Terrific news for AAPL longs. About time a brilliant investor and hedge fund titan like Einhorn step in and open the eyes of the InCompetence in Cupertino. Enough destruction of shareholder value, Apple's image and its public perception, and it only took several months late.
The next step is to strike the Samdung dogs back, and start being the leader in innovating again. David Einhorn for special advisor to Tim Cook!
The reason why this stock has been plummeting is because the bus was over levered, over crowded with hedge funds who thought AAPL would continue to innovate and keep their massive profit margins. Well the street doubts AAPL's ability to innovate in the near-med term until it proves itself again, competition has clearly caught up, and hedge funds scrambled to get out at the same time. That's not manipulation.
So AAPL's margins are shrinking fast, demand is flattening, innovation is in question so why would any hedge fund want to pour any more money into this broken stock when so many hedgies are still invested in it already?
This was a growth stock, not anymore and the street has voted.
To anyone who still believes that the lower profit margins are due to "competition has caught up" or "flattening demand" I would strongly suggest reading http://www.asymco.com/2013/02/05/margin-call/
The reason why this stock has been plummeting is because the bus was over levered, over crowded with hedge funds who thought AAPL would continue to innovate and keep their massive profit margins. Well the street doubts AAPL's ability to innovate in the near-med term until it proves itself again, competition has clearly caught up, and hedge funds scrambled to get out at the same time. That's not manipulation.
So AAPL's margins are shrinking fast, demand is flattening, innovation is in question so why would any hedge fund want to pour any more money into this broken stock when so many hedgies are still invested in it already?
This was a growth stock, not anymore and the street has voted.
To anyone who still believes that the lower profit margins were due to "competition catching up" or "flattening demand", I would strongly suggest reading Horace Dediu's analysis "Margin Call": http://www.asymco.com/2013/02/05/margin-call/
OK, two questions from a normal person who doesn't understand this financial stuff:
1) What is Einhorn's end-game? Is he just trying to make more money for his fund? And does his argument make sense?
2) Why is Apple having so many billions a bad thing? That would seem like a good thing.
Thank you, in advance.
1) Unclear at this point, on one hand he seems to be the de facto spokesperson for shareholders (self appointed) otoh he has launched a lawsuit with his own company Greenlight.
Yep.
Nope IMO - but I can see Apple taking it on board. They do want to listen to shareholders.
1) Unclear at this point, on one hand he seems to be the de facto spokesperson for shareholders (self appointed) otoh he has launched a lawsuit with his own company Greenlight.
[quote] 2) Not a bad thing. A very good thing. [/quote] It is a very good thing if you want the company to not be beholden to anybody else. It is a good thing if it is accurately reflected in the stock price.
It starts to be a bad thing when investors don't see it as a source of value, especially when that trend accelerates with a declining PE and increasing cash horde.
It is a very good thing if you want the company to not be beholden to anybody else. It is a good thing if it is accurately reflected in the stock price.
It starts to be a bad thing when investors don't see it as a source of value, especially when that trend accelerates with a declining PE and increasing cash horde.
True. I think that Apple have likely thought this through by now (hell there has been enough noise about it) and will begin to address stockholder concerns Feb 27.
Let it come to a head at the meeting and deal with it quickly thereafter. IMO they're playing it the right way. Some short term pain for some, sure. Long term fundamentals are good.
No they don't. Shareholders expect profits at any cost so running the company into the ground for short term profit would suit them just fine. To hell with running it "well." That would mean looking to the future at the possible expense of profits and we can't have that can we. Gimme that money now¡
Ahhh, the HP way of doing things! See where it got them!!
What I read about preferred stock... is there something about a proposal for preferred stocks that's not absolutely reprehensible? It seems like a way to create a second tier of stock that (1) presumably I won't be owning and (2) gets more bang for the buck than my stock. How is that okay? If Apple wants to give money back, great. Dividends, you bet. But don't argue for separate but unequal avenues.
I don't consider myself a moron and I don't want them to raise the dividend. I think they actually do have plans for that cash and self-serving lawsuits by suspect investors to goad Apple into acting in a manner that is not beneficial to the company should be squashed.
Just so I'm clear you realize that increasing the dividend wont impact the current reserve and will only slightly slow down how fast it increases, but you still don't want them to increase the dividend because they might want to...what? buy a small country? Exxon? Increasing the dividend is the only thing that makes sense and is in no way detrimental to the company in any meaningful way.
It is a very good thing if you want the company to not be beholden to anybody else. It is a good thing if it is accurately reflected in the stock price.
It starts to be a bad thing when investors don't see it as a source of value, especially when that trend accelerates with a declining PE and increasing cash horde.
This is what I don't understand.
It means that Apple is free to do what it wants. All that money means that if, say, they want to buy a company with resources, they can. If they want to buy patents, they can. If they want to do anything, they can.
