If Apple would borrow about $50 billion to repurchase shares, that would send a message about how they felt about the future (with the delightful side-effect of causing great pain to short-side game players).
The mere announcement of such a plan would have sent bears to run for cover. They have been firmly in control of the stock since they know Tim Cook & friends won't do anything about the share price.
BTW, Apple has more than $137B on hand. Every quarter, they declare an "income tax payable" to provision for foreign profit if and when brought back to America. Of course, they don't bring them back in (yet) so they have a little extra cash. But if they do, the net amount in Apple's bank account would be $137B.
I heard Tim Cook wears a hair piece. He purchased his from the same place Donald Trump did.
Call me crazy, but I wish that Tim Cook was more like Donald Trump sometimes.
I want to see a CEO who has a big mouth and doesn't really care about what other people think. It's not like Wall Street treats Apple fairly anyway, IMO. I'd like to see a CEO of Apple be more forceful and not be worried about insulting those who deserve to be insulted. Steve Jobs wasn't worried about insulting anybody. Tim Cook seems like a nice guy, but maybe he's too nice. I'm just speculating here, I don't know the guy and I've never met him.
If Apple would borrow about $50 billion to repurchase shares, that would send a message about how they felt about the future (with the delightful
side-effect of causing great pain to short-side game players).
Borrow!?
Initiating a dividend already has put it in the value stock column. Taking on that kind of debt will simply shout that out from the rooftops, and confirm that "Apple's growth is behind it" in the market's mind.
I believe interest rates and inflation have bottomed and are heading up, so borrowing long term has some appeal (you know, pay it back with less valuable dollars). Keeping the cash, rather than using it for share
repurchase, communicates that they might have a plan to do something constructive with it. I feel that using
cash on hand for share repurchases is the action that indicates Apple's growth is over.
I have always appreciated Apple's debt free status, but my dislike for the short-side manipulators makes me want Apple to take extreme measures.
cash on hand for share repurchases is the action that indicates Apple's growth is over.
I think you may be -- as others have pointed out -- ignoring the fact that, short of stupid, wasteful acquisitions (which, thank God, Apple has never done) there's nothing remotely that anyone expects Apple to be spending $137B on. Not even counting the rate at which cash continues to pile in every quarter.
What makes you feel that it would signal "Apple's growth is over"? If anything, giving a chunk of it back to the shareholders is probably the best thing Apple could do. It tells the market -- as others have pointed out -- that Apple thinks its shares are significantly undervalued and hence a good investment, and is willing to put its money where its 'think' is.
Call me crazy, but very time I hear Donald Trump, I cringe. It screams "loudmouthed fool" in my head.
When he was having that feud with Rosie O'Donnell, I was definitely rooting for Trump, because even though I am not a huge fan of his, I really can't stand Rosie O'Donnell. And also, I'm from New York, so I tend to like people with big mouths, plus I have a big mouth too, and I'm not afraid to admit it.
If Apple would borrow about $50 billion to repurchase shares, that would send a message about how they felt about the future (with the delightful side-effect of causing great pain to short-side game players).
The mere announcement of such a plan would have sent bears to run for cover. They have been firmly in control of the stock since they know Tim Cook & friends won't do anything about the share price.
BTW, Apple has more than $137B on hand. Every quarter, they declare an "income tax payable" to provision for foreign profit if and when brought back to America. Of course, they don't bring them back in (yet) so they have a little extra cash. But if they do, the net amount in Apple's bank account would be $137B.
I agree. Just the threat of Apple buying billions of dollars of their own stock would be enough to make gaming AAPL much more risky, even if they never did it. The traders would probably move on to work their magic on other companies, and AAPL's volatility would return to something more reasonable.
I wonder if borrowing offshore to repurchase shares at home, and then repaying the loans with offshore cash, would be considered money laundering.:p
When he was having that feud with Rosie O'Donnell, I was definitely rooting for Trump, because even though I am not a huge fan of his, I really can't stand Rosie O'Donnell. And also, I'm from New York, so I tend to like people with big mouths, plus I have a big mouth too, and I'm not afraid to admit it.
Well, you and I can agree on Rosie O'Donnell, for sure.
cash on hand for share repurchases is the action that indicates Apple's growth is over.
I think you may be -- as others have pointed out -- ignoring the fact that, short of stupid, wasteful acquisitions (which, thank God, Apple has never done) there's nothing remotely that anyone expects Apple to be spending $137B on. Not even counting the rate at which cash continues to pile in every quarter.
