I'd like to know what 'push hard' means in the context of this meeting. If my kids push too hard I get pissed off and warn them about consequences. How does someone without technical or creative credentials, or any kind of employment record with the company get to 'push hard' for anything? I accept that Apple seeks advice from whom it regards as an expert in any field, but I just don't like the braggart's tone. The only message this sends is 'money talks' which is perfect for Icahn, but I think sits uneasily with a large portion of Apple customers.
Many of you are very ignorant about buybacks. Very ignorant. Fact is Apple has so much money they can't spend it wisely at this point. They already have $150B in cash and they generate $40-$50B a year of free cash flows. By the end of 2016 they will have over $300B. Half of that going to buybacks won't hurt or stop Apple in any way.
Just look at IBM for reference. They have bought back over 40% of their shares and have reward their shareholders. With a $150B buyback Apple can decrease share count by 25%-30%. That's a boost of EPS by the same percentage. Thus all things equal the share price should increase by the same %.
Sorry hording the $300B is not an option. They would either have to return cash to shareholders or make aquisitions. Large aquisitions rarely work. Look at Google buying Motorola Mobile. Looks nice on paper but they are losing almost a BILLION dollars a year on that 'investment'. They bought Motorola for $13B and I'm almost 100% sure they won't recoup any of that money. When all is said and done they may lose $20B.
I'm not sure I buy the argument that they can't spend money wisely. In fact I'd say that they have probably done it the best of their competitors. It's true that Apple has never gone for the big acquisition since those kinds of deals are fraught with peril. What they have done is go after small to medium sized companies whose tech always ends up in an Apple product at some point. The biggest deal Apple has ever done was buying NeXT for $400 million back in 1996...which then as a literally a "bet the company" move since it was more than 10% of their dwindling cash reserves (and the company was burning $1b a quarter in cash by then too).
What you're saying is that there is no $50=$100 billion deal out there that would be in Apple's best interest. That may be true. Heck, Blackberry just went for less than $5b. You can't buy Google (anti-trust) or Microsoft (still too expensive, and why would you want those guys anyway?). You could buy IBM or HP outright but again, why? No synergy whatsoever. Apple is not a company that needs to goose its sales numbers...they already have that.
In a way, the proper way to deal with the cash has been to be patient and not spend it. The current buyback took years to consider and was carefully considered. Icahn is in his 80s now and has all the money he'd ever need. He's just in it now for the game.
A share buy back is an artificial way to fix an 'undervalued' stock. Once Apple stops buying back stock, it would just fall back to the so-called 'undervalued' level. I view this as a ploy for short term investors to milk Apple of its cash. Of all the investors Apple should be rewarding, the short termers should be the last on their list.
problem is, there is no classification of 'investor' in Apple's proxy form.
And it's Icahn's basic M.O. 'Sell Off' assets to prop stock price and/or lever a buy out. But he is an 'owner,' and as a part owner, he can lobby other owners to his side or not.
$150Billion… thats $170/share. Now it's unclear if that's total (on top of current buybacks) or in addition to.
Problem is… Classic Apple valuation seems directly related to retained cash/equivalents.
This is far worse than 'iPhone 5c is way overpriced… Apple will fail' stuff. _THIS_ is market manipulation. Tim Cook couldn't have tweeted that out without SEC ramifications.
But Icahn, not being on the board, can do what ever he wants, and he's probably feeding analysts a few $$$ to back his view (#GordonGecko), and driving the price down, allows him to buy a seat on the board, and then he can drive the company a bit.
Time for Apple to consider putting in poison pills into its business plan
While not a fan of "stockholder value" as a significant measure for planning [this has been shown to be a formula for long term failure of a company, aka Clay Christensen], there is some logic aka Buffet, that when the stock is so undervalued, it makes sense to buy some of it back as an enormous discount.
This builds more fundamental longer term value for the company, but the "judgment" as to what amount is complex between tax laws, returning overseas earning, dividend as investment return, etc. Since Icahn had NO involvement in the business decisions that have made Apple so successful, it is hard to imagine what perspective he could add other than a speculative investor looking for a quick return on under valued stock.
How does someone without technical or creative credentials, or any kind of employment record with the company get to 'push hard' for anything?