I don't understand how having money is a bad thing.
The problem for Apple is the SIZE of the cash reserve. People are inherently greedy - they see that and want some of it. Given the amount of economic pain worldwide their greed or need for money is understandable.
What is laughable is Einhorns self appointed spokesman role. FO - long term AAPL investor with a history shorting stock.
If I had the misfortune of having money tied up with Greenlight I'd be bailing out of there faster than you could say, "Lemming". Actions like this from a middleman do nothing other than reveal them for what they are. This punk looks like he's been silver spoon fed from day one.
That said there are some positives to his character - see his wiki David Einhorn. You can only afford to be magnanimous when you've got heaps already though. lol
Apple navigated and developed its way into this position - Given their history I would trust their BOD over and above 99.9% of the other corporates out there to do the best for the company and shareholders.
Thanks for pointing to his [URL=http://en.wikipedia.org/wiki/David_Einhorn_(hedge_fund_manager)]wiki page[/URL], [B]RobM[/B]. Bit of a two faced character, this guy. He donated often, but at the same time makes money of the misery of others. Interesting read, his wiki.
Yea - sorry - i would have posted the link but my ipad was on about 1 and I couldnt risk searching without my lofty words of wisdom being lost forever. lol
It means that Apple is free to do what it wants. All that money means that if, say, they want to buy a company with resources, they can. If they want to buy patents, they can. If they want to do anything, they can.
I don't understand how having money is a bad thing.
It isn't. It's just a matter of a few shareholders who are never happy no matter what Apple does. Their argument is silly because if they want to do something with the accumulated cash, they can sell some of their shares and pay capital gains tax rates rather than income tax rates (historically, capital gains rates have been lower). The end result is the same, at least to the extent that the cash is reflected in the share value.
I don't think issuing perpetual preferred stock is in the best interest of the company. Adding a preferred stock would just lower the value of the common stock anyways. I think Apple wants to see itself at a $1000 stock price, probably a reason they haven't issued a stock split. The best thing Apple should do is to buyback more shares. Issuing a buyback will lowers the total number of outstanding shares; lowering supply and increasing demand for the stock. If they believe in their company and how undervalued it is right now, then issuing a large buyback would be the best way to convince investors.
I don't think issuing perpetual preferred stock is in the best interest of the company. Adding a preferred stock would just lower the value of the common stock anyways. I think Apple wants to see itself at a $1000 stock price, probably a reason they haven't issued a stock split. The best thing Apple should do is to buyback more shares. Issuing a buyback will lowers the total number of outstanding shares; lowering supply and increasing demand for the stock. If they believe in their company and how undervalued it is right now, then issuing a large buyback would be the best way to convince investors.
I don't think issuing perpetual preferred stock is in the best interest of the company. Adding a preferred stock would just lower the value of the common stock anyways. I think Apple wants to see itself at a $1000 stock price, probably a reason they haven't issued a stock split. The best thing Apple should do is to buyback more shares. Issuing a buyback will lowers the total number of outstanding shares; lowering supply and increasing demand for the stock. If they believe in their company and how undervalued it is right now, then issuing a large buyback would be the best way to convince investors.
Comments
Quote:
Originally Posted by mrr
So how does this impact existing Apple stock holders?
Shareholders meeting Feb 27 - there's a couple or three things to be decided there.
They prolly will kick around some options that come out of that at BOD level - then make a statement.
I dunno. - within a month it should be pretty clear what the result will be.
You must be an Analyst, clueless and crooked.
To anyone who still believes that the lower profit margins are due to "competition has caught up" or "flattening demand" I would strongly suggest reading
http://www.asymco.com/2013/02/05/margin-call/
Quote:
Originally Posted by KingChael
The reason why this stock has been plummeting is because the bus was over levered, over crowded with hedge funds who thought AAPL would continue to innovate and keep their massive profit margins. Well the street doubts AAPL's ability to innovate in the near-med term until it proves itself again, competition has clearly caught up, and hedge funds scrambled to get out at the same time. That's not manipulation.
So AAPL's margins are shrinking fast, demand is flattening, innovation is in question so why would any hedge fund want to pour any more money into this broken stock when so many hedgies are still invested in it already?
This was a growth stock, not anymore and the street has voted.
To anyone who still believes that the lower profit margins were due to "competition catching up" or "flattening demand", I would strongly suggest reading Horace Dediu's analysis "Margin Call": http://www.asymco.com/2013/02/05/margin-call/
OK, two questions from a normal person who doesn't understand this financial stuff:
1) What is Einhorn's end-game? Is he just trying to make more money for his fund? And does his argument make sense?
2) Why is Apple having so many billions a bad thing? That would seem like a good thing.
Thank you, in advance.
