"Icahn admitted that such a buyback would be "unprecedented" in size, he feels it would be appropriate because of the relative size and strength of Apple."
And Apple's size and strength and healthy position wouldn't be disastrously ruined by stripping $150 billion out of its cash position?
The guy is really saying, "We want ALL of your cash NOW! Hand it over, or else...!"
And this, because he simply decided one day to buy a billion dollars worth of stock, and wants to leverage a huge gain. I guarantee he'd be making a FORTUNE on the 2 ~ 3 million shares he bought at way less than $525 a share.
I suggest that, rather than try and force Apple to buy back shares, why not just sell the ones he has at THE SAME PRICE (see today's share price), and be done with it? Why HASSLE Apple management about it at all?
Apple stock is totally stagnant and there has to be some practical way to get it moving up again. If Google and Amazon can do it, so should Apple be able to find a way.
Wait, Apple stock has gained about 15% over the past month (and trending up overall) and you call that "totally stagnant"? Not moving up? Wha...?
Maybe a year ago. Keep current, man!
As for the rest of your conjecture, thinking you know "what's best for Apple's strategy ahead", I think I'll trust the current execs who seem to be doing a FINE job keeping that ship on course.
About the only things I agreed with in your post were the "Icahn can go to hell" sentiment and the idea that more focus on improved dividends will attract the right kind of investor, and/or provide more (balanced) benefit to the smaller cap investor.
I fail to see what benefit Apple would get from this buyback scheme.
I like that Apple has a large war chest of security, am not interested in Apple throwing this away just to get a bigger valuation on my AAPL shares. I bought AAPL because I love Apple long-term, not to make money short-term.
Is there even a cast-iron guarantee that AAPL shares would go up in value? I wouldn't be surprised if the market priced in any EPS share increase and the share price hardly moved, (or moved up then back down again).
And why exactly should AAPL try to increase shareholder value anyway? How does that benefit Apple?
Tim Cook should just ignore this self-serving money-grabbing f-wit.
Go take a Econ class and you will understand what Icahn is saying. Those who doesn't think he is making sense really have no business investing
This is bad for Apple, Icahn is only interested in lining his pockets, the fact he suggest Apple go into debt if needed to to buy back more stock more quickly proves that. He does not care if Apple is making the right investments with its money or whether the company is doing all the right thing to grow the company, he is only interesting in making sure the stock value goes up. As we seen there is a much larger group who have been trying to drive the stock value down as fast as possible since they make money on the down side. Icahn is attempting to drive the stock up quickly so to drive out the people who are shorting the stock to drive its value down.
Icahn has screwed every company he go involved with, he did not make it better for investors he made it better for him.
Are you dumb? If Icahn lines his pockets by making shares go up, that lines your pockets too! I mean sometimes I think people are just too stupid for their own good
Carl Icahn is NOT an investor - he is a corporate raider. His role in the demise of TWA has already been mentioned. His game plan: 1) buy enough stock in a company that has cash on hand to be elected to the Board of Directors; 2) control the Board by bringing on 'associates;' 3) break up the company and sell the component parts for more cash; 4) leave the empty shell behind; 5) claim success for stockholders; i.e., himself and friends.
btw - 'investors' contribute nothing to the company whose stock they buy - unless they are buying treasure shares. The money goes to the seller - not the company.
Carl Icahn's behavior is a principal reason the 'poison pill' was invented.
Poison pill is also invented by fat cat CEO continue to make millions while not interested in creating shareholder value. Icahn is right here and those of you citing Twa and things like corporate raider are believing too much in fat cat CEOs who want to keep making their fat check and not be questioned about stock performance. I don't want to be a a sukker sorry
Are you dumb? If Icahn lines his pockets by making shares go up, that lines your pockets too!
Not if you're a long. I don't give a shit what Apple share price is in the next 5 years. The lower the better really.
He wants short term gains at MY expense. F*ck him and you. Stock buybacks have historically done butkus for long term share price and negatively impact the health of the company.
Not if you're a long. I don't give a shit what Apple share price is in the next 5 years. The lower the better really.
He wants short term gains at MY expense. F*ck him and you. Stock buybacks have historically done butkus for long term share price and negatively impact the health of the company.