I myself am a long-term Apple customer (30 years) as well as a long-term AAPL investor (15 years), and I'm pleased with how things have worked out on both counts. Icahn definitely doesn't speak for me as a customer; I don't think he has any expertise in this area. However as an investor, I'm comfortable with Icahn being an outspoken, intelligent spokesman for the investment community. I'm quite confident that Tim Cook won't be steamrolled by one bully. But I'm also confident that Cook will consider interesting possibilities, form his own opinions, share those opinions with the board and executive team, make decisions and act. Carl Icahn is just one voice, but it's a valid voice.
I think that today, Wall Street is mostly myopic as far as Apple goes (and maybe a little insane as well). If Icahn's massive buyback does happen, that might enable Wall Street to do a better job recognizing reality. It's hard to understand reality, especially when today's reality is so different than the past. Apple is a completely unique company, and today's rate of technological change is mind-boggling. Icahn recognizes this better than most of Wall Street, and he has AAPL investors' best interests at heart.
The problem here is that Apple is already stepping out of its proverbial comfort zone by having any debt on the books. The idea is that Apple's cash generation machine would retire that debt quickly before it started becoming a problem for them fiscally. But Icahn is only looking out for his position as a shareholder...he's not running a company. I doubt Apple wants any more debt on its books than it already considered. The tech world is a dangerous place and fortunes can easily turn on you...just ask Blackberry.
I expect that the board will consider the proposal, then politely turn him down. Fortunately, Icahn's $1 billion of Apple shares isn't that big in the grand scheme of things for him make Cook and the board's life miserable, like what happened at Dell.
last point… yep.
First point. I question 'comfort zone.' Cook and Oppenheimer have worked in Debt financed businesses in the past. I do think that from when they joined the company (98 and 96), and Steve's subsequent return, cash was a serious concern, primarily if you are changing the computing world… you need several months, if not years of operating cash to suffer through new product development and adoption curves if you 'miss' slightly (think of NeXT… if they had more cash, a longer runway, etc, etc, and the fact that those first couple years (97-99), when they were 'weeks' from bankruptcy with no real products. Cash was a necessary operational runway extender when you were taking on 4 bet the business changes (PowerPC->Intel, OSX, iPod, iOS) and 3 other major commitments (moving to an Allin1 computer [iMac, MacbookPro/Air], ITunes, AppleTV[hobby… or long term investment], Component Design [ASeries, LiquidMetal, Authentec]). These require cash to keep going along a vision that is not necessarily aligned with quarterly returns.
After the iPad releases, I do think they realize that they are cash rich, and need to remove this from the balance sheets to refocus on nimbleness. $100B cash on hand is pretty good (20% of equity value, and covers a couple years of operations at no profit). The cash is primarily a problem of US tax law, and it will drive external expansion…. so you use foreign assets as collateral for US lenders to pay US dividends and US stock buy backs, at basically 0% interest. And the interest is a business expense, instead of a tax burden.
I'm thinking they are sitting on the rest of the cash to wait for either US corp tax law to 'internationalize' a bit, or they find a tax haven that allows them to build a data centers/operations to support their non-US revenue streams.
In the end, in 5-10 years, the US will be NOT generate the lions share of their profits, and these offshore profits can be exploited to build a world wide infrastructure at a much lower cost for money (the IBMs, the Amazon's, the Googles, the Rackspaces all need to spend interest to build offshore… Apple will be building 'for free' so to speak.
And I still think Apple will become an online 'bank' in many regions of the world, providing 'full faith and credit' for ITMS purchases without local banks involved, and/or being a card processor in these regions in such a way that they are able to make more money on each transaction by reducing the cost of the 'money supply chain….' which is Cook's Forte'
The idea is not that they use their enormous cash hoard, but that they borrow the money. Buying the stock would cause it to rise to it's proper value, and since Apple would own more stock they would benefit. Apple's cost of borrowing would be low, and the interest payments are a pre-tax expense which would lower their overall tax burden; and their net dividend payouts would also be reduced.
It's not a terrible idea.
Not sure what its 'proper' value is but yes it will probably rise.
IMO... Not saying this is correct or wrong reasoning, just possibly one line of thought--Apple may be undervalued on Wall Street since it plays in the consumer electronics game. Historically consumer electronics is a very brutal market place with no real long term 'dominate' players. They are afraid that in a year, two years.. or so, all of a sudden Apple produces a loser (or someone else a big winner), and 'snap' in a short time Apple loses their 'big winner' business. Not out of business, but greatly demished.. They’ve seen this happen to Sony etc. Consumer Electronics is not like a Boeing or GE etc where it takes years(perhaps decades) for a competitor to take over a market. And typically they will have time to respond to a competitors product.
