Imagine if Apple's long, long term goal was to go private. Knowing Apple if that was possible they would do it. Will probably "never" happen though. It'd be interesting to see what the press would be like around Apple were they fully private right now.
What is the benefit as somebody would have to be the owner? Apple can't own itself.
As a long term Apple share holder I was delighted when they started to pay a dividend, even more so as the dive send has been increased. So answer me this: If the shares are about to be split to 7-1 does that mean that my dividend payment will be 7 times greater?
Wallstreet decided to not give Apple credit for 160b in cash as well as 40b dollar annual cash flow. I am so happy Apple is buying back stock. This way wallstreet has to give them credit. They are earning nearly 10% of their market cap each year and wallstreet drove this stock down to 395 last year???? Now they crying about financial engineering!
I won't be complaining anymore about Apple being shareholder unfriendly. How was I to know what Apple was going to do until I see the results? I certainly thought Apple was going to botch another quarter but fortunately I was wrong. I'm sure everyone must have been surprised about the 7 for 1 split. As a shareholder, I'm being left clueless. The only thing I was hopeful of was that Apple was buying back shares as the stock went down and down and down. However, if I don't see any results I tend to get cranky and whiney. I'm finally starting to see results and now I have no reason to complain. Apple's stock movement seems out of kilter with the rest of the tech stocks and the stock market in general. So, it's rather annoying to see all the other tech stocks moving upward while Apple is moving downward. I personally don't have much confidence in Tim Cook because he seems too non-aggressive towards rival companies. I'm sure Apple has some products in the pipeline and that should be a given since hardware is their bread and butter.
Apple is overflowing with cash and in my view, I'd prefer acquisitions to buybacks because I'm looking for additional revenue streams if the iPhone is unable to carry Apple forward. I don't feel comfortable with Apple relying mainly on one product when that particular market appears saturated. I won't be griping for the rest of the year as long as there's at least a little forward motion of Apple's share price. I'm not even expecting a return to $700 a share but I would like to see Apple hit at least $600 with increased dividends and I'll be satisfied. In other words, I'm only asking Apple's share price to perform at least as well as other tech stocks. I don't see how that's too much to ask for. I will sit back quietly and let Tim Cook have his chance and hopefully he will prove himself capable of being Apple's CEO.
If you thought Apple was being shareholder-unfriendly despite buybacks and dividends, I'm afraid you have no idea what it means to be shareholder-unfriendly. The Googles and Facebooks hold the first-place trophy. Google split its stock a year ago in a weird way in which they created a new class of shares called Class C shares that carry no voting power. As it is, Class A shares don't have the same voting rights as Class B shares, which are held by the founders. Class C shares hold no voting power, whatsoever. There exists stock like that, called preferred stock. However, in exchange for giving up voting rights, preferred stockholders get priority with dividend payments and rank higher than common stockholders in event of bankruptcy. Class C shares give stockholders nothing whatsoever. Google basically wants their money for nothing. In fact, the shareholders had to sue the company to force them to put some token protections in the deal. Google even said that they were doing it to protect the company from outside influences in order to focus on the long-term health of the company. This was the language used in CEO Larry Page's letter outlining the plan. I am wracking my brains to think of a more condescending piece of communications to a group of people who are investing money in the company. Google basically wants the benefits of being public while retaining all the rights of a private corporation.
After seeing what Google did, I can't understand how anyone could think Apple is being shareholder-unfriendly in anyway. While Apple's peers have gone as far as painting their shareholders as villains, Apple has been far more friendly to shareholders.
"Apple's capital return program, focused on buying back stock, does appear to have had a favorable impact on Apple's share price. After spending $44 billion on stock buybacks over the past four quarters, Apple's stock has risen 29.2 percent or $129.28, a contribution that moved the company's market cap from $392 billion a year ago to $492 billion today, even as the company removed 80 million shares from circulation."
Apple spent:
$44 Billion cost of stock buybacks
Apple got:
$100 Billion rise in market cap
That is what I meant in my earlier post, buy low, sell high. I did not literally mean Apple was selling the repurchased shares, I was alluding to the general principal of getting something for less, then having it be worth more.
Why was it worth less? The Analysts and CNBC and Kramer et all are significantly responsible for creating the fear and panic that caused AAPL to dip.
Pick that apart and criticize it as you will, there may be some flaws, but the basic concept is truthful and correct.
2) It would take a very usual purchase in the US for Apple to want to bring a large chunk of their overseas holdings back to the states because of the insane taxation they'll have to pay despite having already paid the applicable taxes for that nation. As a shareholder do you really want that? Isn't that capital gains tax at a rate of 39.6% which means bringing back $100 billion to The States makes they lose $20 billion? TWENTY BILLION?! If that percentage is even close to being accurate I can't imagine a shareholder waning that to happen.
