Apple's valuation will fall to less than $3 trillion for the worst reasons

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  • Reply 41 of 42
    mayflymayfly Posts: 385member
    Xed said:
    mayfly said:
    What if Apple is buying back stock in order to kill it so that sooner or later it will take itself private?

    From what I can see Apple's stock has been manipulated regularly based on rumours and innuendo instead of actual product releases. What if Apple is sick and tired of idiot analysts that are trying to ruin Apple's reputation?

    Going private also makes huge sense for Apple. If there is no financial benefit to leaking Apple products before release then Apple can once again "WOW" people rather than have the rug pulled from underneath their feet.

    Of course, what if some of those senseless rumours that have been released to drive down Apple's stock is Apple's doing to be able to buy more back for cheaper? Thus allowing their move to private to happen sooner? That one would be dodgy because that's insider trading but if Apple was to go private then would they be beholden to SEC governance?

    But I don't know because I'm not a stock guy but Apple could very well be in a position to remove itself from the stock exchange and do whatever the hell it wants without being answerable to anyone.

    Is it possible?
    A publicly traded company cannot "take itself private." Existing shareholders own the company. A buyback of a few million shares per quarter is one thing. Buying the entire company in this case would require raising just shy of $3 Trillion, and by whom? What investment group, hedge fund or lender group has that capacity? And do you want Apple Inc. to be owned by a trio of JP Morgan, Goldman Sachs and Morgan Stanley? Not me.
    It's not going to happen, but I don't think Apple would have to raise that much. They have deep coffers and they could probably borrow a great deal simply based on their earnings and other investments. Those that backed Musk to buy Twitter will never see their money, but those that would be willing to back Apple would be fine. That said, it's not going to happen.
    You're right, it won't. But Apple does have to repurchase every single share or the $3 Trillion worth owned by current shareholders. I wouldn't let mine go for the current price. I'd want at LEAST a 35-50% premium. Neither would most shareholders. $3-5 Trillion dollars is probably more than the total assets of the top 25 investment banks in the world. COMBINED.

    So I'm calling this one impossible. And no one, but no one, wants to see Apple owned by a bunch of investment banks, whose only concern is quarterly results and servicing the $3-4 Trillion in debt they incurred in the purchase.
    FileMakerFeller
  • Reply 42 of 42
    doggone said:
    gatorguy said:
    Apple has continuously been buying back stock for the last seven years, and
    retiring most of it...
    Hasn't every share acquired under the repurchase program been retired? They can, of course, create new shares someday and sell them, but AFAIK every share in Apple's Repurchase Program has been effectively burned, it no longer exists. 
    In the early days of the buy-back they did some other things with a small portion of the shares they re-acquired. For the last four years, as far as I can tell, every share has been completely retired.

    When I say "most of it," that's like conservatively 96% have been retired.
    Buybacks do retire shares.  But also remember Apple employees have a share option program. Those shares have to be reserved somehow particularly for the bonus programs for executives.  I remember reading a while ago that Apple will announce when they carve out a portion of the shares for this. I don’t know if they create new shares or simply buy existing ones on the open market.  
    Most employees will keep the shares as option so to avoid paying taxes when redeemed. This will not increase total shares. 
    these r stock options they cant be kept they do expire and employees have the option to either buy them at issue price or sell them. and options have very very high tax rate 

    Also if u look at the basic formula for finding the valuation of the ANY company the stock price would be around $70 given the fact there is negative growth. and the dynamics of the smatphone industry is also changing. google has had 1000% growth in pixel phones(google hardware sales r already 50billion for the yr) during the time iphone has been flat to negative and this is effecting everyone including samsung and even cheapo moto  and tcl and if google got more  aggressive with marketing by say hiring ex tmobile ceo it will be very hard for everyone 
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