$12.5 billion was the purchase price. Where did you get $4 Bil?
"At $12.5B, Motorola is Google’s largest acquisition to date. Google paid $40 / share in cash, but received ~$11 / share in cash and $8 / share in deferred tax assets. Thus the value ascribed to operations + patents was about $21 / share, or $6.3B, reflecting a multiple of ~0.5x sales and 12x EBITDA. Now adjusting this further for the $2.35B total consideration Google is expected to receive for the Motorola Home business, we get a purchase price of just under $4B for Motorola's handset business and patent portfolio (17K patents and 7.5K patent applications). This compares very favorably to recent patent deals such as Apple, Microsoft, RIM, Sony, Ericsson, and EMC paying $4.5B for 6K patents (July ’11) and Microsoft paying $1B for 800+ AOL patents (April ’12). Based on a sum of the parts, one could conclude Google acquired either the handset or its patents for a very minimal cost."
Just so you know... Apple is actually borrowing a lot of the money they are using to buy back shares.
... and the Moto purchase by Google... after deducting cash and tax breaks... about $4 billion total... not $12.5 billion.
There's another reason Apple is borrowing to finance the stock buybacks. It's often said that Apple has more cash on hand than any other American company. In reality Google and Apple are roughly equal in cash and short-term investments at around $40Billion each from what I'm reading tho I think I saw mention a few weeks ago that Google now had significantly more liquid assets available to them than Apple currently does. Much of Apple's is tied up in long-term commitments and not readily available.
"At $12.5B, Motorola is Google’s largest acquisition to date. Google paid $40 / share in cash, but received ~$11 / share in cash and $8 / share in deferred tax assets. Thus the value ascribed to operations + patents was about $21 / share, or $6.3B, reflecting a multiple of ~0.5x sales and 12x EBITDA. Now adjusting this further for the $2.35B total consideration Google is expected to receive for the Motorola Home business, we get a purchase price of just under $4B for Motorola's handset business and patent portfolio (17K patents and 7.5K patent applications). This compares very favorably to recent patent deals such as Apple, Microsoft, RIM, Sony, Ericsson, and EMC paying $4.5B for 6K patents (July ’11) and Microsoft paying $1B for 800+ AOL patents (April ’12). Based on a sum of the parts, one could conclude Google acquired either the handset or its patents for a very minimal cost."
I bought this car for $5,000, but if I sell the tires, the airbags and the radio plus find $50 in the glovebox it really was only $4000.
I would love love love for Tim Cook to go with this. A $150b buy-back would be the solution for Apple. It would bring them a whole lot closer to going private. It´s a great way to spend their hard earn money. It will reduce the amount of stocks shorters can abuse in order to push apple more down. And it will greatly their EPS in the years ahead.
There are 908 million outstanding shares. Last quarter 22millions was retired but was not updated. They can easily buy about 90million more on the planned buyback, and if they use another $150b for buy-back we´re talking about 272million shares at avg. price of $550 per share.
That would reduce the outstanding number of shares to 542million shares.
I´m sure Tim and Apples board knows what is best for Apple, but I would not be surprised if they end up doing just what Icahn recommends. It makes a lot of sense.
One thing a lot of people seem to forget, including Icahn, is that a lot of Apple's cash is offshore. In order to do the current buyout they had to borrow money domestically.
To repatriate the offshore money, they would lose out to the theft by the US government which will take a big cut of it-- %30? -- which means doing a $100B buyout would cost $130B, and would only make "sense" if the stock were more than %30 below reasonable value.
That said, the best/biggest acquisition Apple can make with it's stock is itself as a company... buying Apple shares give a good return on investment when the stock is cheap (like now) and there's no problems integrating cultures, etc. $12B of Apple is a better buy than $12B for Blackberry or whatever.
Comments
I'd like to push Carl Ican off a cliff. Hard.
I'd like to know what 'push hard' means in the context of this meeting. If my kids push too hard I get pissed off and warn them about consequences. How does someone without technical or creative credentials, or any kind of employment record with the company get to 'push hard' for anything? I accept that Apple seeks advice from whom it regards as an expert in any field, but I just don't like the braggart's tone. The only message this sends is 'money talks' which is perfect for Icahn, but I think sits uneasily with a large portion of Apple customers.
