Preferred stock seen as Apple's chance to 'seize the opportunity' and reverse losses

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  • Reply 41 of 81
    igrivigriv Posts: 1,177member


    Originally Posted by robogobo View Post

    Hogwash. The value of tech stock in particular has nothing to do with a company's performance or dividends. I'd go further to say the any publicly traded company is foolish to issue dividends since the market is dominated by day traders and hedge funds, so what's the point? Why should Apple give away money to people who otherwise dump their stock and therefore undermine the value when the company has record quarters? It's better saved to invest in other areas that directly benefit future success, and any investor who really trades on their success would agree.


     


    The people you think Apple should not give away money to ARE THE PEOPLE WHO OWN THE COMPANY. Most of these people are actual people, since a lot of AAPL is owned by pension funds (check how much CALPERS owns, why don't you?) and these people want some benefit from owning this asset, be it a higher share price or a dividend. This is their right. If you don't want the public to own the company, that's easy: go private. Apple, given its cash position, could engineer a deal to go private (though half a trillion dollars is a lot of cabbage), but I think they actually LIKE being public, which means, being owned by the public.

  • Reply 42 of 81
    igrivigriv Posts: 1,177member

    Quote:

    Originally Posted by dmarcoot View Post



    I see it as an opportunity to for Einhorn to seize Apple cash for his rich customers from share holders such as myself.


    Einhorn's proposal is that ALL common stock holders would have a part of their holding converted to preferred. How does this hurt you?

  • Reply 43 of 81
    lkrupplkrupp Posts: 6,789member

    Quote:

    Originally Posted by bwik View Post


    Watch men who create nothing froth at the mouth for Apple's worth and credibility.  Apple was originally run by a man who created things.  That is what creates true wealth and value.  You can engineer Apple's balance sheet to hell and back and it won't add one cent of fundamental value.  MBAs should be running pencil factories and selling breakfast cereal.  Apple's business model is anti-MBA and that has been the source of its value.  Watching Apple end that innovative run is a little sad.



     


    Apple already had a MBA sugar water salesman at the helm and we all know how that turned out. Biggest mistake Jobs ever made.

  • Reply 44 of 81
    igrivigriv Posts: 1,177member

    Quote:

    Originally Posted by zoffdino View Post


    Post hoc ergo propter hocApple announced the dividends in March 2012, paid the first one in July and, climbed to $700 in September, and crashed to $450 where it is now. And the dividend is responsible for the crash?


     


    You cannot begin to understand the frustration of being an Apple shareholder. The company is being bashed on the daily basis, which I frankly question: “what’s wrong?” Yesterday there was a rumor of Foxconn hiring freeze, which was quickly translated to Apple cutting production for iPhone 5 due to slow demand. Even after it was clarified by another Foxconn PR person that it was due to better than expected employee retention rate, the stock still performed badly.


     


    What’s more frustrating is Apple’s management denial that there is a problem with the shareprice. Time after time, Tim Cook said that he wants to focus on delivering great products; Wall Street will follow later. What he fails to recognize is Apple the brand is being tarnished, it’s being ridiculed as not cool enough, that users are abandoning it. Steve Jobs hated Wall Street and would have done the same, but he would have defended the brand to his last breath. Tim Cook and the Board of Director have so far come across as arrogant and oblivious to shareholder concerns. After all, they don’t own the business, the shareholders do.


     


    If you own a business with a fortress-like balance sheet, large pile of cash, strong brand recognition, but you are refused a loan at the bank because concerns over growth or competitors eating up your lunch, how would you feel?



     


    If you believe that you have made a good investment, don't worry, be happy. This is the Buffett (and to some extent Jobs) philosophy: in the long-term, the chickens will come home to roost, if you run the business well. What Einhorn is saying (correctly) is this: Apple has  $140BN in cash, which is collecting money market interest (0.1%) The Fed is engineering 2.5% a year price inflation, so by keeping the money in a sock Apple is losing its shareholders $4BN a year (a tenth of its actual profit -- quite nontrivial).

  • Reply 45 of 81
    flaneurflaneur Posts: 4,509member
    zoffdino wrote: »
    You cannot begin to understand the frustration of being an Apple shareholder. The company is being bashed on the daily basis, which I frankly question: “what’s wrong?” Yesterday there was a rumor of Foxconn hiring freeze, which was quickly translated to Apple cutting production for iPhone 5 due to slow demand. Even after it was clarified by another Foxconn PR person that it was due to better than expected employee retention rate, the stock still performed badly.

