post

 

Why is it bad to take additional debt?

It is not always imprudent to take on additional debt. It depends on the level.

 

To answer your question, it can be quite bad to take on debt beyond a certain level because:

 

  1. It increases the risk of financial distress;
  2. It increases financial risk to shareholders because they're pushed down in priority in terms of claims to the firm's cash flows (ore precisely, their expected returns go up because – sorry to get technical – their ‘equity ß' (but not the asset ß) goes up);
  3. The more debt you take on, the lower your credit rating, thereby raising the marginal cost of additional debt;
  4. Senior debt – the kind that Apple would issue – comes with indentures, which place all sorts of restrictions on management behavior on things from working capital, to share repurchases, to dividend payments, to capex….. the list goes on
  5. It could eliminate your financial slack, i.e., you may not have as much access to external capital as you like (and at a cost you want) when you actually need it, when, for example, major new investment opportunities present themselves;
  6. External financing is always more expensive than internal financing because of transaction costs, filing/registration requirements, signaling costs, agency costs;

 

In general, there is no need to take on debt unless you want to take on debt (or unless you think you could become a takeover target, and want to preemptively recapitalize).


Edited by anantksundaram - 2/10/14 at 3:43pm
post #95 of 102
Already voted against it week two weeks ago online
post #96 of 102
Quote:
Originally Posted by foad View Post
 

Ultimately, my point of view is that nobody knows Apple's business as well as Apple does. I can also see that Apple is extremely conscious of their growing cash holdings. They have constantly said that they are working on returning money to shareholders. I don't think that Apple is just sitting on the cash out of spite or out of fear. Sure, they are more conservative than most of their competitors but I just don't think that Apple's long term vision and Icahn's long term vision is the same. Apple is thinking about all their investors as a whole while Icahn is thinking more about Icahn. That is his precedent.

That’s the simple bottom line, if you trust Apple management.

 

I do. (Although I believe that they really need to do a much better job of managing Wall Street expectations – they’re doing a p!$$-poor job on that front, IMHO).

 

A guy like Icahn has no business giving advice to Apple. In fact, given his company’s pathetic stock performance (relative to Apple’s), it is laughable and arrogant for him to presume to do that.

 

See my reply to sog35 here, for more on Icahn's stock v. AAPL: http://bit.ly/1ejzEML

post #97 of 102
Quote:
Originally Posted by anantksundaram View Post
 

That’s the simple bottom line, if you trust Apple management.

 

I do. (Although I believe that they really need to do a much better job of managing Wall Street expectations – they’re doing a p!$$-poor job on that front, IMHO).

 

A guy like Icahn has no business giving advice to Apple. In fact, given his company’s pathetic stock performance (relative to Apple’s), it is laughable and arrogant for him to presume to do that.

 

See my reply to sog35 here, for more on Icahn's stock v. AAPL: http://bit.ly/1ejzEML

 

I completely agree with trusting Apple management. They don't always do or say what folks would like to see or hear but they have a strong understanding of their business and their customers. Carl Icahn is solely interested in making money. Sure he's an investor and that what an investor needs to do, but I don't think he is providing Apple any insight that they don't have on their own. His long term might be a year or two, if that, but Apple's long term is infinitely longer than that.

 

I also think there are outside factors influencing the stock other than how Apple is managing Wall Street's expectations. Apple took the initiative awhile back to give more accurate guidance to try and taper expectations. They also provide more insight into their business than pretty much all their competitors. Apple, especially Tim Cook, has been stepping out of its shadows more lately with things like announcing the Mac Pro so far in advance, Tim Cook doing more interviews and even talking about entering new product categories. I think those are all steps in the right direction but I also think there are institutions and other large investors, including people like Icahn, that are influencing the stock beyond what folks see in public.

 

edited for typos.


Edited by foad - 2/11/14 at 12:59am
post #98 of 102
Maybe Icahn should turn his attention to Fox, a nice even split between media and newspapers leaving plenty of assets to sell off, Rupert's getting on in years and there are plenty of opportunities for an activist shareholder to restructure with some juicy profits, once Rupert is out of the way.
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post #99 of 102
Quote:
Originally Posted by marubeni View Post

Quote:
Originally Posted by Frac View Post

Remind me never tp play poker with Tim Cook.

Icahn raised twice and folded when Apple called...and they still didn't show their hand.

Icahn bought apple in the $400-$450 range four months ago. Apple is now $529. Man, what a loser! No, not Carl, YOU.
Quote:
Originally Posted by marubeni View Post

Quote:
Originally Posted by Frac View Post

Remind me never tp play poker with Tim Cook.

Icahn raised twice and folded when Apple called...and they still didn't show their hand.

Icahn bought apple in the $400-$450 range four months ago. Apple is now $529. Man, what a loser! No, not Carl, YOU.

Please...take a humour pill and lighten up. 1oyvey.gif
post #100 of 102
Quote:
Originally Posted by marubeni View Post
 

 

Look, you obviously have no clue, nor any hope for getting one, but let's try this again just for closure: If I have $3000, and I use $1000 to buy Swiss Francs. Did I just waste my money? As for how much interest Apple earns, it is a matter of public record, and it is WAY under 1%. So, buying back stock actually SAVES them money, since they don't have to pay out those dividends. AND the stock appreciates while in the treasury, so next time they give stock grants, it is cheaper.

 

What a maroon...

Seems like I was correct in that 1% is more than nothing?  Get over it.

 

You know... if buying back Icahn's amounts of stock is such a absolute sure and totally perfect way to make money, I'm sure Apple would love to do that... oh wait... they aren't.  So maybe it's time to get off this hobby horse and leave Carl's o-ring unsuctioned.

post #101 of 102
Quote:
Originally Posted by redefiler View Post
 

Seems like I was correct in that 1% is more than nothing?  Get over it.

 

You know... if buying back Icahn's amounts of stock is such a absolute sure and totally perfect way to make money, I'm sure Apple would love to do that... oh wait... they aren't.  So maybe it's time to get off this hobby horse and leave Carl's o-ring unsuctioned.

 

No, 1% is LESS than nothing, since Apple pays more than that in dividends.

post #102 of 102
Quote:
Originally Posted by marubeni View Post
 

 

No, 1% is LESS than nothing, since Apple pays more than that in dividends.

You said Apple makes zero from 'cash'.  :no:

You then cited Apple makes '1% from cash' as evidence that Apple makes 'zero'.  :???:

Now by creative accounting, you've said that Apple makes 'less than zero' on 'cash' because of a different expense in a different area.  :rolleyes: 

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