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Apple shares reach highest level in a year following strong earnings, stock split & larger buyback

post #1 of 67
Thread Starter 
Apple's stock has skyrocketed since last week's March quarter earnings report, in which the company excited investors with strong iPhone sales, a higher quarterly dividend, a larger share buyback program, and an upcoming 7-for-1 stock split [updated].


Apple's stock price over the last 5 days, via Yahoo.


Shares of AAPL were up nearly 3 percent as of afternoon trading on Monday, with a high during the day of over $590 per share. Shares are up more than $60 from its trading price just before Apple reported earnings last Wednesday.

Update: AAPL closed at $594.09 per share on Monday, its highest closing price in over a year.

After Apple's surprising March quarter, analysts on Wall Street responded positively, and many of them raised their price targets. Among investment firms tracked by AppleInsider, RBC Capital Markets, Cowen and Company, Evercore Partners and Canaccord Genuity all saw fit to raise their targets, while Cantor Fitzgerald held steady with its prediction of $777, the highest among major firms.

Apple's gains on Monday set a new 52-week high for the company. Shares of AAPL had tumbled from late-2012 through mid-2013 after reaching an all-time high north of $700 in September of 2012.

The company's stock surge has placed Apple out of a projected "valuation range" from Wells Fargo analyst Maynard Um. Um revised his numbers last week to predict that shares of Apple would trade between $515 and $585 for the foreseeable future, but Monday's gains pushed the company above that $585 upper tier.

The gains come after Apple beat expectations by earning $10.2 billion in quarterly net profit, driven by record sales of 43.7 million iPhones. The company also increased its share buyback plan to $90 billion through 2015, which it is expected to help finance with what could be come the second largest bond sale in corporate history.


The New York Stock Exchange, credit Carlos Delgado via Wikipedia.


Investors will also benefit from a new, larger quarterly dividend payout of $3.29 per share, and Apple executives have pledged to revisit and likely increase that dividend on an annual basis.

Finally, Wall Street watchers are excited about an upcoming 7-for-1 stock split, set to take place on June 2. Each shareholder of AAPL as of that date will be awarded six additional shares, which will be reflected when split-adjusted trading begins on June 9.

These capital allocation plans are made possible by Apple's massive $150 billion cash pile, which continues to grow as a result of the company's high margins and continuing record sales of its blockbuster iPhone lineup. Investors are hopeful that new products from the second half of 2014, including an anticipated refresh to the iPhone lineup potentially with larger displays, will further drive growth and profitability for the Cupertino, Calif., electronics maker.
post #2 of 67

Both Apple and Google are 15% below all time highs.

 

Difference is they are going in opposite directions.

post #3 of 67
Cash and investments actually shrunk from $159 billion to $150 billion because of increased use of that cash.
post #4 of 67
Quote:
Originally Posted by sog35 View Post

Both Apple and Google are 15% below all time highs.

Difference is they are going in opposite directions.
A major reason with Google is down is because while clicks went up 29%, return per click went down, though I forget by how much. Also, they don't seem to be making a dent in mobile.
post #5 of 67

I am still not bought into this whole Stock split, it just dilutes the value. I know the big guys are buying in now to get the dividend as well as getting in on the split and they will dump shares after the split. But look at google after the split, it just been coming down, in spite of all the positive news, (burying the bad news) it can not fight the decline due to the dilution. Also, with the stock price being so low after the split and the fact the market is still looking for new ways to create negative spin it just make shorting the stock a lot easier.

 

The only way I see apple pricing going above $100 post split in the next 12 months is if the have killer new products to offer. beyond that, it is looking like a slow grow stock to me.

post #6 of 67
This has gotta be bullshit! How can a doomed company's stock be rising??
"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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post #7 of 67
Quote:
Originally Posted by melgross View Post

A major reason with Google is down is because while clicks went up 29%, return per click went down, though I forget by how much. Also, they don't seem to be making a dent in mobile.

...and less of a dent as Apple marginalizes them going forward. How's that stolen OS IP working out for you, Eric?
"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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post #8 of 67
Quote:
Originally Posted by sog35 View Post

Both Apple and Google are 15% below all time highs.