    What’s more frustrating is Apple’s management denial that there is a problem with the shareprice. Time after time, Tim Cook said that he wants to focus on delivering great products; Wall Street will follow later. What he fails to recognize is Apple the brand is being tarnished, it’s being ridiculed as not cool enough, that users are abandoning it. Steve Jobs hated Wall Street and would have done the same, but he would have defended the brand to his last breath. Tim Cook and the Board of Director have so far come across as arrogant and oblivious to shareholder concerns. After all, they don’t own the business, the shareholders do.


    Tim Cook has been out stumping for Apple iin a backhanded way, which is maybe the only way he can do anything without lowering himself and the company to the level of the insane anti-Apple meme-mongers. Check out this collection from the pages of AI:

    http://appleinsider.com/topics/tim_cook

    I'm sure they're working hard to figure out how to counter this trend. They lost a lot of good will by going after Samsung and HTC. Maybe they had to do it, to set a legal price for Samsung's level of copying, but it was damaging to their tech press cred, seems to me.

    The legal messes seem to be ending. Now how else could they fight bad PR without looking weak and defensive?
  • Reply 46 of 81


    Originally Posted by mvigod View Post

    Apple knows it needs all that money to survive the coming competition and margin compression


     


    Go away.


     



    Originally Posted by jrogowsk View Post

    I urge Apple management to pay attention to the mistakes of other firms in Silicon Valley, such as HPQ.


     


    I urge Apple management to ignore everything done by everyone and keep doing what they're doing now.

  • Reply 47 of 81
    igrivigriv Posts: 1,177member

    Quote:

    Originally Posted by lkrupp View Post


     


    Apple already had a MBA sugar water salesman at the helm and we all know how that turned out. Biggest mistake Jobs ever made.



     


    Notice that (a) Jobs hired him, not the money guys (Markkula) and (b) for several years, Sculley was very successful.

  • Reply 48 of 81
    apple ][apple ][ Posts: 8,431member


    Count me in as one of the greedy people!


     


    I was against the whole dividend payout to begin with. I said at the time that Apple should either offer a larger dividend or no dividend at all. I heard all of these stories about how hedgefunds and institutions would now love Apple because of the dividend, and it seems like the exact opposite turned out to be true. I also heard these stories about how certain funds were not allowed to hold a stock that didn't pay out a dividend, and tons more funds would be buying up AAPL because of the dividend. A whole lot of good that dividend has done right? AAPL has gone south since the dividend, and we now see articles about how hedgefunds are actually pulling out of AAPL and minimizing their holdings.


     


    So, I wouldn't mind a larger payout, bring it on. Either that, or Apple should do a large buyback of shares. Why isn't Apple investing in itself at this ridiculous cheap share price?

  • Reply 49 of 81
    Apple doesn't need to "reverse losses", because it hasn't had any losses. Apple's stock has lost value, but the company has not lost money. In fact, Apple remains extremely profitable. What's happened is there is a disconnect between Apple's financial performance, which by any object measurement has remained stellar, and Wall Street's inflated expectations.

    What Apple needs to do more than anything else is innovate. All of their major product segments are rapidly approaching saturation, meaning that going forward a higher percentage of people will only be buying an Apple product when they feel it's time to upgrade. Unfortunately, that's not going to keep Apple's profits flying high. They need to invent new insanely great products that will define new product categories, like the iPad did with the tablet segment. Apple didn't invent the tablet, but the iPad transformed it into something huge.

    Apple needs to do that again and surprise us with something we didn't know we needed until they gave it to us. Steve Jobs understood that. Now that he's gone, Apple's current management needs to understand it, too.
  • Reply 50 of 81

    Quote:

    Originally Posted by jragosta View Post





    This is all stupid. Apple doesn't need two classes of stock - that's just a way to favor big shareholders over small ones. In fact, I would argue that Apple suffers partly because institutions control so much of their stock. They'd be better off by making it easier for small shareholders to own the stock - by splitting the stock.


     


    Bingo. That's what the issue really is. Destroying the preferred class of shareholders, of which Einhorn's a member. Apple wants shareholders that are in this to support Apple, not to make easy money. And yet they aren't destroying the whole preferred shares outright, just saying they want that call to go to the full class of shareholders. Let them decide if a few of their own get special treatment or not. Rather than the Board,who might also benefit by way of having invested in some of these funds, decide without override to benefit such groups as special 


     


    If  Einhorn was really in this to benefit shareholders and not just himself he would have been screaming for a split when the stock was $700+, higher dividends for all shares etc.


     


    and I'm not shocked that White would jump on this or in this way. My only questions are if he's invested in this same fund, or giving guidance on it or was he asked to comment on this issue to his investors by Einhorn.