I don't feel comfortable with Apple relying mainly on one product when that particular market appears saturated.
You think Apple does? You do make it sounds like they don't care about any of their other products despite kicking ass across the board. You also seem to have this "if I am not aware of it it must not exist" attitude. By age 2 Object Permanance occurs so I think you should trust that Apple is looking out for its best interests and that there heavily increased R&D spending is because they have some ideas on the line they believe are truly going to be good for business.
Apple's huge buyback of outstanding shares is an outstandingly good use of their cash. It's a luxury that all companies would wish for. And it's a long-term play. If you have $150 billion languishing in a bank account earning 4% a year (to be generous), by buying back shares, you are betting that the shares will appreciate at more than 4% a year. Of course, Apple doesn't just keep all its cash in a bank account, but it's hardly much of a gamble to think that the shares will appreciate at more than 4% a year. And we all hope the shares will do far better than that. Apple have the potential to make a real killing simply on the buyback, quite separate to their current profits.
Apple's huge buyback of outstanding shares is an outstandingly good use of their cash. It's a luxury that all companies would wish for. And it's a long-term play. If you have $150 billion languishing in a bank account earning 4% a year (to be generous), by buying back shares, you are betting that the shares will appreciate at more than 4% a year. Of course, Apple doesn't just keep all its cash in a bank account, but it's hardly much of a gamble to think that the shares will appreciate at more than 4% a year. And we all hope the shares will do far better than that. Apple have the potential to make a real killing simply on the buyback, quite separate to their current profits.
Most companies aren't so undervalued. Amazon wouldn't even consider this move. Apple gets to own more of itself and investors get a boost in value of their stock, although I'm sure some only see dividends as the only way for Apple to give them something back on their stock. And unlike dividends which a customer my use as cash or to even buy a competitor's stock buybacks directly increase the value of the remaining stock.
Something else to consider is Tim Cook set this up with what is essentially "insider trading" since he knows what's coming down the pipe and when. These changes sound like Tim is playing a brilliant game of chess and, IMO, all the pieces are now in position to win the game. All things considered I think Apple being a trillion dollar company could happen within a few years if they do release a new product category this year.
That's not how it works. Apple doesn't own any of itself, it can't. Some shares may be held for award to staff as options, but that's not the same thing. If Apple buys and retires shares then that simply means the remaining shareholders own a slightly bigger piece of the Apple pie.
That's not how it works. Apple doesn't own any of itself, it can't. Some shares may be held for award to staff as options, but that's not the same thing. If Apple buys and retires shares then that simply means the remaining shareholders own a slightly bigger piece of the Apple pie.
What do you think would effectively happen if a company were to buy back every outstanding share?
So, how after spending billions over the last few years, how much of 'Apple' does Apple own? How many shares do they have, how many shares are available?...
That depends on whether they were retired or held as treasury shares. The article says these shares were "retired", so Apple doesn't own them because they just no longer exist.
That depends on whether they were retired or held as treasury shares. The article says these shares were "retired", so Apple doesn't own them because they just no longer exist.
When they first announced the buyback I had thought I had read they were going to retire most of them but keep a few for employees.
What do you think would effectively happen if a company were to buy back every outstanding share?
Logically that's practically impossible. How would a company be able to afford to buy back its entire value? Where would the money come from? It would never happen in the real world.
For example, if Apple did this, then that final share would be worth hundreds of billions of dollars; their complete market cap of asset value, brand value, future profit estimate value, plus any cash and minus debt. Meanwhile Apple probably has little cash available, having used it all up, and no one would lend Apple money to buy back that share, because it's a ridiculous thing to do, a ridiculous amount of money, plus not legal under most company law. In addition, what have Apple done? They've effectively taken the company private but just put it in the hands of the one person who held on for the longest, since that remaining shareholder now has absolute ownership of the company (realistically this would have happened long before the final share). Plus there's no way Apple could force that last holdout to sell the share.
People who talk about Apple taking the company private don't seem to realise that if the company went private it'd be due to an outside influence, not Apple, and would very possibly be a bad move for the company. Someone has to own a company, and if you're talking about a $600bn company going private, that someone has to have $600bn dollars. In the unlikelihood event of that ever happening, only a large coalition or a country could afford that.
You're saying it's impossible for a company to ever have enough money to repurchase it's market value? You're saying it's impossible for a company to go from being public to private?
That's not what going from public to private means. People buy a company and take it private. Companies don't buy themselves. Buying shares to retire them is not the same as buying them for ownership.
