Al Gore had an option to buy 60,000 shares. He's been on the board for a long time, and the option, which was granted years ago, allowed him to buy those shares at $7.48/share. It's no different than anyone else who has stock options in that regard. Here's a story about this:
To answer your question, Apple is responsible for giving those share to Mr. Gore, as with any option being exercised. In the past, Apple would simply print new shares. That, of course, has the effect of "diluting" the EPS (Earnings Per Share). However, early in 2012, Apple both started paying a dividend on shares and initiated a $10 billion, three year buyback program. The share buyback is intended specifically to end the dilution of shares.
Ergo, it makes no sense for Apple to print shares it gives back to itself. That would literally be taking money out of one pocket and putting it in another.
(Note: A "buyback" program that would more than balance options dilution would, in effect, require Apple to buy stock back on the open market at market prices. Some people (myself included), are urging Apple to do just that. We see it as a better "investment" than most alternatives, especially at the present depressed price, since by doing so Apple would in effect be investing in itself. However, there is a body of thought that this sends the wrong message to investors, because usually a stock buyback is done in an attempt to support the stock price. There are even some who say even the moderate stock buyback that Apple has already committed to is responsible for some of the recent decline in Apple stock. I'm inclined to discount that, seeing other forces as being much more likely to be behind the drop. These include: Unreasonably heightened expectation in advance of fy 2012 Q3 earnings; unreasonably lowered expectations in advance of fy 2013 Q1 earnings; a general pulldown on high earning stocks over irrational fears concerning the "fiscal cliff" and related cap gains tax issues; natural stock volatility following Apple's lowest earning quarter (fy 2012 Q4); and irrational fears stirred up by certain "interested parties" concerning things like the "law" of large numbers, advancing competition, and out of proportion attacks over relatively trivial errors like Apple Maps, etcetera.)
Thanks for the reply but I don't think I was clear enough. I was suggesting Apple create new shares but wondering if they could use strategic purchases to buyback shares at the reduced rate the way Al Gore et al. have done.
As for urging Apple it was last year they agreed to buy back $10B hence my comment.
Apple's share price is based on the fact that Apple's profit margins are by far the highest in the industry, especially in the mobile phone and tablet sectors.
The problem is, the market is moving towards hardware being sold at cost or at a loss (products like the galaxy tab which is now outselling iPad are a case in point), and content analytics web traffic being the sole profit source. Until Apple flips to this model and stabilizes revenue streams thereafter, there will be continuing volatility in the stock price.
Do yo have a source for #1 the Galaxy Tab outselling the iPad and #2 it being sold at cost or a loss? I wasn't aware that Samsung sold any of their mobile products for a loss.
boy. this whole thread feels like rehashing a lot of old BS. the trash talk. but Apple will announce great results next week - the story that really counts. but all the bashers and boo-birds and hit whores will just call it the beginning of the end ...
a stock market where Apple is down and Amazon is up is plainly being gamed, and/or is driven by fools. 'nuff said.
what does matter tho looking ahead is that Apple cannot stand still. it does need to keep up with the best features of its competition's products (e.g. add a simple touch UI to OS X for laptops?). and it does need to fill out its product line further (e.g., an iPhone mini?). and it does need to incorporate really useful new technologies (e.g. fingerprint passwords?). and it does need to bring really useful new products to market (e.g. the iOS watch?). and it does need to polish and expand the capabilities of what it has now (e.g., Siri and iCloud).
Apple did pretty good on the above factors in 2012, but not great. a year from now, what will really matter for the long term is how good a job Apple does with them again. can't stand still. and then again in 2014.
everything we saw in 2012 from Apple was initiated while Jobs was still alive. but 2013 will be the first year where much will have been conceived post-Jobs. so it will be the real test of the new Apple leadership team.
Do yo have a source for #1 the Galaxy Tab outselling the iPad and #2 it being sold at cost or a loss? I wasn't aware that Samsung sold any of their mobile products for a loss.
There was one story about Android tablets gaing market share past iPads in Japan.
Sir, with all due respect, that's a defense of the indefensible.
