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?
In my words? I didn't say that at all. Apple controls the money in Apple's coffers. Apple owns all of Apple's assets. But they do not own the company as a legal institution. A company cannot own itself.
Quote:
Originally Posted by SolipsismX
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?
The $90 billion obviously goes into the trading accounts of the shareholders that Apple buys the shares from. Where else would it go?
In terms of Apple, they get one of two things, depending on what they do with the shares bought back:
If they retain them then they get a pool of stock to award to staff as bonus incentives. They don't retain stock for any other reason.
If they retire them then they reduce the outstanding share pool, which reduces Apple's dividend burden, and increases proprtionate ownership for the remaining shareholders.
Other than that, I'm not sure what you're getting at; what do you think they get, beyond these two things?
If they retire them then they reduce the outstanding share pool, which reduces Apple's dividend burden, and increases proprtionate ownership for the remaining shareholders.
Right, as has been explained.
Now back on point, you suggested Apple doesn't own anything. I'm curious why you believe that. You also skated my hypothetical about a company repurchasing all outstanding shares which you claimed was "impossible."
Overall you are still failing to understand that a buyback is a reacquisition by a company of its own stock by distributing cash to existing shareholders in exchange for a fraction of the company's outstanding equity. Again, if Apple doesn't own anything how can they possibly do any of this?
Why? A company isn’t made of people? Tim Cook, then, couldn’t buy Apple and take it private?
Tim Cook the legal entity is not the same as Apple the legal entity. And he definitely doesn't have enough money.
Quote:
Originally Posted by Tallest Skil
What about buying ALL the shares to retire ALL the shares?
Pretty much a nonsensical statement. if all the shares get retired then ownership gets retired and the company ceases to exist. You don't need to retire all the shares to take a company private, you centralise enough of them under single ownership.
Quote:
Originally Posted by Tallest Skil
Wouldn’t need to, would it? Just equal.
Yeah, sure, ok. But even as a theoretical exercise when we're talking on the scale of $600 billion dollars then having exactly the right amount of free cash is rather a delicate balancing act. Plus, spending all your free cash on a bizarre ownership push would be reckless in the extreme. In practice you'd need to exceed the market cap (well technically I think 80% is the mark for when a single owner can delist a company from the stock exchange, so you'd need to exceed 80%).
You implied there was some reason for Apple buying back share that I wasn't aware of. I was just being clear about what I was saying.
Quote:
Originally Posted by SolipsismX
Right, as has been explained.
Now back on point, you suggested Apple doesn't own anything. I'm curious why you believe that. You also skated my hypothetical about a company repurchasing all outstanding shares which you claimed was "impossible."
Overall you are still failing to understand that a buyback is a reacquisition by a company of its own stock by distributing cash to existing shareholders in exchange for a fraction of the company's outstanding equity. Again, if Apple doesn't own anything how can they possibly do any of this?
When did I suggest Apple doesn't own anything? I suggested that Apple the legal entity cannot own itself as a legal entity, it has to have shareholders (public or private), and they cannot themselves be a shareholder (except for in the temporary instance of retaining shares for award to staff as bonuses and incentives). Sure Apple the legal entity can own other things, cash, plant, other companies, contracts etc.
I'm pretty sure in the past few pages I've explained the notion of the buyback to drblank myself, and hopefully quite well, so I'm not sure why you're claiming that I don't understand this. But the reacquisition of stock by Apple is not for self ownership purposes on any drive towards taking the company private, it is for one of the two reasons I highlighted above, for staff incentives, or to retire the stock and increase proportional ownership amongst the remaining shareholders. Neither of which in any way increases Apple's ownership of itself, because it doesn't own itself, not at all.
Yeah, I know. That’s why they’d give it to him and the other executives. Because if a company can’t privatize itself and only people can…
It's conceivable that Apple would issue the stock they buy back to Tim Cook and the other executives. But if that happens at any significant volume then the remaining shareholders are going to have a pretty major problem with it.
I’m just picturing someone pressing a button, confirming the repurchase of the last share, and then suddenly this happens:
Nothing quite so dramatic, but sure. A company is a legal construct and needs to have an owner (or owners). No owner, no company.
Quote:
Originally Posted by Tallest Skil
And so the people with outstanding shares are just supposed to… what? Go along with it? Even when they don’t want to?
Pretty much yeah. If you own 20% of something and someone else owns 80% you pretty much have to go along with what they want; they can even force you to sell to them if they want. Not my rules.
Nope. Squeeze outs are legal in most jurisdictions, including most Western economies and most (maybe all, I don't know every state law) US states. They depend on a high ownership of the majority shareholder, 90% normally, and sometimes have other conditions too, but are an established and entirely legal part of company ownership, so a lawsuit would go precisely nowhere.
Squeeze outs are legal in most jurisdictions, including most Western economies and most (maybe all, I don't know every state law) US states. They depend on a high ownership of the majority shareholder, 90% normally, and sometimes have other conditions too, but are an established and entirely legal part of company ownership, so a lawsuit would go precisely nowhere.
