Yes it would. Management can easily argue that the NPV of what they plan to do with the repatriated funds is greater than the value of the tax loss. You do not and and will not have the ability to second guess that as an investor if Apple's board goes along.
If managers were sued for stuff like this, they will not be able to do a thing. You might as well handcuff them. That's the reason courts won't allow that type of frivolity.
It wouldn't be that hard to make that argument. First, the tax loss exists, anyway. If they EVER plan to use that money in the U.S. (for dividends, acquisitions, etc), then the taxes need to be paid. So using it for dividends doesn't change anything. Second, Apple's P/E is less than half of what it should be based on the rest of the market, so a 30% tax loss to buy back shares isn't an unreasonable hit.
Most importantly, though, you are absolutely correct. This falls well in line with reasonable management discretion and a court wouldn't second guess it. Since the board has already authorized share buybacks, it's simply not an issue.
Besides, they wouldn't have to repatriate money, anyway, since they also got approval for a bond sale if necessary.
Of course it's grossly undervalued. Look at Apple's P/E compared to almost anyone else in the tech arena. Then consider who's bringing new ideas and moving the industry forward and try to justify that fact.
What say you Larry Ellison?
Ellison is just projecting. He hopes the day he leaves Oracle it collapses.
Comments
It wouldn't be that hard to make that argument. First, the tax loss exists, anyway. If they EVER plan to use that money in the U.S. (for dividends, acquisitions, etc), then the taxes need to be paid. So using it for dividends doesn't change anything. Second, Apple's P/E is less than half of what it should be based on the rest of the market, so a 30% tax loss to buy back shares isn't an unreasonable hit.
Most importantly, though, you are absolutely correct. This falls well in line with reasonable management discretion and a court wouldn't second guess it. Since the board has already authorized share buybacks, it's simply not an issue.
Besides, they wouldn't have to repatriate money, anyway, since they also got approval for a bond sale if necessary.
Isn't that a nice change.
Quite right. Ha!
Ellison is just projecting. He hopes the day he leaves Oracle it collapses.