Difference is they are going in opposite directions.
Amazon is down almost 30% YTD. If that was Apple CNBC would be reporting D&G 24/7. With Amazon they bring on any analyst they can find who will make excuses for Amazon and the whole Bezos is spending for growth meme. Perhaps investors are finally asking to see a return on all this "investment". Oh and BTW CNBC, Apple's capital expenditures this year will be over $11B. Yet somehow they still are able to generate profits.
post #9 of 67
Quote:
Originally Posted by melgross View Post


A major reason with Google is down is because while clicks went up 29%, return per click went down, though I forget by how much. Also, they don't seem to be making a dent in mobile.

 

Google's EPS was up only 1% last quarter (using GAAP, not some BS google made up)

 

Their main cash cow (desktop search) is shrinking every year since more people are moving to mobile search.  Plus Facebook, Twitter, Apple's App store, and Siri do searches seperate from Google.

post #10 of 67
Quote:
Originally Posted by Maestro64 View Post

I am still not bought into this whole Stock split, it just dilutes the value. I know the big guys are buying in now to get the dividend as well as getting in on the split and they will dump shares after the split. But look at google after the split, it just been coming down, in spite of all the positive news, (burying the bad news) it can not fight the decline due to the dilution. Also, with the stock price being so low after the split and the fact the market is still looking for new ways to create negative spin it just make shorting the stock a lot easier.

The only way I see apple pricing going above $100 post split in the next 12 months is if the have killer new products to offer. beyond that, it is looking like a slow grow stock to me.

Well that's equal to an over $700 stock price pre-split. It won't be an easy road to that price unless they have an announcement of something new anyways.
post #11 of 67
Quote:
Originally Posted by melgross View Post

A major reason with Google is down is because while clicks went up 29%, return per click went down, though I forget by how much. Also, they don't seem to be making a dent in mobile.
Facebook had a good quarter yet their stock is still taking a beating. I find it slightly amusing that all these tech stocks are getting hammered today but both Apple and Microsoft are way up.
post #12 of 67
Quote:
Originally Posted by Maestro64 View Post
 

I am still not bought into this whole Stock split, it just dilutes the value. I know the big guys are buying in now to get the dividend as well as getting in on the split and they will dump shares after the split. But look at google after the split, it just been coming down, in spite of all the positive news, (burying the bad news) it can not fight the decline due to the dilution. Also, with the stock price being so low after the split and the fact the market is still looking for new ways to create negative spin it just make shorting the stock a lot easier.

 

The only way I see apple pricing going above $100 post split in the next 12 months is if the have killer new products to offer. beyond that, it is looking like a slow grow stock to me.

 

Really?

 

Google is not down because of the stock split.  They are down because they reported HORRIBLE earnings last quarter.  They grew EPS 1% which is incredibly bad for a company with a PE Ratio of 28.  Companies with a high PE Ratio of 25-30 need to be growing earnings at least 20%.

 

Also the Google stock split diluted the voting rights for all shareholders EXCEPT the founders.  If you held 5% of Google stock, now you only have 2.5% of voting rights.  Total BS.  Can't believe the shareholders voted for the split. 

post #13 of 67
Quote:
Originally Posted by sog35 View Post

Really?

Google is not down because of the stock split.  They are down because they reported HORRIBLE earnings last quarter.  They grew EPS 1% which is incredibly bad for a company with a PE Ratio of 28.  Companies with a high PE Ratio of 25-30 need to be growing earnings at least 20%.

Also the Google stock split diluted the voting rights for all shareholders EXCEPT the founders.  If you held 5% of Google stock, now you only have 2.5% of voting rights.  Total BS.  Can't believe the shareholders voted for the split. 
I guess Larry and Sergey have a bigger RDF than Steve Jobs ever did and shareholders are eating it up.
post #14 of 67
Quote:
Originally Posted by Rogifan View Post


Facebook had a good quarter yet their stock is still taking a beating. I find it slightly amusing that all these tech stocks are getting hammered today but both Apple and Microsoft are way up.

 

Good quarter?  By who's standards.

 

Facebook's stock price was at $70 a few weeks ago.

Then they reported earnings of 9 cents a share.  NINE CENTS A SHARE. 

If I invest $70 in something I certainly want more than NINE CENTS PROFIT!!!

 

IMO these ridiculously valued stocks are finally getting their valuation corrected.

