Morgan Stanley recommends Apple use cash for share buybacks, dividends

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  • Reply 21 of 126
    Absolutely stupid idea.



    Company's who pay dividends are usually companies with no/limited growth potential, that's why they have to pay dividends to attract investors, etc.



    Apple's revenue and profit is exploding EVERY QUARTER! paying dividend is the worst thing they can do right now with their money.
  • Reply 22 of 126
    Quote:
    Originally Posted by scotty321 View Post


    This is the Morgan Stanley that went bankrupt and was sold to Bank of America to remain solvent?



    Yeah, maybe they should keep their mouths shut when it comes to what companies need to do with their profitable cash stockpiles.



    That was what I was thinking too! Yep! Why should one be listening to folks who can't keep manage their own portfolio.
  • Reply 23 of 126
    Quote:
    Originally Posted by solipsism View Post


    Apple needs to rent out stadiums around the country for all their shareholders, setup them up as giant roller-rinks, and then throw us the bestest pizza party EVER!



    Best shareholder proposal ever!
  • Reply 24 of 126
    Quote:
    Originally Posted by scotty321 View Post


    This is the Morgan Stanley that went bankrupt and was sold to Bank of America to remain solvent?



    Yeah, maybe they should keep their mouths shut when it comes to what companies need to do with their profitable cash stockpiles.



    I think you are thinking of Merrill Lynch... http://ml.com/index.asp?id=7695_8134



    * Grammatical error was corrected.
  • Reply 25 of 126
    Quote:
    Originally Posted by cameronj View Post


    Jesus. I assume that you're an Apple shareholder. You realize that Apple is holding money that belongs to you, right?



    Er, obviously I was not serious, just saying Morgan Stanley couldn't analyse themselves out of a paper bag.



    And get this, based in the fractional reserve system that is a huge basis for so much world debt woes, even with $50 billion of cash, Apple could become a $500 billion dollar financial institution almost overnight... Making it one of the largest financial institutions in the world.
  • Reply 26 of 126
    john.bjohn.b Posts: 2,742member
    Quote:
    Originally Posted by cameronj View Post


    So you're saying you don't think Apple shares are worth buying at this price, and are only a good deal below $300? Why else would you discourage any entity from buying Apple shares (even if it's Apple itself)?



    Because Apple doesn't get value from the shares it buys back? They just go into the corporate treasury and reduce the total number of available shares (not to mention the offsetting reduction to the balance sheet).



    It's a stock trick used to prop up the share price of what the company believes is an undervalued stock. Does anyone think the Apple board thinks their shares are undervalued?



    Quote:
    Originally Posted by cameronj View Post


    Jesus. I assume that you're an Apple shareholder. You realize that Apple is holding money that belongs to you, right?



    If you don't trust Apple to manage their cash hoard, you might want to sell your shares and put your money into a company more aligned with your goals.
  • Reply 27 of 126
    Quote:
    Originally Posted by John.B View Post


    Because Apple doesn't get value from the shares it buys back? They just go into the corporate treasury and reduce the total number of available shares (not to mention the offsetting reduction to the balance sheet).



    It's a stock trick used to prop up the share price of what the company believes is an undervalued stock. Does anyone think the Apple board thinks their shares are undervalued?





    If you don't trust Apple to manage their cash hoard, you might want to sell your shares and put your money into a company more aligned with your goals.



    Apple isn't MANAGING their cash hoard, they're sitting on it.



    And yes, I would hope the Apple board thinks their shares are undervalued, because the only other option is overvalued.



    Quit the BS of "oh if you don't like it go find another company to invest in". Apple is holding my money, and I'd like to do something with it other than put it in a savings account, thank you very much.



    Thankfully, they WILL do something better with it before long, and I wonder what all you dummies will say at that point?
  • Reply 28 of 126
    tnsftnsf Posts: 203member
    Quote:
    Originally Posted by John.B View Post


    It's a stock trick used to prop up the share price of what the company believes is an undervalued stock. Does anyone think the Apple board thinks their shares are undervalued?



    While this is often the case stock buy backs are also a valid way of returning value to shareholders. If the company buys back its shares then there are fewer outstanding making the remaining shares worth more. The buying activity combined with decreasing outstanding shares causes the price to rise, thus rewarding shareholders. It is not unheard of for a very healthy company to do this when they have a lot of cash/cash flow.



    That said, I think Apple should sit on its cash. I didn't see any mention in the write-up of how any of the proposed options would actually benefit APPLE THE COMPANY AND ITS EMPLOYEES AND CUSTOMERS. Its just greedy investors trying to make a quick buck.
  • Reply 29 of 126
    Quote:
    Originally Posted by cameronj View Post


    Apple isn't MANAGING their cash hoard, they're sitting on it.