What makes you feel that it would signal "Apple's growth is over"? If anything, giving a chunk of it back to the shareholders is probably the best thing Apple could do. It tells the market -- as others have pointed out -- that Apple thinks its shares are significantly undervalued and hence a good investment, and is willing to put its money where its 'think' is.
I agree that nobody expects Apple to spend that $137B, but they certainly have been holding on to it very tightly and, every time the cash pile comes up in the earnings calls, they give reasons for wanting to hang on to it. Just because I or others cannot conceive of what they are planning, doesn't mean they aren't planning something. They have surprised the world on several occasions. The money coming in every quarter could be used to repay debt, while keeping the cash pile at a steady level, rather than increasing to ludicrous levels.
WIth regard to returning cash to shareholders, I expect that the dividend will gradually be increased (maybe annually). Companies routinely manage dividends, share repurchases, debt service, and capital spending, while keeping cash reserves in equilibrium. Thats what the financial officers get paid for.
If Apple thinks its shares are a good investment, that would be true whether they invested cash on hand or borrowed cash. Of the two options, spending cash on hand seems to me the greater admission of lack of expectation of growth.
Apple has plenty of cash to do all the new product development that their company can handle. Buying back shares has absolutely no impact on the product line,.
The purpose of a stock buy-back is when a company believes that its stock is so undervalued that the return on buying back its own stock is greater than the return on other things it could do with the money. That appears to be true for AAPL.
Let's try that again. Quote is a nice feature. ;-)
Share buyback is a gimmick for companies with a troubled pipeline but still strong cash reserves, IMO. Long term value is grown by building a company's product line and hiring great people, not using financial firecrackers.
I am here to learn: please cite 5 proven examples where share price of a example climbed significantly and stayed at that level for good entirely because of share buyback. I am all ears/eyes.
The results show that initiation announcements of open market share repurchase programs exhibit a two-day abnormal return of approximately 2%. The price impact on the actual repurchase days is positively correlated with the daily repurchase volume, and is both statistically and economically significant during the first 3 repurchase days in a repurchase program. The long-run abnormal stock performance is positively associated with the fraction of shares bought in the program and is approximately 7% the first year following the initiation announcement. The results indicate that repurchase trading provides price support and that the market participants detect and perceive the repurchase announcement and the first repurchase days in a repurchase program as a signal of undervaluation. The long-run abnormal stock performance found in the study is consistent with the results found in prior studies.
Not to mention, of course, simple supply and demand. For any given level of demand, when the supply is lower, the price goes up.
Now, there are exceptions, but most of the exceptions are companies that are failing. Dell, for example, did not increase in share price when they repurchased shares (although there is some evidence that the rate of decline did slow). But for a healthy company, buybacks will almost always increase share price.
The issue about the number of shares is a poor excuse by Chowdhry. Apple could have issued EARNINGS guidance without EPS guidance. In other words, they could have guided how much money they expected to earn without dividing that number by the outstanding shares.
I am here to learn: please cite 5 proven examples where share price of a example climbed significantly and stayed at that level for good entirely because of share buyback. I am all ears/eyes.
Why would the share price increase due to the buyback? The company is using is money to invest in itself. The fact that the money was there with the company is already factored in the pre-buyback price. View it like when you own a share you own a % of the company + % of cash. After the buyback you own greater % of the company but the cash is gone/reduced (Net gain/loss = 0). The sentiment of the market however may change due to the announcement.
So why the buyback? Because if apple believes that it is undervalued, it is a good opportunity to invest just like we invest in a company if we feel a company is undervalued.
Share buyback is a gimmick for companies with a troubled pipeline but still strong cash reserves, IMO. Long term value is grown by building a company's product line and hiring great people, not using financial firecrackers.
Maybe, but when Jobs was still at Apple and before the IPhone, Jobs initiated an Apple stock buy back. He said he thought the stock was a good investment.
[" url="/t/155656/apple-drops-earnings-per-share-guidance-because-outstanding-shares-are-in-flux/30#post_2265710"]
Call me crazy, but I wish that Tim Cook was more like Donald Trump sometimes.
I want to see a CEO who has a big mouth and doesn't really care about what other people think. It's not like Wall Street treats Apple fairly anyway, IMO. I'd like to see a CEO of Apple be more forceful and not be worried about insulting those who deserve to be insulted. Steve Jobs wasn't worried about insulting anybody. Tim Cook seems like a nice guy, but maybe he's too nice. I'm just speculating here, I don't know the guy and I've never met him.