 

The market is moving from Growth stocks to Value stocks.  Which is great for Apple investors.

post #15 of 67
Quote:
Originally Posted by Maestro64 View Post
 

I am still not bought into this whole Stock split, it just dilutes the value. I know the big guys are buying in now to get the dividend as well as getting in on the split and they will dump shares after the split. But look at google after the split, it just been coming down, in spite of all the positive news, (burying the bad news) it can not fight the decline due to the dilution. Also, with the stock price being so low after the split and the fact the market is still looking for new ways to create negative spin it just make shorting the stock a lot easier.

 

The only way I see apple pricing going above $100 post split in the next 12 months is if the have killer new products to offer. beyond that, it is looking like a slow grow stock to me.

 

Stock splits do not "dilute value."

 

If you get change for a $20 and pay no fees, your 3 $5s and 5 $1s are still worth the same.

 

The only thing that dilutes shareholder value is when a company issues more shares, which most tech companies do as they recruit & retain employees. Buying back shares does the opposite, "concentrating" value of shares. 

 

So Apple buying back shares is the opposite of dilution, and the split has ZERO impact on (the price per share * shares outstanding). Zero.

 

As noted by sog35 above, Google's split was different in that it didn't just split its stock: it cut the value in half and paid holders a "dividend" of stock worth the same on paper, but without any voting rights. Google diluted the voice of shareholders. Apple's 7-1 split has no impact on votes because there will just be 7x as many shares, and current owners will have 7x as many. That's zero effective change. 

 

Also, Apple just closed at $594.09 up +22.15 (3.87%) for the day. 

post #16 of 67
Quote:
Originally Posted by Maestro64 View Post
 

I am still not bought into this whole Stock split, it just dilutes the value. I know the big guys are buying in now to get the dividend as well as getting in on the split and they will dump shares after the split. But look at google after the split, it just been coming down, in spite of all the positive news, (burying the bad news) it can not fight the decline due to the dilution. Also, with the stock price being so low after the split and the fact the market is still looking for new ways to create negative spin it just make shorting the stock a lot easier.

 

The only way I see apple pricing going above $100 post split in the next 12 months is if the have killer new products to offer. beyond that, it is looking like a slow grow stock to me.

Why look at google after the split, when you can look directly at Apple after the split? 1987, 2000, 2005.

Made me rich.

…and, oh yeah, "Killer new product over next 12 months"… You really betting "against" that??

Good luck.

post #17 of 67
Quote:
Originally Posted by Maestro64 View Post

I am still not bought into this whole Stock split, it just dilutes the value. I know the big guys are buying in now to get the dividend as well as getting in on the split and they will dump shares after the split. But look at google after the split, it just been coming down, in spite of all the positive news, (burying the bad news) it can not fight the decline due to the dilution. Also, with the stock price being so low after the split and the fact the market is still looking for new ways to create negative spin it just make shorting the stock a lot easier.

The only way I see apple pricing going above $100 post split in the next 12 months is if the have killer new products to offer. beyond that, it is looking like a slow grow stock to me.

I am curious why would think big boys care about the split, it makes zero difference mathematically. Same with the 'dilute argument, it makes no difference to anything. As many have said it only makes a psychological and affordability per share issue and they are real benefits to many small scale buyers. Anecdotally, I already know of a several folks about to but a share each for grandchildren since it is now 'affordable' to this when you have a few grandkids.

As to you not seeing it go over $100 post split in the next 12 months ... care to wager on that? 1wink.gif
Edited by digitalclips - 4/28/14 at 3:21pm
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Been using Apple since Apple ][ - Long on AAPL so biased
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post #18 of 67
So many uninformed people. I'm just glad I deal with fewer humans than apple does. The stock split does not dilute shareholder value. And where are all the complainers from the other day, who were spitting mad because they hadn't earned much on their stocks lately (what have you done for me lately). I guess they're happy for another moment. Alright shareholders, go back to sitting on your butts.
post #19 of 67
Quote:
Originally Posted by Corrections View Post

As noted by sog35 above, Google's split was different in that it didn't just split its stock: it cut the value in half and paid holders a "dividend" of stock worth the same on paper, but without any voting rights. Google diluted the voice of shareholders.