Many of you are very ignorant about buybacks. Very ignorant. Fact is Apple has so much money they can't spend it wisely at this point. They already have $150B in cash and they generate $40-$50B a year of free cash flows. By the end of 2016 they will have over $300B. Half of that going to buybacks won't hurt or stop Apple in any way.
Just look at IBM for reference. They have bought back over 40% of their shares and have reward their shareholders. With a $150B buyback Apple can decrease share count by 25%-30%. That's a boost of EPS by the same percentage. Thus all things equal the share price should increase by the same %.
Sorry hording the $300B is not an option. They would either have to return cash to shareholders or make aquisitions. Large aquisitions rarely work. Look at Google buying Motorola Mobile. Looks nice on paper but they are losing almost a BILLION dollars a year on that 'investment'. They bought Motorola for $13B and I'm almost 100% sure they won't recoup any of that money. When all is said and done they may lose $20B.
I'm not sure I buy the argument that they can't spend money wisely. In fact I'd say that they have probably done it the best of their competitors. It's true that Apple has never gone for the big acquisition since those kinds of deals are fraught with peril. What they have done is go after small to medium sized companies whose tech always ends up in an Apple product at some point. The biggest deal Apple has ever done was buying NeXT for $400 million back in 1996...which then as a literally a "bet the company" move since it was more than 10% of their dwindling cash reserves (and the company was burning $1b a quarter in cash by then too).
What you're saying is that there is no $50=$100 billion deal out there that would be in Apple's best interest. That may be true. Heck, Blackberry just went for less than $5b. You can't buy Google (anti-trust) or Microsoft (still too expensive, and why would you want those guys anyway?). You could buy IBM or HP outright but again, why? No synergy whatsoever. Apple is not a company that needs to goose its sales numbers...they already have that.
In a way, the proper way to deal with the cash has been to be patient and not spend it. The current buyback took years to consider and was carefully considered. Icahn is in his 80s now and has all the money he'd ever need. He's just in it now for the game.
A share buy back is an artificial way to fix an 'undervalued' stock. Once Apple stops buying back stock, it would just fall back to the so-called 'undervalued' level. I view this as a ploy for short term investors to milk Apple of its cash. Of all the investors Apple should be rewarding, the short termers should be the last on their list.
problem is, there is no classification of 'investor' in Apple's proxy form.
And it's Icahn's basic M.O. 'Sell Off' assets to prop stock price and/or lever a buy out. But he is an 'owner,' and as a part owner, he can lobby other owners to his side or not.
$150Billion… thats $170/share. Now it's unclear if that's total (on top of current buybacks) or in addition to.
Problem is… Classic Apple valuation seems directly related to retained cash/equivalents.
This is far worse than 'iPhone 5c is way overpriced… Apple will fail' stuff. _THIS_ is market manipulation. Tim Cook couldn't have tweeted that out without SEC ramifications.
But Icahn, not being on the board, can do what ever he wants, and he's probably feeding analysts a few $$$ to back his view (#GordonGecko), and driving the price down, allows him to buy a seat on the board, and then he can drive the company a bit.
Time for Apple to consider putting in poison pills into its business plan
This builds more fundamental longer term value for the company, but the "judgment" as to what amount is complex between tax laws, returning overseas earning, dividend as investment return, etc. Since Icahn had NO involvement in the business decisions that have made Apple so successful, it is hard to imagine what perspective he could add other than a speculative investor looking for a quick return on under valued stock.
How does someone without technical or creative credentials, or any kind of employment record with the company get to 'push hard' for anything?
I myself am a long-term Apple customer (30 years) as well as a long-term AAPL investor (15 years), and I'm pleased with how things have worked out on both counts. Icahn definitely doesn't speak for me as a customer; I don't think he has any expertise in this area. However as an investor, I'm comfortable with Icahn being an outspoken, intelligent spokesman for the investment community. I'm quite confident that Tim Cook won't be steamrolled by one bully. But I'm also confident that Cook will consider interesting possibilities, form his own opinions, share those opinions with the board and executive team, make decisions and act. Carl Icahn is just one voice, but it's a valid voice.