The difference between Jobs and Trump is Jobs actually had a brain. Further, Jobs was never spouting stuff just to spout stuff.
Why would the share price increase due to the buyback? The company is using is money to invest in itself. The fact that the money was there with the company is already factored in the pre-buyback price. View it like when you own a share you own a % of the company + % of cash. After the buyback you own greater % of the company but the cash is gone/reduced (Net gain/loss = 0). The sentiment of the market however may change due to the announcement.
That's vastly oversimplified - particularly when considering a company which is growing and whose cash reserves are growing.
History shows that stock repurchases generally increase the share price (see my post earlier for links).
Hmm, Apple has the best quarter in its history yet Wall Street has tanked its stock. The SEC needs to get on this ASAP. It makes no effing conceptual sense to me. I see fraud. I see millions lost by investors who bought at the top stock price then pulled out the shot gun in the shed along with a hand written note saying to the family "I'M SORRY".
Comments
Quote:
If Apple would borrow about $50 billion to repurchase shares, that would send a message about how they felt about the future (with the delightful side-effect of causing great pain to short-side game players).
The mere announcement of such a plan would have sent bears to run for cover. They have been firmly in control of the stock since they know Tim Cook & friends won't do anything about the share price.
BTW, Apple has more than $137B on hand. Every quarter, they declare an "income tax payable" to provision for foreign profit if and when brought back to America. Of course, they don't bring them back in (yet) so they have a little extra cash. But if they do, the net amount in Apple's bank account would be $137B.
Quote:
Originally Posted by JollyPaul
I heard Tim Cook wears a hair piece. He purchased his from the same place Donald Trump did.
Call me crazy, but I wish that Tim Cook was more like Donald Trump sometimes.
I want to see a CEO who has a big mouth and doesn't really care about what other people think. It's not like Wall Street treats Apple fairly anyway, IMO. I'd like to see a CEO of Apple be more forceful and not be worried about insulting those who deserve to be insulted. Steve Jobs wasn't worried about insulting anybody. Tim Cook seems like a nice guy, but maybe he's too nice. I'm just speculating here, I don't know the guy and I've never met him.
I believe interest rates and inflation have bottomed and are heading up, so borrowing long term has some appeal (you know, pay it back with less valuable dollars). Keeping the cash, rather than using it for share
repurchase, communicates that they might have a plan to do something constructive with it. I feel that using
cash on hand for share repurchases is the action that indicates Apple's growth is over.
I have always appreciated Apple's debt free status, but my dislike for the short-side manipulators makes me want Apple to take extreme measures.
Quote:
Originally Posted by Apple ][
Call me crazy, but I wish that Tim Cook was more like Donald Trump sometimes.
Call me crazy, but very time I hear Donald Trump, I cringe. It screams "loudmouthed fool" in my head.
Quote:
Originally Posted by quinney
I feel that using
cash on hand for share repurchases is the action that indicates Apple's growth is over.
I think you may be -- as others have pointed out -- ignoring the fact that, short of stupid, wasteful acquisitions (which, thank God, Apple has never done) there's nothing remotely that anyone expects Apple to be spending $137B on. Not even counting the rate at which cash continues to pile in every quarter.
What makes you feel that it would signal "Apple's growth is over"? If anything, giving a chunk of it back to the shareholders is probably the best thing Apple could do. It tells the market -- as others have pointed out -- that Apple thinks its shares are significantly undervalued and hence a good investment, and is willing to put its money where its 'think' is.
Quote:
Originally Posted by anantksundaram
Call me crazy, but very time I hear Donald Trump, I cringe. It screams "loudmouthed fool" in my head.
When he was having that feud with Rosie O'Donnell, I was definitely rooting for Trump, because even though I am not a huge fan of his, I really can't stand Rosie O'Donnell. And also, I'm from New York, so I tend to like people with big mouths, plus I have a big mouth too, and I'm not afraid to admit it.
I agree. Just the threat of Apple buying billions of dollars of their own stock would be enough to make gaming AAPL much more risky, even if they never did it. The traders would probably move on to work their magic on other companies, and AAPL's volatility would return to something more reasonable.