  • Reply 51 of 81
    igrivigriv Posts: 1,177member

    Quote:

    Originally Posted by popnfresh View Post



    Apple doesn't need to "reverse losses", because it hasn't had any losses. Apple's stock has lost value, but the company has not lost money. In fact, Apple remains extremely profitable. What's happened is there is a disconnect between Apple's financial performance, which by any object measurement has remained stellar, and Wall Street's inflated expectations.



    What Apple needs to do more than anything else is innovate. All of their major product segments are rapidly approaching saturation, meaning that going forward a higher percentage of people will only be buying an Apple product when they feel it's time to upgrade. Unfortunately, that's not going to keep Apple's profits flying high. They need to invent new insanely great products that will define new product categories, like the iPad did with the tablet segment. Apple didn't invent the tablet, but the iPad transformed it into something huge.



    Apple needs to do that again and surprise us with something we didn't know we needed until they gave it to us. Steve Jobs understood that. Now that he's gone, Apple's current management needs to understand it, too.


    If you own AAPL, and you need to buy a house, or take a vacation, or retire comfortably, then Apple stock needs to reverse its losses. If you are willing to wait for five years for the next insanely great product, you are in a different position, and can take comfort from how great Apple looks on paper.

  • Reply 52 of 81

    Quote:

    Originally Posted by tomnryan View Post


    Apple owes Wall Street nothing. During the last few weeks they've been cashing in and turning their backs on Apple. Screw them.


     


    Apple should spend their money on building a spaceship. Not a new HQ that looks like a space ship, I mean an actual spaceship. We've all seen 2001: A Space Odyssey. We're already 12 years behind...



     


    You've got it wrong. They shouldn't spend, they need to keep saving it up. So they can buy the government. Apple is Sautech. 

  • Reply 53 of 81
    Declarations that Apple's >$400 share price is "low", referring to their position as needing to recover from "losses", all of these negative "Apple is in trouble" kind of perspectives, all completely redirecting from the fact that Apple is in an extraordinarily healthy state, and in rarefied and unseen territory as a company, and shows few signs of abating...

    Yes, relative to the price some months ago, relative to standard earnings multipliers, etc%u2026 the SHARE price is down, and probably below where it should be.

    The price was CLEARLY manipulated into this position by carefully placed and timed negative "analyses" tied to large-scale buy/sell cycles. A group of funds sold off large amounts of stock almost in lockstep, while at the same time specious articles quoting 'analysts' predicting 'problems for Apple' (that don't actually exist - like the declared 'sudden free-fall of demand for iPhone based on%u2026' shifting supply orders?), were injecting FUD into the marketplace%u2026

    These guys made a killing in the process. I would look into Einhorn's longer term movement with regard to Apple. Analyze his buy/sell cycles in coordination with these analyst releases%u2026 is he manipulating the stock for his own gain? I would mark him as suspect.

    They're lucky I'm not with the SEC. I'd be all over him like a bad shirt.

    Meanwhile, as we saw in recent slightly pre-Jobs-return history, NOT having a strong cash reserve puts a company at risk of failure.

    There are better ways to 'redistribute' profits to ALL shareholders, fairly and incrementally.

    Einhorn really needs to stand down.
  • Reply 54 of 81
    flaneurflaneur Posts: 4,509member
    popnfresh wrote: »
    Apple doesn't need to "reverse losses", because it hasn't had any losses. Apple's stock has lost value, but the company has not lost money. In fact, Apple remains extremely profitable. What's happened is there is a disconnect between Apple's financial performance, which by any object measurement has remained stellar, and Wall Street's inflated expectations.

    What Apple needs to do more than anything else is innovate. All of their major product segments are rapidly approaching saturation, meaning that going forward a higher percentage of people will only be buying an Apple product when they feel it's time to upgrade. Unfortunately, that's not going to keep Apple's profits flying high. They need to invent new insanely great products that will define new product categories, like the iPad did with the tablet segment. Apple didn't invent the tablet, but the iPad transformed it into something huge.

    Apple needs to do that again and surprise us with something we didn't know we needed until they gave it to us. Steve Jobs understood that. Now that he's gone, Apple's current management needs to understand it, too.

    Just fine until your last two sentences. How can you possibly believe they are not working on the next big thing that you don't know you want? Sheesh.
  • Reply 55 of 81

    Quote:

    Originally Posted by igriv View Post


     


    Notice that (a) Jobs hired him, not the money guys (Markkula) and (b) for several years, Sculley was very successful.



     


     


    I think he did say "it was the biggest mistake JOBS ever made…"  Noticed.


     


    And the only reason Sculley appeared 'successful" is because for several years he rode the momentum that Apple already had when he took the helm. He butied it, slowly and incrementally. I remember… I was there as an active observer during those years.