I think that today, Wall Street is mostly myopic as far as Apple goes (and maybe a little insane as well). If Icahn's massive buyback does happen, that might enable Wall Street to do a better job recognizing reality. It's hard to understand reality, especially when today's reality is so different than the past. Apple is a completely unique company, and today's rate of technological change is mind-boggling. Icahn recognizes this better than most of Wall Street, and he has AAPL investors' best interests at heart.
The problem here is that Apple is already stepping out of its proverbial comfort zone by having any debt on the books. The idea is that Apple's cash generation machine would retire that debt quickly before it started becoming a problem for them fiscally. But Icahn is only looking out for his position as a shareholder...he's not running a company. I doubt Apple wants any more debt on its books than it already considered. The tech world is a dangerous place and fortunes can easily turn on you...just ask Blackberry.
I expect that the board will consider the proposal, then politely turn him down. Fortunately, Icahn's $1 billion of Apple shares isn't that big in the grand scheme of things for him make Cook and the board's life miserable, like what happened at Dell.
last point… yep.
First point. I question 'comfort zone.' Cook and Oppenheimer have worked in Debt financed businesses in the past. I do think that from when they joined the company (98 and 96), and Steve's subsequent return, cash was a serious concern, primarily if you are changing the computing world… you need several months, if not years of operating cash to suffer through new product development and adoption curves if you 'miss' slightly (think of NeXT… if they had more cash, a longer runway, etc, etc, and the fact that those first couple years (97-99), when they were 'weeks' from bankruptcy with no real products. Cash was a necessary operational runway extender when you were taking on 4 bet the business changes (PowerPC->Intel, OSX, iPod, iOS) and 3 other major commitments (moving to an Allin1 computer [iMac, MacbookPro/Air], ITunes, AppleTV[hobby… or long term investment], Component Design [ASeries, LiquidMetal, Authentec]). These require cash to keep going along a vision that is not necessarily aligned with quarterly returns.
After the iPad releases, I do think they realize that they are cash rich, and need to remove this from the balance sheets to refocus on nimbleness. $100B cash on hand is pretty good (20% of equity value, and covers a couple years of operations at no profit). The cash is primarily a problem of US tax law, and it will drive external expansion…. so you use foreign assets as collateral for US lenders to pay US dividends and US stock buy backs, at basically 0% interest. And the interest is a business expense, instead of a tax burden.
I'm thinking they are sitting on the rest of the cash to wait for either US corp tax law to 'internationalize' a bit, or they find a tax haven that allows them to build a data centers/operations to support their non-US revenue streams.
In the end, in 5-10 years, the US will be NOT generate the lions share of their profits, and these offshore profits can be exploited to build a world wide infrastructure at a much lower cost for money (the IBMs, the Amazon's, the Googles, the Rackspaces all need to spend interest to build offshore… Apple will be building 'for free' so to speak.
And I still think Apple will become an online 'bank' in many regions of the world, providing 'full faith and credit' for ITMS purchases without local banks involved, and/or being a card processor in these regions in such a way that they are able to make more money on each transaction by reducing the cost of the 'money supply chain….' which is Cook's Forte'
The idea is not that they use their enormous cash hoard, but that they borrow the money. Buying the stock would cause it to rise to it's proper value, and since Apple would own more stock they would benefit. Apple's cost of borrowing would be low, and the interest payments are a pre-tax expense which would lower their overall tax burden; and their net dividend payouts would also be reduced.
It's not a terrible idea.
Not sure what its 'proper' value is but yes it will probably rise.IMO... Not saying this is correct or wrong reasoning, just possibly one line of thought--Apple may be undervalued on Wall Street since it plays in the consumer electronics game. Historically consumer electronics is a very brutal market place with no real long term 'dominate' players. They are afraid that in a year, two years.. or so, all of a sudden Apple produces a loser (or someone else a big winner), and 'snap' in a short time Apple loses their 'big winner' business. Not out of business, but greatly demished.. They’ve seen this happen to Sony etc. Consumer Electronics is not like a Boeing or GE etc where it takes years(perhaps decades) for a competitor to take over a market. And typically they will have time to respond to a competitors product.
http://money.cnn.com/2012/05/22/technology/google-motorola/index.htm
$12.5 billion was the purchase price. Where did you get $4 Bil?