Google's issuance of Class C stock did not create any new votes, nor did it remove any votes from the owners of the Class A stock (who received the newly issued Class C shares on a one for one basis). The voice of the shareholders is just as diluted or concentrated as it was before the issuance. If someone sells their Class A shares and keeps their Class C shares, their voice will disappear, obviously (but then it will be owned by another person, so no real change in the "voice of shareholders").
post #20 of 67
Quote:
Originally Posted by Maestro64 View Post

The only way I see apple pricing going above $100 post split in the next 12 months is if the have killer new products to offer. beyond that, it is looking like a slow grow stock to me.

1) I don't know what defines "killer" in your eyes but I bought a new iPhone, iPad mini and 15" MBP in 2013 because they were "killer" products to me. I suspect I'll be buying a "killer" new iPhone this year and quite possibly be buying a "killer" new MBP in 12 months (although perhaps a little longer depending on when 2nd cycle of updates occur, or much sooner if they change the casing or something else, like adding TouchID). This is all without even considering a new product category which they likely won't even announce unless it's "killer" which I think is coming to a head with their push for more and more R&D.

2) Without the split that would be $700 per share. You don't really think that with Apple's amazing revenue, profits (which are higher than Google's revenue), buybacks, and all all their annual product releases that it would be impossible to go up $100 per share? I think it's easily possible considering it was below $500 ($100 lower than today) back in January/February of this year. That's not too long ago.
Edited by SolipsismX - 4/28/14 at 5:36pm

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post #21 of 67

Steve Jobs would never do a stock split.

 

/s

post #22 of 67
What an awesome time to be an Apple customer and/or investor.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #23 of 67

I read somewhere that APPL is up on the new report of increased market share in Europe and Japan. That makes sense to me. The stock split and the stock buyback wouldn't cause another 20 point jump. That has already been factored in for two day. Look at the near stagnate price since opening up on Tuesday. 

post #24 of 67
Quote:
Originally Posted by SolipsismX View Post

What an awesome time to be an Apple customer and/or investor.

You said it! Very, very exciting.
Been using Apple since Apple ][ - Long on AAPL so biased
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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 #25 of 67
Quote:
Originally Posted by melgross View Post


A major reason with Google is down is because while clicks went up 29%, return per click went down, though I forget by how much. Also, they don't seem to be making a dent in mobile.

 

More people are slowly starting to question their vaporware, the lack of hardware profit.


Edited by Danox - 4/28/14 at 8:03pm
post #26 of 67
Quote:
Originally Posted by quinney View Post


Google's issuance of Class C stock did not create any new votes, nor did it remove any votes from the owners of the Class A stock (who received the newly issued Class C shares on a one for one basis). The voice of the shareholders is just as diluted or concentrated as it was before the issuance. If someone sells their Class A shares and keeps their Class C shares, their voice will disappear, obviously (but then it will be owned by another person, so no real change in the "voice of shareholders").

 

In time GOOG (non voting) will decrease in value.

post #27 of 67
Quote:
Originally Posted by Maestro64 View Post

I am still not bought into this whole Stock split, it just dilutes the value. I know the big guys are buying in now to get the dividend as well as getting in on the split and they will dump shares after the split. But look at google after the split, it just been coming down, in spite of all the positive news, (burying the bad news) it can not fight the decline due to the dilution. Also, with the stock price being so low after the split and the fact the market is still looking for new ways to create negative spin it just make shorting the stock a lot easier.

The only way I see apple pricing going above $100 post split in the next 12 months is if the have killer new products to offer. beyond that, it is looking like a slow grow stock to me.

It doesn't dilute the value.
post #28 of 67
Quote:
Originally Posted by Rogifan View Post

Facebook had a good quarter yet their stock is still taking a beating. I find it slightly amusing that all these tech stocks are getting hammered today but both Apple and Microsoft are way up.

It's odd about Facebook. I know why Apple is up, and why Microsoft is up but I don't know why Facebook is down, though I know why Twitter is down.

I'll never understand why Blackberry is up.

And Amazon should continue going down. It's only worth about $50.
post #29 of 67
Quote:
Originally Posted by Maestro64 View Post
 

I am still not bought into this whole Stock split, it just dilutes the value. I know the big guys are buying in now to get the dividend as well as getting in on the split and they will dump shares after the split. But look at google after the split, it just been coming down, in spite of all the positive news, (burying the bad news) it can not fight the decline due to the dilution. Also, with the stock price being so low after the split and the fact the market is still looking for new ways to create negative spin it just make shorting the stock a lot easier.