     


    I watched Sculley's leadership take Apple from a 25% market share in Japan, to a 2% market share as it approached bankruptcy...


     


    Success and Sculley are two words that DO NOT belong in the same sentence synonymously. To do so means you are trying rewrite a very valuable history lesson.

  • Reply 56 of 81

    Quote:

    Originally Posted by zoffdino View Post


    Post hoc ergo propter hocApple announced the dividends in March 2012, paid the first one in July and, climbed to $700 in September, and crashed to $450 where it is now. And the dividend is responsible for the crash?


     



     


    I have to agree that I don't think it was the dividend but rather then date that did it.


     


    October was the anniversary of Steve's death. Many folks that don't understand tech development and how it is a multiyear process believed that at this one year mark anything Steve was a part of was come and gone (when in truth that time could be another decade on some items)


     


    So Fall 2012 was, in the eyes of the less educated, the start of Tim Cook's Apple. They expected something wiz bang crazy amazing to show them that Tim was just as magical as Steve, like that real TV, and didn't get it. Add this to the analysts and their way overinflated predications and the drop was easy to see coming. 


     


    However I disagree that the users are leaving. They aren't. If anything they are growing. It's only the investors looking for quick money that are leaving. And that could be a good thing. Especially if the analysts go with them. And the hit whoring blogs that will drop Apple into everything they can to score eyes and love to connect Apple to everything in a negative way. Like the mentioned Foxconn freeze. Evened was quick to bash Apple but no one bothered to find out the truth before printing. Which was more along the lines that condition improvements are working so well that almost every employee working the Apple lines asked to continue working here, leaving no room to hire more people. 

  • Reply 57 of 81
    rayzrayz Posts: 814member
    igriv wrote: »
    By the way, both OS X and iOS have their share of bugs, so apparently apple is not willing to spend their money even on quality assurance.

    Every major piece of software in existence has its share of bugs.
  • Reply 58 of 81

    Quote:

    Originally Posted by igriv View Post


    If you own AAPL, and you need to buy a house, or take a vacation, or retire comfortably, then Apple stock needs to reverse its losses. If you are willing to wait for five years for the next insanely great product, you are in a different position, and can take comfort from how great Apple looks on paper.



     


    I don't know who you are, but you are unerringly debating in favor of Einhorn's position, and brushing aside all the good sense of those opposed as if they have no validity. How does "Apple stock reversing" have anything to do with 'preferred or not preferred, and WHO gets to decide that"?


     


    You are also painting opposition to Einhorn's position as foolish, short-sighted, etc. This post here works to divide us all into an image of your own making. Two camps. those with the 'luxury to wait around happily cheering on Apple" ('on paper' implies that they aren't as strong as they appear…? seriously?) and "those who need Apple to reverse its LOSSES"….


     


    The STOCK took a hit. Apple hasn't seen any LOSSES in a long while. Apple itself is in fine shape, immensely profitable and with a growing cash pile. Some of us are looking beyond the immediate arguments. I ask, WHY has the stock been hammered, if the company is in such great shape? It reeks of manipulation. And lo and behold, a financial shark (Einhorn) appears in the midst of THAT, going after Apple aggressively regarding changing the earnings game…? And you argue entirely on the behalf of that position? M-hm...


     


    It isn't wise to invest money into the stock market that you had earmarked for buying a house… the stock market is NOT a moderate-to-low risk environment. Vacation money, retirement money… stock market is the LAST place those are invested, or you're putting those at undue risk.


     


    Apple's stock price WILL go up, a lot, and quickly. As soon as people like Einhorn get out of the way and let it accrue naturally. While they're CREATING the downward pressure through carefully timed 'analyst' releases and buying manipulations (based on a background agenda like the one apparent here now), the stock will not mature as it should.


     


    Einhorn will lose the push to allow preferred shares. He will cease his campaign, and the stock will rebound quickly toward where it should be. Why would you have a problem with that?

  • Reply 59 of 81
    anonymouse wrote: »
    Apologies, but your post does not make any sense to me.

    Let me ask you this: If you bought a house with your own money, does the house belong to you?

    Let me ask you this: Is a house a corporation?

    It most certainly can be!

    More generally, what's your point about corporations? The fact that they have limited liability? Why should that matter?
  • Reply 60 of 81

    Quote:

    Originally Posted by anantksundaram View Post





    It most certainly can be!



    More generally, what's your point about corporations? The fact that they have limited liability? Why should that matter?


     


    Actually, no, the house can't be a corporation, although it can be owned by one. The point to that question was that you didn't have a valid analogy. The point about corporations is that they own themselves, the stockholders simply own stock issued by the corporation, not the corporation itself.

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