"At $12.5B, Motorola is Google’s largest acquisition to date. Google paid $40 / share in cash, but received ~$11 / share in cash and $8 / share in deferred tax assets. Thus the value ascribed to operations + patents was about $21 / share, or $6.3B, reflecting a multiple of ~0.5x sales and 12x EBITDA. Now adjusting this further for the $2.35B total consideration Google is expected to receive for the Motorola Home business, we get a purchase price of just under $4B for Motorola's handset business and patent portfolio (17K patents and 7.5K patent applications). This compares very favorably to recent patent deals such as Apple, Microsoft, RIM, Sony, Ericsson, and EMC paying $4.5B for 6K patents (July ’11) and Microsoft paying $1B for 800+ AOL patents (April ’12). Based on a sum of the parts, one could conclude Google acquired either the handset or its patents for a very minimal cost."
Note to Tim...
Whatever Icahn suggests, do the exact opposite. It's the only way to survive.
There's another reason Apple is borrowing to finance the stock buybacks. It's often said that Apple has more cash on hand than any other American company. In reality Google and Apple are roughly equal in cash and short-term investments at around $40Billion each from what I'm reading tho I think I saw mention a few weeks ago that Google now had significantly more liquid assets available to them than Apple currently does. Much of Apple's is tied up in long-term commitments and not readily available.
EDIT: I did remember correctly. As of August Apple was reportedly in 4th place among techs with stockpiles of cash and short-term investments.
http://www.infoworld.com/slideshow/118479/top-tech-hoarders-15-companies-huge-cash-piles-226260#slide2
"At $12.5B, Motorola is Google’s largest acquisition to date. Google paid $40 / share in cash, but received ~$11 / share in cash and $8 / share in deferred tax assets. Thus the value ascribed to operations + patents was about $21 / share, or $6.3B, reflecting a multiple of ~0.5x sales and 12x EBITDA. Now adjusting this further for the $2.35B total consideration Google is expected to receive for the Motorola Home business, we get a purchase price of just under $4B for Motorola's handset business and patent portfolio (17K patents and 7.5K patent applications). This compares very favorably to recent patent deals such as Apple, Microsoft, RIM, Sony, Ericsson, and EMC paying $4.5B for 6K patents (July ’11) and Microsoft paying $1B for 800+ AOL patents (April ’12). Based on a sum of the parts, one could conclude Google acquired either the handset or its patents for a very minimal cost."
I bought this car for $5,000, but if I sell the tires, the airbags and the radio plus find $50 in the glovebox it really was only $4000.
Yea, right. The purchase price was $12.5B
Hey jackass, how much $$ is enough so you get retired and leave?!!
I'm much more in favor of a buyback versus increasing the dividend. At least the buyback increases the value of the company.
I would love love love for Tim Cook to go with this. A $150b buy-back would be the solution for Apple. It would bring them a whole lot closer to going private. It´s a great way to spend their hard earn money. It will reduce the amount of stocks shorters can abuse in order to push apple more down. And it will greatly their EPS in the years ahead.
There are 908 million outstanding shares. Last quarter 22millions was retired but was not updated. They can easily buy about 90million more on the planned buyback, and if they use another $150b for buy-back we´re talking about 272million shares at avg. price of $550 per share.
That would reduce the outstanding number of shares to 542million shares.
I´m sure Tim and Apples board knows what is best for Apple, but I would not be surprised if they end up doing just what Icahn recommends. It makes a lot of sense.
I bought this car for $5,000, but if I sell the tires, the airbags and the radio plus find $50 in the glovebox it really was only $4000.
Yea, right. The purchase price was $12.5B
If you say so.
By the way... did you get a tax break for buying that car? Did they give you a pile of cash with it as well? Just curious.
Edit: Apple going private? IMO.
Have you really thought that thru?
One thing a lot of people seem to forget, including Icahn, is that a lot of Apple's cash is offshore. In order to do the current buyout they had to borrow money domestically.
To repatriate the offshore money, they would lose out to the theft by the US government which will take a big cut of it-- %30? -- which means doing a $100B buyout would cost $130B, and would only make "sense" if the stock were more than %30 below reasonable value.
That said, the best/biggest acquisition Apple can make with it's stock is itself as a company... buying Apple shares give a good return on investment when the stock is cheap (like now) and there's no problems integrating cultures, etc. $12B of Apple is a better buy than $12B for Blackberry or whatever.