A 2 to 1 or 3 to1 split would be better than any buyback scheme.
So far Apple has bought back about $30B in shares and the stock has gone up about 15% since then. That's about $5B they saved right there.
You're weighing up assured assets in the bank against market values determined by traders. If traders decide that Apple isn't innovating enough, they are the ones that lower the value of the company and yet they turn round and blame the people at Apple for not making them have more confidence in Apple.
Let's say that Apple spends $100b and they manage to get the stock price above $700. What's to stop the market from trading back down to $500 if Apple has a few product releases that don't go over too well or numbers aren't growing fast enough? Traders can wipe out that $100b spend in a matter of months - look at what happened September-November 2012; 3 months and people moaned about how Apple/Tim wiped 1/4 off their value. There was nothing Apple did differently, traders just changed their valuation of Apple.
I think Apple needs to come up with some solid plans for spending their cash but in ways that sustain or grow revenue. The same way you buy a house to rent it out. They need to buy a house of content. They can do things like commission software/game ports to the Mac and iOS because these add value to their platform and encourage hardware sales. Instead of waiting for Autodesk to port 3DS Max, pay Autodesk to hire a team to port it to the Mac. Allocate $100m to pay games developers to port major AAA titles to iOS and OS X. Get into media distribution in a bigger way than the iTunes store. Offer cloud computing services for researchers and artists. Commission development of Thunderbolt peripherals. They can get royalties on everything for years into the future. A massive buyback gives them no direct way to grow revenue and if they don't grow revenue, they are just exchanging assets for a volatile market valuation.
by being very dependent on their stock price, companies are very sensitive to Wall street's whims and influence. This opens them up to be manipulated by analysts trying to swing the price. Apple doesn't play that game and that is why they are being punished.
It looks very much like a bid to exert more influence. If they are going to sustain their revenue anyway, the stock price will go up and they won't need to do a buyback. If they do build up a reserve of over $300b and the stock is undervalued, that would be a better time to spend more. Depleting reserves before it's obvious they can be rebuilt is not a good idea. There are probably a lot of desperate people right now who stuck with it all the way up to $700 and didn't sell before it dropped. They'll want to get it back up there so they can sell above $700 and all those sales will drop it back down.
I think Apple needs to come up with some solid plans for spending their cash but in ways that sustain or grow revenue. The same way you buy a house to rent it out. They need to buy a house of content.
Like buying Netflix and funding $50B worth of independent TV and movies?
It didn't really turn out that great for Sony though. The one company you'd think that would be able to give Apple a run for the ecosystem money is spectacularly dysfunctional.
Like buying Netflix and funding $50B worth of independent TV and movies?
It didn't really turn out that great for Sony though. The one company you'd think that would be able to give Apple a run for the ecosystem money is spectacularly dysfunctional.
I don't think they need to fund independent content, a lot of the Netflix stuff is pretty amateur and low budget looking. As long as they get enough of the most popular TV shows and movies, mostly just setup an accessible conduit and promote it. When it comes to software/games, they can fund the development of Mac/iOS versions.
Comments
If an individual has that many shares, public CEOs have an obligation to meet with him/her.
Really? Where does it say that?
"Icahn admitted that such a buyback would be "unprecedented" in size, he feels it would be appropriate because of the relative size and strength of Apple."
And Apple's size and strength and healthy position wouldn't be disastrously ruined by stripping $150 billion out of its cash position?
The guy is really saying, "We want ALL of your cash NOW! Hand it over, or else...!"
And this, because he simply decided one day to buy a billion dollars worth of stock, and wants to leverage a huge gain. I guarantee he'd be making a FORTUNE on the 2 ~ 3 million shares he bought at way less than $525 a share.
I suggest that, rather than try and force Apple to buy back shares, why not just sell the ones he has at THE SAME PRICE (see today's share price), and be done with it? Why HASSLE Apple management about it at all?
Apple stock is totally stagnant and there has to be some practical way to get it moving up again. If Google and Amazon can do it, so should Apple be able to find a way.
Wait, Apple stock has gained about 15% over the past month (and trending up overall) and you call that "totally stagnant"? Not moving up? Wha...?
Maybe a year ago. Keep current, man!