 

The only way I see apple pricing going above $100 post split in the next 12 months is if the have killer new products to offer. beyond that, it is looking like a slow grow stock to me.

 

I think it's worth while to consider Apple as not just a typical company splitting its stock.  Apple has an army of rabid fans who would buy the stock if they could afford to do so.  My son just asked me if he could buy a share of Apple after the stock split news came out.  I told him the transaction costs would put a real dent in any profits he might get from buying 1 share.  $9.99 at Etrade fee to buy and another $9.99 to sell means his Apple stock needs to rise to $120 from $100 (for example) just to break even.  He wants to do it anyways.. just so he can say he owns the stock.  I've never heard of someone saying that about Caterpillar's stock.  My son is the extreme case... but I'm sure there are quite a large number of casual investors who have been put off by Apple's current stock price.  These potential investors are also less likely to abandon the stock when the news starts becoming negative (whether it's based on reality or not).

 

It's also worth noting that this will actually hurt more intermediate investors.  I for one will be paying more fees for buying and selling Apple options.  There's a per contract cost in addition to a base fee and now I'll have to buy 7x the number of contracts to get the same amount of capital working as I do now.

post #30 of 67
Quote:
Originally Posted by sog35 View Post

Good quarter?  By who's standards.

Facebook's stock price was at $70 a few weeks ago.
Then they reported earnings of 9 cents a share.  NINE CENTS A SHARE. 
If I invest $70 in something I certainly want more than NINE CENTS PROFIT!!!

IMO these ridiculously valued stocks are finally getting their valuation corrected.

The market is moving from Growth stocks to Value stocks.  Which is great for Apple investors.

You can't go by earnings per share without having other information. How many shares are there? How big is the company? What are sales, etc. Facebook had a very good quarter. Above expectations.
post #31 of 67
'and wh
Quote:
Originally Posted by Macky the Macky View Post

This has gotta be bullshit! How can a doomed company's stock be rising??
ar
post #32 of 67
Quote:
Originally Posted by digitalclips View Post

I am curious why would think big boys care about the split, it makes zero difference mathematically. Same with the 'dilute argument, it makes no difference to anything. As many have said it only makes a psychological and affordability per share issue and they are real benefits to many small scale buyers. Anecdotally, I already know of a several folks about to but a share each for grandchildren since it is now 'affordable' to this when you have a few grandkids.

As to you not seeing it go over $100 post split in the next 12 months ... care to wager on that? 1wink.gif

Right. One of the main reasons for this split is so small traders can be into the 100 share buy/sell number. That's a standard order size. There are reasons why one would prefer to work with that size, or even multiples thereof.

A lessor reason is that it makes it possible for Apple to get included in the DOW, though I'm not a fan of the useless Dow.
post #33 of 67
Well Apple's stock was vastly under-valued and beat-down for the past 24 months, most of it by mere speculation and rumor intelligence by the bloggers. During this crape-hanging period, Apple produced huge revenue and profits despite the naysayers. It seems that the Street finally took notice of both the good margins and earnings and the stock is now taking on a value that more correctly reflects its value. I believe that the Street is also aware of the positive potential for new Apple products, revenue streams, an increasing China consumption market and a new VP of retail.
post #34 of 67
Quote:
Originally Posted by melgross View Post

It's odd about Facebook. I know why Apple is up, and why Microsoft is up but I don't know why Facebook is down, though I know why Twitter is down.

I'll never understand why Blackberry is up.

And Amazon should continue going down. It's only worth about $50.
Yes I am amazed at how much leeway Jeff Bezos is given, Amazon is a 17-year-old company yet the Wall Street "analysts" keep excusing away no profits saying profits will come when Amazon is done investing. But how many years have they even saying this now? 10 years from now they'll probably be saying the same thing.
post #35 of 67
Quote:
Originally Posted by SolipsismX View Post

1) I don't know what defines "killer" in your eyes but I bought a new iPhone, iPad mini and 15" MBP in 2013 because they were "killer" products to me. I suspect I'll be buying a "killer" new iPhone this year and quite possibly be buying a "killer" new MBP in 12 months (although perhaps a little longer depending on when 2nd cycle of updates occur, or if they change the casing design). This is all without even considering a new product category which they likely won't even announce unless it's "killer" which I think is coming to a head with their push for more and more R&D.