Sorry, if it takes that much to explain a metaphor, the point of using the metaphor is nullified, because not using the metaphor would have been simpler. Think of how a joke isn't funny if it has to be explained.
Not only that, I've not found the metaphor applied to stocks anywhere else.
I only see defending it as defending poor or at least, sub optimal writing.
Thanks for the reply but I don't think I was clear enough. I was suggesting Apple create new shares but wondering if they could use strategic purchases to buyback shares at the reduced rate the way Al Gore et al. have done.
As for urging Apple it was last year they agreed to buy back $10B hence my comment.
Al Gore got the option to buy the shares 10 years back at the then price. That was the strategy. What apple can do now is that they can buy the shares at today's price.
The $10B repurchase is just to nullify dilution they do by issuing new shares.
Comments
Thanks for the reply but I don't think I was clear enough. I was suggesting Apple create new shares but wondering if they could use strategic purchases to buyback shares at the reduced rate the way Al Gore et al. have done.
As for urging Apple it was last year they agreed to buy back $10B hence my comment.
boy. this whole thread feels like rehashing a lot of old BS. the trash talk. but Apple will announce great results next week - the story that really counts. but all the bashers and boo-birds and hit whores will just call it the beginning of the end ...
here's a perfect example of this idiocy:
http://www.telegraph.co.uk/technology/apple/9813464/Sales-concern-to-eclipse-Apple-results.html
a stock market where Apple is down and Amazon is up is plainly being gamed, and/or is driven by fools. 'nuff said.
what does matter tho looking ahead is that Apple cannot stand still. it does need to keep up with the best features of its competition's products (e.g. add a simple touch UI to OS X for laptops?). and it does need to fill out its product line further (e.g., an iPhone mini?). and it does need to incorporate really useful new technologies (e.g. fingerprint passwords?). and it does need to bring really useful new products to market (e.g. the iOS watch?). and it does need to polish and expand the capabilities of what it has now (e.g., Siri and iCloud).
Apple did pretty good on the above factors in 2012, but not great. a year from now, what will really matter for the long term is how good a job Apple does with them again. can't stand still. and then again in 2014.
everything we saw in 2012 from Apple was initiated while Jobs was still alive. but 2013 will be the first year where much will have been conceived post-Jobs. so it will be the real test of the new Apple leadership team.
Quote:
Originally Posted by Rogifan:
Do yo have a source for #1 the Galaxy Tab outselling the iPad and #2 it being sold at cost or a loss? I wasn't aware that Samsung sold any of their mobile products for a loss.
There was one story about Android tablets gaing market share past iPads in Japan.
http://news.cnet.com/8301-13579_3-57564407-37/google-nexus-7-tops-ipad-in-japan-is-this-a-trend/
Keep in mind, this was just in Japan and the study was a survey and not actual shipping numbers.
Quote:
Originally Posted by TheElectricChairRepairman
There was one story about Android tablets gaing market share past iPads in Japan.
http://news.cnet.com/8301-13579_3-57564407-37/google-nexus-7-tops-ipad-in-japan-is-this-a-trend/
Keep in mind, this was just in Japan and the study was a survey and not actual shipping numbers.
And the study seemed to exclude tablet sales at Apple stores.
Sorry, if it takes that much to explain a metaphor, the point of using the metaphor is nullified, because not using the metaphor would have been simpler. Think of how a joke isn't funny if it has to be explained.
Not only that, I've not found the metaphor applied to stocks anywhere else.
I only see defending it as defending poor or at least, sub optimal writing.
Quote:
Originally Posted by SolipsismX
Thanks for the reply but I don't think I was clear enough. I was suggesting Apple create new shares but wondering if they could use strategic purchases to buyback shares at the reduced rate the way Al Gore et al. have done.
As for urging Apple it was last year they agreed to buy back $10B hence my comment.
Al Gore got the option to buy the shares 10 years back at the then price. That was the strategy. What apple can do now is that they can buy the shares at today's price.
The $10B repurchase is just to nullify dilution they do by issuing new shares.