And the idea of a company having free cash that exceeds its market value is a bit weird. Market value includes free cash, so the remaining assets of the company would have to be zero, or negative. It wouldn't be completely impossible, because the company may have taken on debt to raise the free cash, but it's pretty damn unlikely for most companies.
That's not what going from public to private means. People buy a company and take it private. Companies don't buy themselves. Buying shares to retire them is not the same as buying them for ownership.
And the idea of a company having free cash that exceeds its market value is a bit weird. Market value includes free cash, so the remaining assets of the company would have to be zero, or negative. It wouldn't be completely impossible, because the company may have taken on debt to raise the free cash, but it's pretty damn unlikely for most companies.
So who controls the money in Apple's coffers if it's not Apple? How can Apple buy anything if, by your words, it doesn't own anything? How can Apple do a buyback of shares if it's impossible for it to buy anything because it has nothing? The terms are pretty simple: buy + back. The former refers to a purchase and the latter refers to re-obtaining. What do you think actually happens to that $90 billion Apple uses for the buyback? Do you really think Apple gets nothing in return? And if Apple can't own anything how they can possibly be in control of the stock to either retire it or distribute it to employee and board members?
Comments
What is the benefit as somebody would have to be the owner? Apple can't own itself.
If the shares are about to be split to 7-1 does that mean that my dividend payment will be 7 times greater?
Or, will the dividend be reduced accordingly
hmm
I won't be complaining anymore about Apple being shareholder unfriendly. How was I to know what Apple was going to do until I see the results? I certainly thought Apple was going to botch another quarter but fortunately I was wrong. I'm sure everyone must have been surprised about the 7 for 1 split. As a shareholder, I'm being left clueless. The only thing I was hopeful of was that Apple was buying back shares as the stock went down and down and down. However, if I don't see any results I tend to get cranky and whiney. I'm finally starting to see results and now I have no reason to complain. Apple's stock movement seems out of kilter with the rest of the tech stocks and the stock market in general. So, it's rather annoying to see all the other tech stocks moving upward while Apple is moving downward. I personally don't have much confidence in Tim Cook because he seems too non-aggressive towards rival companies. I'm sure Apple has some products in the pipeline and that should be a given since hardware is their bread and butter.
Apple is overflowing with cash and in my view, I'd prefer acquisitions to buybacks because I'm looking for additional revenue streams if the iPhone is unable to carry Apple forward. I don't feel comfortable with Apple relying mainly on one product when that particular market appears saturated. I won't be griping for the rest of the year as long as there's at least a little forward motion of Apple's share price. I'm not even expecting a return to $700 a share but I would like to see Apple hit at least $600 with increased dividends and I'll be satisfied. In other words, I'm only asking Apple's share price to perform at least as well as other tech stocks. I don't see how that's too much to ask for. I will sit back quietly and let Tim Cook have his chance and hopefully he will prove himself capable of being Apple's CEO.
If you thought Apple was being shareholder-unfriendly despite buybacks and dividends, I'm afraid you have no idea what it means to be shareholder-unfriendly. The Googles and Facebooks hold the first-place trophy. Google split its stock a year ago in a weird way in which they created a new class of shares called Class C shares that carry no voting power. As it is, Class A shares don't have the same voting rights as Class B shares, which are held by the founders. Class C shares hold no voting power, whatsoever. There exists stock like that, called preferred stock. However, in exchange for giving up voting rights, preferred stockholders get priority with dividend payments and rank higher than common stockholders in event of bankruptcy. Class C shares give stockholders nothing whatsoever. Google basically wants their money for nothing. In fact, the shareholders had to sue the company to force them to put some token protections in the deal. Google even said that they were doing it to protect the company from outside influences in order to focus on the long-term health of the company. This was the language used in CEO Larry Page's letter outlining the plan. I am wracking my brains to think of a more condescending piece of communications to a group of people who are investing money in the company. Google basically wants the benefits of being public while retaining all the rights of a private corporation.
After seeing what Google did, I can't understand how anyone could think Apple is being shareholder-unfriendly in anyway. While Apple's peers have gone as far as painting their shareholders as villains, Apple has been far more friendly to shareholders.
"Apple's capital return program, focused on buying back stock, does appear to have had a favorable impact on Apple's share price. After spending $44 billion on stock buybacks over the past four quarters, Apple's stock has risen 29.2 percent or $129.28, a contribution that moved the company's market cap from $392 billion a year ago to $492 billion today, even as the company removed 80 million shares from circulation."
Apple spent:
$44 Billion cost of stock buybacks
Apple got:
$100 Billion rise in market cap
That is what I meant in my earlier post, buy low, sell high. I did not literally mean Apple was selling the repurchased shares, I was alluding to the general principal of getting something for less, then having it be worth more.