That really bothers me. Thanks for the info, though.
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?
Or, will the dividend be reduced accordingly
Comments
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?
In my words? I didn't say that at all. Apple controls the money in Apple's coffers. Apple owns all of Apple's assets. But they do not own the company as a legal institution. A company cannot own itself.
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?
The $90 billion obviously goes into the trading accounts of the shareholders that Apple buys the shares from. Where else would it go?
In terms of Apple, they get one of two things, depending on what they do with the shares bought back:
Other than that, I'm not sure what you're getting at; what do you think they get, beyond these two things?
No one said they did. That's your invention.
Right, as has been explained.
Now back on point, you suggested Apple doesn't own anything. I'm curious why you believe that. You also skated my hypothetical about a company repurchasing all outstanding shares which you claimed was "impossible."
Overall you are still failing to understand that a buyback is a reacquisition by a company of its own stock by distributing cash to existing shareholders in exchange for a fraction of the company's outstanding equity. Again, if Apple doesn't own anything how can they possibly do any of this?
Why? A company isn’t made of people? Tim Cook, then, couldn’t buy Apple and take it private?
Tim Cook the legal entity is not the same as Apple the legal entity. And he definitely doesn't have enough money.
What about buying ALL the shares to retire ALL the shares?
Pretty much a nonsensical statement. if all the shares get retired then ownership gets retired and the company ceases to exist. You don't need to retire all the shares to take a company private, you centralise enough of them under single ownership.
Wouldn’t need to, would it? Just equal.
Yeah, sure, ok. But even as a theoretical exercise when we're talking on the scale of $600 billion dollars then having exactly the right amount of free cash is rather a delicate balancing act. Plus, spending all your free cash on a bizarre ownership push would be reckless in the extreme. In practice you'd need to exceed the market cap (well technically I think 80% is the mark for when a single owner can delist a company from the stock exchange, so you'd need to exceed 80%).
Tim Cook the legal entity is not the same as Apple the legal entity. And he definitely doesn't have enough money.
Yeah, I know. That’s why they’d give it to him and the other executives. Because if a company can’t privatize itself and only people can…
Wh…
" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />
I’m just picturing someone pressing a button, confirming the repurchase of the last share, and then suddenly this happens:
And so the people with outstanding shares are just supposed to… what? Go along with it? Even when they don’t want to?
No one said they did. That's your invention.
You implied there was some reason for Apple buying back share that I wasn't aware of. I was just being clear about what I was saying.
Right, as has been explained.
Now back on point, you suggested Apple doesn't own anything. I'm curious why you believe that. You also skated my hypothetical about a company repurchasing all outstanding shares which you claimed was "impossible."
Overall you are still failing to understand that a buyback is a reacquisition by a company of its own stock by distributing cash to existing shareholders in exchange for a fraction of the company's outstanding equity. Again, if Apple doesn't own anything how can they possibly do any of this?
When did I suggest Apple doesn't own anything? I suggested that Apple the legal entity cannot own itself as a legal entity, it has to have shareholders (public or private), and they cannot themselves be a shareholder (except for in the temporary instance of retaining shares for award to staff as bonuses and incentives). Sure Apple the legal entity can own other things, cash, plant, other companies, contracts etc.
I'm pretty sure in the past few pages I've explained the notion of the buyback to drblank myself, and hopefully quite well, so I'm not sure why you're claiming that I don't understand this. But the reacquisition of stock by Apple is not for self ownership purposes on any drive towards taking the company private, it is for one of the two reasons I highlighted above, for staff incentives, or to retire the stock and increase proportional ownership amongst the remaining shareholders. Neither of which in any way increases Apple's ownership of itself, because it doesn't own itself, not at all.
Quote:
Yeah, I know. That’s why they’d give it to him and the other executives. Because if a company can’t privatize itself and only people can…
It's conceivable that Apple would issue the stock they buy back to Tim Cook and the other executives. But if that happens at any significant volume then the remaining shareholders are going to have a pretty major problem with it.
Quote:
Wh…
" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />
I’m just picturing someone pressing a button, confirming the repurchase of the last share, and then suddenly this happens:
Nothing quite so dramatic, but sure. A company is a legal construct and needs to have an owner (or owners). No owner, no company.
Quote:
Originally Posted by Tallest Skil
And so the people with outstanding shares are just supposed to… what? Go along with it? Even when they don’t want to?
Pretty much yeah. If you own 20% of something and someone else owns 80% you pretty much have to go along with what they want; they can even force you to sell to them if they want. Not my rules.
…they can even force you to sell to them if they want.
No.
No.
Yes.
http://www.investorwords.com/6930/squeeze_out.html
Lawsuit.
Nope. Squeeze outs are legal in most jurisdictions, including most Western economies and most (maybe all, I don't know every state law) US states. They depend on a high ownership of the majority shareholder, 90% normally, and sometimes have other conditions too, but are an established and entirely legal part of company ownership, so a lawsuit would go precisely nowhere.
That really bothers me. Thanks for the info, though.