I wonder if borrowing offshore to repurchase shares at home, and then repaying the loans with offshore cash, would be considered money laundering.:p
Quote:
Originally Posted by Apple ][
When he was having that feud with Rosie O'Donnell, I was definitely rooting for Trump, because even though I am not a huge fan of his, I really can't stand Rosie O'Donnell. And also, I'm from New York, so I tend to like people with big mouths, plus I have a big mouth too, and I'm not afraid to admit it.
Well, you and I can agree on Rosie O'Donnell, for sure.
I agree that nobody expects Apple to spend that $137B, but they certainly have been holding on to it very tightly and, every time the cash pile comes up in the earnings calls, they give reasons for wanting to hang on to it. Just because I or others cannot conceive of what they are planning, doesn't mean they aren't planning something. They have surprised the world on several occasions. The money coming in every quarter could be used to repay debt, while keeping the cash pile at a steady level, rather than increasing to ludicrous levels.
WIth regard to returning cash to shareholders, I expect that the dividend will gradually be increased (maybe annually). Companies routinely manage dividends, share repurchases, debt service, and capital spending, while keeping cash reserves in equilibrium. Thats what the financial officers get paid for.
If Apple thinks its shares are a good investment, that would be true whether they invested cash on hand or borrowed cash. Of the two options, spending cash on hand seems to me the greater admission of lack of expectation of growth.
Amen - hit it on the nose.
Quote:
Originally Posted by jragosta
That's ridiculous.
Apple has plenty of cash to do all the new product development that their company can handle. Buying back shares has absolutely no impact on the product line,.
The purpose of a stock buy-back is when a company believes that its stock is so undervalued that the return on buying back its own stock is greater than the return on other things it could do with the money. That appears to be true for AAPL.
Let's try that again. Quote is a nice feature. ;-)
Amen - hit it on the nose.
Maybe it was a different stelligent who said:
Just how the heck else could that be interpreted?
http://wiki.fool.com/Does_a_Stock_Buyback_Affect_the_Price?
"A stock buyback usually pushes up the price,"
http://www.investopedia.com/exam-guide/cfa-level-1/corporate-finance/stock-dividends-repurchases.asp
"A stock repurchase typically has the effect of increasing the price of a stock."
http://www.theoptionsguide.com/stock-repurchase.aspx
"the act of reducing the number of available shares in the market should cause the stock price to rise as basic law of supply and demand would suggest."
And, for academic research:
http://www.nasdaqomx.com/digitalAssets/76/76006_thepriceimpactofopenmarketsharerepurchases.pdf
Not to mention, of course, simple supply and demand. For any given level of demand, when the supply is lower, the price goes up.
Now, there are exceptions, but most of the exceptions are companies that are failing. Dell, for example, did not increase in share price when they repurchased shares (although there is some evidence that the rate of decline did slow). But for a healthy company, buybacks will almost always increase share price.
Quote:
Originally Posted by anantksundaram
My recommendation would be well north of that. Go nuclear.
They would have to borrow money or pay huge taxes first. Only the US cash can be used towards buyback/ dividends.
It did.
Quote:
Originally Posted by stelligent
Ah yes, as opposed to a real expert like you.
I am here to learn: please cite 5 proven examples where share price of a example climbed significantly and stayed at that level for good entirely because of share buyback. I am all ears/eyes.
Why would the share price increase due to the buyback? The company is using is money to invest in itself. The fact that the money was there with the company is already factored in the pre-buyback price. View it like when you own a share you own a % of the company + % of cash. After the buyback you own greater % of the company but the cash is gone/reduced (Net gain/loss = 0). The sentiment of the market however may change due to the announcement.
So why the buyback? Because if apple believes that it is undervalued, it is a good opportunity to invest just like we invest in a company if we feel a company is undervalued.
Maybe, but when Jobs was still at Apple and before the IPhone, Jobs initiated an Apple stock buy back. He said he thought the stock was a good investment.
The difference between Jobs and Trump is Jobs actually had a brain. Further, Jobs was never spouting stuff just to spout stuff.
Quote:
Originally Posted by arch
They would have to borrow money or pay huge taxes first. Only the US cash can be used towards buyback/ dividends.
No, they won't. Take a moment to read the thread before jumping to post.
That's vastly oversimplified - particularly when considering a company which is growing and whose cash reserves are growing.
History shows that stock repurchases generally increase the share price (see my post earlier for links).
I see fraud. I see millions lost by investors who bought at the top stock price then pulled out the shot gun in the shed along with a hand written note saying to the family "I'M SORRY".