    You do realise the current GUARANTEED returns Apple gets by "sitting" on that cash hoard, don't you? The INTEREST alone from the cash hoard is enough to finance... A heck of a lot of things.



    Apple is Thinking Different, even financially. Rather than finance themselves through ever more surmounting debt, they're financing themselves essentially through interest of "sitting" on that cash hoard. Why eat the cost of 5% interest on loans when you can actually GET 5% bonus interest on your own cash. Apple is essentially its own private bank now.



    Even if nobody bought any Apple products for a year, Apple would still be in a better financial situation and still less prone to takeover than most large companies.



    Collectively we must rethink debt and recognise its crippling nature.
  • Reply 30 of 126
    I'm guessing these analysts keep coming up with ideas in order to boost Apple's share price to where it supposed to be. It appears that not many investors are buying Apple at its current share price. Look how far Apple is away from target price estimates. Investors are eager to spend money on Netflix, Intuitive Surgical, Google and Amazon, yet they're hesitant to purchase Apple. There was some article the other day saying how investors are nervous about Apple's growth. Why? I'm not really sure.



    Apple as a company is doing great, but there always seems to be some excuse as to why Apple's share price continues to lag despite being a solid, moneymaking company with what looks to be a bright future. Supposedly, the quick solution is dividends or buybacks to catch investor's interest. I'm not saying Apple should do either of them. However, I do think that Apple should be able to do something to increase Apple's valuation so investors wouldn't be so hesitant to purchase Apple stock, although I don't know what would make that happen. Of course, if Apple's share price is being intentionally manipulated, then all bets are off no matter what Apple does.



    I'm long Apple since 2004, so I've made quite a bit, but recent investors are probably looking for quicker gains.
  • Reply 31 of 126
    Quote:
    Originally Posted by TNSF View Post


    That said, I think Apple should sit on its cash. I didn't see any mention in the write-up of how any of the proposed options would actually benefit APPLE THE COMPANY AND ITS EMPLOYEES AND CUSTOMERS. Its just greedy investors trying to make a quick buck.



    I will point out that Apple is quite generous in awarding stock option grants to its employees. They want their employees to be shareholders because then they will have a vested interest in seeing the company succeed. Options and outright stock purchases via ESPP are still heavily favored employee incentives in Silicon Valley. So yeah, increasing shareholder value is good for Apple employees.



    Using cash to prepay for component purchases does help customers by driving down costs.



    We're seeing Windows PC manufacturers having trouble with their Ultrabooks as Apple has leveraged their supply chain management mastery into building a high quality notebook computer with a COGS that other PC manufacturers can't reach.



    In the end, remember that Apple, as a publicly traded corporation, has a primary responsibility in increasing shareholder value.
  • Reply 32 of 126
    Well Said Scotty321. There's a reason this woman is an "analyst".... and not running her own company. She's an idiot. Seriously????? "Apple's going to return money to it's shareholders". How far can one insert their head up their own butt???? Apple's made it's shareholders a bloody fortune. I didn't make a fortune but walked away with thousands myself. Thank you Apple. This is pure libtard thinking IMO. She probably thought the Zune was a good idea too. Apple's cash belongs to APPLE.... they earned it by giving we consumers something we want to spend money on. Oh no, wait.. capitalism is so bad.... if you earn money then it belongs to someone else.... right?



    Screw Her and the corrupt ass company she works for.



    Try getting a job for a company that we taxpayers don't have to bail out. You screw up and make crap.... you deserve to fail. You make kick ass, high quality products like Apple does... then you deserve to reap the rewards with as much stinking cash as you want to stash for however long you want to. End of STORY.
  • Reply 33 of 126
    Quote:
    Originally Posted by nvidia2008 View Post


    You do realise the current GUARANTEED returns Apple gets by "sitting" on that cash hoard, don't you? The INTEREST alone from the cash hoard is enough to finance... A heck of a lot of things.



    Apple is Thinking Different, even financially. Rather than finance themselves through ever more surmounting debt, they're financing themselves essentially through interest of "sitting" on that cash hoard. Why eat the cost of 5% interest on loans when you can actually GET 5% bonus interest on your own cash. Apple is essentially its own private bank now.



    Even if nobody bought any Apple products for a year, Apple would still be in a better financial situation and still less prone to takeover than most large companies.



    Collectively we must rethink debt and recognise its crippling nature.



    Apple wouldn't pay 5% for debt, first of all. It would be around 2%. Second, Apple has no need for any debt because it is highly profitable. Third, Apple doesn't GET 5% for it's money.



    It's amazing what uneducated people think about finances. Sheesh. You must think it's like magic or something.
  • Reply 34 of 126
    Quote:
    Originally Posted by Zaphodsplanet View Post


    Well Said Scotty321. There's a reason this woman is an "analyst".... and not running her own company. She's an idiot.