Quote:
Originally Posted by AaronJ
OK, two questions from a normal person who doesn't understand this financial stuff:
1) What is Einhorn's end-game? Is he just trying to make more money for his fund? And does his argument make sense?
2) Why is Apple having so many billions a bad thing? That would seem like a good thing.
Thank you, in advance.
1) Unclear at this point, on one hand he seems to be the de facto spokesperson for shareholders (self appointed) otoh he has launched a lawsuit with his own company Greenlight.
Yep.
Nope IMO - but I can see Apple taking it on board. They do want to listen to shareholders.
2) Not a bad thing. A very good thing.
Quote:
Originally Posted by RobM
1) Unclear at this point, on one hand he seems to be the de facto spokesperson for shareholders (self appointed) otoh he has launched a lawsuit with his own company Greenlight.
Yep.
Nope.
2) Not a bad thing. A very good thing.
Thank you.
2) Not a bad thing. A very good thing.
[/quote]
It is a very good thing if you want the company to not be beholden to anybody else. It is a good thing if it is accurately reflected in the stock price.
It starts to be a bad thing when investors don't see it as a source of value, especially when that trend accelerates with a declining PE and increasing cash horde.
Quote:
Originally Posted by aaarrrgggh
It is a very good thing if you want the company to not be beholden to anybody else. It is a good thing if it is accurately reflected in the stock price.
It starts to be a bad thing when investors don't see it as a source of value, especially when that trend accelerates with a declining PE and increasing cash horde.
True. I think that Apple have likely thought this through by now (hell there has been enough noise about it) and will begin to address stockholder concerns Feb 27.
Let it come to a head at the meeting and deal with it quickly thereafter. IMO they're playing it the right way. Some short term pain for some, sure. Long term fundamentals are good.
Quote:
Originally Posted by lkrupp
No they don't. Shareholders expect profits at any cost so running the company into the ground for short term profit would suit them just fine. To hell with running it "well." That would mean looking to the future at the possible expense of profits and we can't have that can we. Gimme that money now¡
Ahhh, the HP way of doing things! See where it got them!!
Quote:
Originally Posted by SpamSandwich
I don't consider myself a moron and I don't want them to raise the dividend. I think they actually do have plans for that cash and self-serving lawsuits by suspect investors to goad Apple into acting in a manner that is not beneficial to the company should be squashed.
Just so I'm clear you realize that increasing the dividend wont impact the current reserve and will only slightly slow down how fast it increases, but you still don't want them to increase the dividend because they might want to...what? buy a small country? Exxon? Increasing the dividend is the only thing that makes sense and is in no way detrimental to the company in any meaningful way.
Quote:
Originally Posted by aaarrrgggh
It is a very good thing if you want the company to not be beholden to anybody else. It is a good thing if it is accurately reflected in the stock price.
It starts to be a bad thing when investors don't see it as a source of value, especially when that trend accelerates with a declining PE and increasing cash horde.
This is what I don't understand.
It means that Apple is free to do what it wants. All that money means that if, say, they want to buy a company with resources, they can. If they want to buy patents, they can. If they want to do anything, they can.
I don't understand how having money is a bad thing.
The problem for Apple is the SIZE of the cash reserve. People are inherently greedy - they see that and want some of it. Given the amount of economic pain worldwide their greed or need for money is understandable.
What is laughable is Einhorns self appointed spokesman role. FO - long term AAPL investor with a history shorting stock.
If I had the misfortune of having money tied up with Greenlight I'd be bailing out of there faster than you could say, "Lemming". Actions like this from a middleman do nothing other than reveal them for what they are. This punk looks like he's been silver spoon fed from day one.
That said there are some positives to his character - see his wiki David Einhorn. You can only afford to be magnanimous when you've got heaps already though. lol
Apple navigated and developed its way into this position - Given their history I would trust their BOD over and above 99.9% of the other corporates out there to do the best for the company and shareholders.
Yea - sorry - i would have posted the link but my ipad was on about 1 and I couldnt risk searching without my lofty words of wisdom being lost forever. lol
It isn't. It's just a matter of a few shareholders who are never happy no matter what Apple does. Their argument is silly because if they want to do something with the accumulated cash, they can sell some of their shares and pay capital gains tax rates rather than income tax rates (historically, capital gains rates have been lower). The end result is the same, at least to the extent that the cash is reflected in the share value.
I don't think issuing perpetual preferred stock is in the best interest of the company. Adding a preferred stock would just lower the value of the common stock anyways. I think Apple wants to see itself at a $1000 stock price, probably a reason they haven't issued a stock split. The best thing Apple should do is to buyback more shares. Issuing a buyback will lowers the total number of outstanding shares; lowering supply and increasing demand for the stock. If they believe in their company and how undervalued it is right now, then issuing a large buyback would be the best way to convince investors.