2) Without the split that would be $700 per share. You don't really think that with Apple's amazing revenue, profits (which are higher than Google's revenue), buybacks, and all all their annual product releases that it would be impossible to go up $100 per share? I think it's easily possible considering it was below $500 (down $100) back in January/February of this year. That's not too long ago.

Agreed. Coming up later this year will be three new 4.7" (assuming that's what the size will be) 64GB iPhones for us, as well as two full size 128GB, cell and GPS enabled iPads.

Next year will be two more iPads, a Mac Pro, and possibly something else.

I'm not alone in this.

Oh, I almost forgot...I know a lot of people buying iPhones. More than a few have, as a result, and the continued use of my iPad, bought their own iPads, and some are now buying new computers, from guess which company? I've got several of my friends saying that they went with Apple and; "I'm loving it!".
post #36 of 67
Quote:
Originally Posted by Rogifan View Post

Yes I am amazed at how much leeway Jeff Bezos is given, Amazon is a 17-year-old company yet the Wall Street "analysts" keep excusing away no profits saying profits will come when Amazon is done investing. But how many years have they even saying this now? 10 years from now they'll probably be saying the same thing.

I agree but leave Amazon alone, I'm an addict 1wink.gif
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post #37 of 67
Quote:
Originally Posted by dsd View Post

Steve Jobs would never do a stock split.

/s

If you don't learn history, you are doomed to repeat other's mistakes. You aren't the first to make this incorrect comment. Jobs ok'd a stock split in 2005. I was the happy recipient of that.
post #38 of 67
Quote:
Originally Posted by Danox View Post

More people are slowly starting to question their vaporware, the the lack of hardware profit.

While I've argued about this on other sites, I believe very strongly that a lot of what Google does is for the publicity. Other things are just weird mistakes. As with Microsoft, hardware ain't their thing.
post #39 of 67
Quote:
Originally Posted by melgross View Post

Agreed. Coming up later this year will be three new 4.7" (assuming that's what the size will be) 64GB iPhones for us, as well as two full size 128GB, cell and GPS enabled iPads.

Next year will be two more iPads, a Mac Pro, and possibly something else.

I'm not alone in this.

Oh, I almost forgot...I know a lot of people buying iPhones. More than a few have, as a result, and the continued use of my iPad, bought their own iPads, and some are now buying new computers, from guess which company? I've got several of my friends saying that they went with Apple and; "I'm loving it!".

1) Speaking of 128GB iPhones I hope this is the year we get a doubling of the capacities at the current price points but I wonder if that will happen when they are re-releasing an 8GB iPhone in some markets.

2) Unlike some people I don't think the Mac is going anywhere. I agree with Jobs "trucks v cars" analogy and expect that the Mac will slowly grow in a yeay basis (and quickly grow if they can get around $800 for a notebook).

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"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #40 of 67
Quote:
Originally Posted by Serendip View Post

I think it's worth while to consider Apple as not just a typical company splitting its stock.  Apple has an army of rabid fans who would buy the stock if they could afford to do so.  My son just asked me if he could buy a share of Apple after the stock split news came out.  I told him the transaction costs would put a real dent in any profits he might get from buying 1 share.  $9.99 at Etrade fee to buy and another $9.99 to sell means his Apple stock needs to rise to $120 from $100 (for example) just to break even.  He wants to do it anyways.. just so he can say he owns the stock.  I've never heard of someone saying that about Caterpillar's stock.  My son is the extreme case... but I'm sure there are quite a large number of casual investors who have been put off by Apple's current stock price.  These potential investors are also less likely to abandon the stock when the news starts becoming negative (whether it's based on reality or not).

It's also worth noting that this will actually hurt more intermediate investors.  I for one will be paying more fees for buying and selling Apple options.  There's a per contract cost in addition to a base fee and now I'll have to buy 7x the number of contracts to get the same amount of capital working as I do now.

Use a service such as Scotttrade. They charge $10 or less per trade. I use them for most of my trading these days, and have my big investment accounts elsewhere.
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