    Tell me Zaphod - are you running your own company?



    Then... are you an idiot?
  • Reply 35 of 126
    john.bjohn.b Posts: 2,742member
    Quote:
    Originally Posted by cameronj View Post


    Quit the BS of "oh if you don't like it go find another company to invest in". Apple is holding my money, and I'd like to do something with it other than put it in a savings account, thank you very much.



    That's your option.



    Quote:
    Originally Posted by cameronj View Post


    Thankfully, they WILL do something better with it before long, and I wonder what all you dummies will say at that point?



    Oh, I agree, but they won't buy a fully valued company. Probably (conjecture follows) are more interested in picking up smaller companies that can integrate products and technologies to enhance the current product lineup. Oh, and the odd patent portfolio...



    Quote:
    Originally Posted by TNSF View Post


    While this is often the case stock buy backs are also a valid way of returning value to shareholders. If the company buys back its shares then there are fewer outstanding making the remaining shares worth more. The buying activity combined with decreasing outstanding shares causes the price to rise, thus rewarding shareholders. It is not unheard of for a very healthy company to do this when they have a lot of cash/cash flow.



    That said, I think Apple should sit on its cash. I didn't see any mention in the write-up of how any of the proposed options would actually benefit APPLE THE COMPANY AND ITS EMPLOYEES AND CUSTOMERS. Its just greedy investors trying to make a quick buck.



    In MBA Finance courses, they teach the suits that this is a parlor trick to artificially prop up the stock price that is sagging, which doesn't sound like Apple to me. Buybacks don't really return value to shareholders because market forces factor that into the going rate. Esp. if the shares are held by the corporate treasury for potential later reissue.
  • Reply 36 of 126
    Share buy back my arse. You want your share of Apple's cash hoard? Sell your stock. I don't know why these unimaginative wall street types think that they know better than apple how to run their business.



    I would say Apple needs to hang on to that cash hoard and keep building it up. Because as they get deeper and deeper into cloud computing, they will be more vulnerable to getting squeezed by the wireless carriers. Apple needs at least $100 Billion to buy/build its own wireless network should AT&T and/or Verizon try to extract profits out of Apple by raising wireless rates to ridiculous levels. That $100 billion in the bank acts a deterrent, warning any upstart wireless carrier that Apple will have them for lunch if they start getting excessively greedy.



    A share buy back is just another one of those financial gimmicks that the thieving Wall Street film flam artists have invented to fool people into believing that Wall Street created some value for them when it fact the value was there all along. In this case, in the stock price.
  • Reply 37 of 126
    Quote:
    Originally Posted by mdriftmeyer View Post


    No it wouldn't. Dividends are issues by Stocks that are done growing.



    Yes it would, and no they'e not. Dividends used to be common among many (most?) companies. Just because Wall Street has turned into a mess that's not much more reliable than playing the lottery, doesn't mean a return to a traditional approach wouldn't improve value.



    Let me give you an example: Apple's stock price is so high it creates a barrier to entry. I would not buy any shares of Apple right now, because in the current economic climate, the risk of loss is too great (I don't have the ability to gamble tens of thousands of dollars of mine, or other people's money).



    But if Apple paid a regular dividend, it would make the investment worthwhile. I could buy a few shares now, and continue to purchase more over time. The point is investing money into the company now, and ensuring receipt of a benefit as they generate profits, rather than just gambling that the shares could be sold for more than they cost a few months later (or microseconds, depending on the level of habit you're addicted to).
  • Reply 38 of 126
    Quote:
    Originally Posted by John.B View Post


    In MBA Finance courses, they teach the suits that this is a parlor trick to artificially prop up the stock price that is sagging, which doesn't sound like Apple to me. Buybacks don't really return value to shareholders because market forces factor that into the going rate. Esp. if the shares are held by the corporate treasury for potential later reissue.



    Just curious, because you CLEARLY have taken MBA finance classes. What year did you take them, and from what institution? Mine (undergrad) were at Princeton in 1998-2001.
  • Reply 39 of 126
    john.bjohn.b Posts: 2,742member
    Quote:
    Originally Posted by cameronj View Post


    Just curious, because you CLEARLY have taken MBA finance classes. What year did you take them, and from what institution? Mine (undergrad) were at Princeton in 1998-2001.







    Maybe you can get hired on with Morgan Stanley...



    Unless it was you that paid for the gig with Berkshire Hathaway...
  • Reply 40 of 126
    Quote:
    Originally Posted by John.B View Post






    Maybe you can get hired on with Morgan Stanley...



    Unless it was you that got the gig with Berkshire Hathaway...



    Is that the best you have? Cmon MBA finance guy, explain where you got this expertise.
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