As for the rest of your conjecture, thinking you know "what's best for Apple's strategy ahead", I think I'll trust the current execs who seem to be doing a FINE job keeping that ship on course.
About the only things I agreed with in your post were the "Icahn can go to hell" sentiment and the idea that more focus on improved dividends will attract the right kind of investor, and/or provide more (balanced) benefit to the smaller cap investor.
I think it's more of a "don't piss off your wealthy shareholders" policy than anything.
I think it's more of a "don't piss off your wealthy shareholders" policy than anything.
That would be the thinking at Blackberry. Not Apple.
Go take a Econ class and you will understand what Icahn is saying. Those who doesn't think he is making sense really have no business investing
Are you dumb? If Icahn lines his pockets by making shares go up, that lines your pockets too! I mean sometimes I think people are just too stupid for their own good
Poison pill is also invented by fat cat CEO continue to make millions while not interested in creating shareholder value. Icahn is right here and those of you citing Twa and things like corporate raider are believing too much in fat cat CEOs who want to keep making their fat check and not be questioned about stock performance. I don't want to be a a sukker sorry
Are you dumb? If Icahn lines his pockets by making shares go up, that lines your pockets too!
Not if you're a long. I don't give a shit what Apple share price is in the next 5 years. The lower the better really.
He wants short term gains at MY expense. F*ck him and you. Stock buybacks have historically done butkus for long term share price and negatively impact the health of the company.
Not if you're a long. I don't give a shit what Apple share price is in the next 5 years. The lower the better really.
He wants short term gains at MY expense. F*ck him and you. Stock buybacks have historically done butkus for long term share price and negatively impact the health of the company.
A 2 to 1 or 3 to1 split would be better than any buyback scheme.
You're weighing up assured assets in the bank against market values determined by traders. If traders decide that Apple isn't innovating enough, they are the ones that lower the value of the company and yet they turn round and blame the people at Apple for not making them have more confidence in Apple.
Let's say that Apple spends $100b and they manage to get the stock price above $700. What's to stop the market from trading back down to $500 if Apple has a few product releases that don't go over too well or numbers aren't growing fast enough? Traders can wipe out that $100b spend in a matter of months - look at what happened September-November 2012; 3 months and people moaned about how Apple/Tim wiped 1/4 off their value. There was nothing Apple did differently, traders just changed their valuation of Apple.
I think Apple needs to come up with some solid plans for spending their cash but in ways that sustain or grow revenue. The same way you buy a house to rent it out. They need to buy a house of content. They can do things like commission software/game ports to the Mac and iOS because these add value to their platform and encourage hardware sales. Instead of waiting for Autodesk to port 3DS Max, pay Autodesk to hire a team to port it to the Mac. Allocate $100m to pay games developers to port major AAA titles to iOS and OS X. Get into media distribution in a bigger way than the iTunes store. Offer cloud computing services for researchers and artists. Commission development of Thunderbolt peripherals. They can get royalties on everything for years into the future. A massive buyback gives them no direct way to grow revenue and if they don't grow revenue, they are just exchanging assets for a volatile market valuation.
It looks very much like a bid to exert more influence. If they are going to sustain their revenue anyway, the stock price will go up and they won't need to do a buyback. If they do build up a reserve of over $300b and the stock is undervalued, that would be a better time to spend more. Depleting reserves before it's obvious they can be rebuilt is not a good idea. There are probably a lot of desperate people right now who stuck with it all the way up to $700 and didn't sell before it dropped. They'll want to get it back up there so they can sell above $700 and all those sales will drop it back down.
I think Apple needs to come up with some solid plans for spending their cash but in ways that sustain or grow revenue. The same way you buy a house to rent it out. They need to buy a house of content.
Like buying Netflix and funding $50B worth of independent TV and movies?
It didn't really turn out that great for Sony though. The one company you'd think that would be able to give Apple a run for the ecosystem money is spectacularly dysfunctional.
I don't think they need to fund independent content, a lot of the Netflix stuff is pretty amateur and low budget looking. As long as they get enough of the most popular TV shows and movies, mostly just setup an accessible conduit and promote it. When it comes to software/games, they can fund the development of Mac/iOS versions.