Why was it worth less? The Analysts and CNBC and Kramer et all are significantly responsible for creating the fear and panic that caused AAPL to dip.
Pick that apart and criticize it as you will, there may be some flaws, but the basic concept is truthful and correct.
Paging Constable Odo... Constable Odo, to the stock value thread...
HA! Sometimes you guys just kill me with your <sarcasm/>!
1) $18 billion in the US isn't overflowing.
2) It would take a very usual purchase in the US for Apple to want to bring a large chunk of their overseas holdings back to the states because of the insane taxation they'll have to pay despite having already paid the applicable taxes for that nation. As a shareholder do you really want that? Isn't that capital gains tax at a rate of 39.6% which means bringing back $100 billion to The States makes they lose $20 billion? TWENTY BILLION?! If that percentage is even close to being accurate I can't imagine a shareholder waning that to happen.
You think Apple does? You do make it sounds like they don't care about any of their other products despite kicking ass across the board. You also seem to have this "if I am not aware of it it must not exist" attitude. By age 2 Object Permanance occurs so I think you should trust that Apple is looking out for its best interests and that there heavily increased R&D spending is because they have some ideas on the line they believe are truly going to be good for business.
Most companies aren't so undervalued. Amazon wouldn't even consider this move. Apple gets to own more of itself and investors get a boost in value of their stock, although I'm sure some only see dividends as the only way for Apple to give them something back on their stock. And unlike dividends which a customer my use as cash or to even buy a competitor's stock buybacks directly increase the value of the remaining stock.
Something else to consider is Tim Cook set this up with what is essentially "insider trading" since he knows what's coming down the pipe and when. These changes sound like Tim is playing a brilliant game of chess and, IMO, all the pieces are now in position to win the game. All things considered I think Apple being a trillion dollar company could happen within a few years if they do release a new product category this year.
What do you think would effectively happen if a company were to buy back every outstanding share?
So, how after spending billions over the last few years, how much of 'Apple' does Apple own? How many shares do they have, how many shares are available?...
That depends on whether they were retired or held as treasury shares. The article says these shares were "retired", so Apple doesn't own them because they just no longer exist.
When they first announced the buyback I had thought I had read they were going to retire most of them but keep a few for employees.
What do you think would effectively happen if a company were to buy back every outstanding share?
Logically that's practically impossible. How would a company be able to afford to buy back its entire value? Where would the money come from? It would never happen in the real world.
For example, if Apple did this, then that final share would be worth hundreds of billions of dollars; their complete market cap of asset value, brand value, future profit estimate value, plus any cash and minus debt. Meanwhile Apple probably has little cash available, having used it all up, and no one would lend Apple money to buy back that share, because it's a ridiculous thing to do, a ridiculous amount of money, plus not legal under most company law. In addition, what have Apple done? They've effectively taken the company private but just put it in the hands of the one person who held on for the longest, since that remaining shareholder now has absolute ownership of the company (realistically this would have happened long before the final share). Plus there's no way Apple could force that last holdout to sell the share.
People who talk about Apple taking the company private don't seem to realise that if the company went private it'd be due to an outside influence, not Apple, and would very possibly be a bad move for the company. Someone has to own a company, and if you're talking about a $600bn company going private, that someone has to have $600bn dollars. In the unlikelihood event of that ever happening, only a large coalition or a country could afford that.
You're saying it's impossible for a company to ever have enough money to repurchase it's market value? You're saying it's impossible for a company to go from being public to private?
That's not what going from public to private means. People buy a company and take it private. Companies don't buy themselves. Buying shares to retire them is not the same as buying them for ownership.
And the idea of a company having free cash that exceeds its market value is a bit weird. Market value includes free cash, so the remaining assets of the company would have to be zero, or negative. It wouldn't be completely impossible, because the company may have taken on debt to raise the free cash, but it's pretty damn unlikely for most companies.
Why? A company isn’t made of people? Tim Cook, then, couldn’t buy Apple and take it private?
What about buying ALL the shares to retire ALL the shares?
Wouldn’t need to, would it? Just equal.
So who controls the money in Apple's coffers if it's not Apple? How can Apple buy anything if, by your words, it doesn't own anything? How can Apple do a buyback of shares if it's impossible for it to buy anything because it has nothing? The terms are pretty simple: buy + back. The former refers to a purchase and the latter refers to re-obtaining. What do you think actually happens to that $90 billion Apple uses for the buyback? Do you really think Apple gets nothing in return? And if Apple can't own anything how they can possibly be in control of the stock to either retire it or distribute it to employee and board members?