Einhorn is a brilliant guy, it's hilarious reading these posts. Not sure that I agree with his proposal or his lawsuit, but he is making Apple do something with the cash and it is going to result in a net benefit to shareholders, both in terms of getting money back and getting a better valuation on the stock.
Einhorn is a brilliant guy, it's hilarious reading these posts. Not sure that I agree with his proposal or his lawsuit, but he is making Apple do something with the cash and it is going to result in a net benefit to shareholders, both in terms of getting money back and getting a better valuation on the stock.
Quite a few flaws with your claims:
1. Einhorn's proposal doesn't help 'shareholders'. It would only help a limited number of the shareholders. Most shareholders would not benefit from his proposal.
2. If the shareholders want preferred stock, they can do it even under Apple's proposal. Einhorn's proposal is to take the decision out of the hands of shareholders and give it to management. How is that 'pro-shareholder'?
3. In the long run, dividends do not have any significant impact on shareholder value. When a company gives away $10 B in dividends, it reduces the value of the company by roughly that amount. The "value" of giving dividends is largely psychological and doesn't really add value.
Dividends are the only way to get a return on your investment without selling part of your stake. Of course shareholders covet them, for good reason.
The bolded section makes this a tautology.
In reality, receiving a dividend of $100 or selling $100 worth of stock with no dividends amounts to essentially the same thing. When a company distributes a dividend, it's book value drops - which is ultimately reflected in the share value. It's largely a wash.
In reality, receiving a dividend of $100 or selling $100 worth of stock with no dividends amounts to essentially the same thing. When a company distributes a dividend, it's book value drops - which is ultimately reflected in the share value. It's largely a wash.
It's good financial practice to receive cash flow from an investment. Do you have a job? Would you be happy if your salary just went back into the business to make it more valuable? What you're essentially saying is that there is no benefit to receiving an annual salary, biweekly paycheque, whatever.
It may technically be a "wash" but it has a huge impact on investor sentiment.
It's good financial practice to receive cash flow from an investment. Do you have a job? Would you be happy if your salary just went back into the business to make it more valuable? What you're essentially saying is that there is no benefit to receiving an annual salary, biweekly paycheque, whatever.
If you own the business (as shareholders do) and don't need the money, a lot of owners take little or no salary - because the salary is taxed at high rates and if you put the money back into the business, it is not (until you sell, when it is taxed at lower capital gains rates or if you die and leave it to your heirs in which case millions of dollars of equity is tax free).
It may technically be a "wash" but it has a huge impact on investor sentiment.
I already acknowledged that it has a large psychological value-particularly for a stock with a high price like AAPL (since most people don't own enough shares to easily sell 2% a year).
But that doesn't change the fact that it is just psychology and has no real effect on the true value.
If you own the business (as shareholders do) and don't need the money, a lot of owners take little or no salary - because the salary is taxed at high rates and if you put the money back into the business, it is not (until you sell, when it is taxed at lower capital gains rates or if you die and leave it to your heirs in which case millions of dollars of equity is tax free).
Your example is not even close to the same thing.
I already acknowledged that it has a large psychological value-particularly for a stock with a high price like AAPL (since most people don't own enough shares to easily sell 2% a year).
But that doesn't change the fact that it is just psychology and has no real effect on the true value.
Granted, but what if you do need the money (as most probably do)? I expect to hold AAPL for a long time, and I will eventually want a steady increasing cash flow. Undoubtedly there are many today who are in my future position.
Granted, but what if you do need the money (as most probably do)? I expect to hold AAPL for a long time, and I will eventually want a steady increasing cash flow. Undoubtedly there are many today who are in my future position.
Sorry, but 2% per year is not a significant amount. If you have 20 shares ($10,000), that's $200 per year. Hardly enough to justify buying the stock.
Hedge Funds are responsible for the stock tanking since October, and now the chief of one of these funds has the audacity to sue Apple because they want the milk the company even more.
As an AAPL shareholder since 1999 (never selling a single share from that time to now), I cast my vote against Einhorn. Stop holding me hostage, Greenlight Capital.
It's good financial practice to receive cash flow from an investment. Do you have a job? Would you be happy if your salary just went back into the business to make it more valuable? What you're essentially saying is that there is no benefit to receiving an annual salary, biweekly paycheque, whatever.
It may technically be a "wash" but it has a huge impact on investor sentiment.
Apple shares rise to put the company in no.1 spot without the need to pay for dividend. Your argument is flawed.
Apple shares rise to put the company in no.1 spot without the need to pay for dividend. Your argument is flawed.
In fact, the shares have fallen since the dividend was implemented. While I doubt that the dividend caused the drop, it clearly shows that the "stocks rise when there is a dividend" argument is flawed.
Actually, he doesn't even have that justification. There are no preferred shares today and Apple has no intent of issuing any. So the new proposal doesn't really change anything.
I would not be surprised to see the case thrown out because he can't show any harm. Since there are no preferred shares and no plans to issue preferred shares, he loses nothing by Apple making it harder to issue preferred shares. Unless he can show that Apple's actions have harmed him, he has no case - and it could get thrown out on those grounds.
This will be quite a surprise IMO: The judge indicates that he's leaning towards accepting Greenlight's argument, saying "Candidly I do think the likelihood of success is in favor for Greenlight..."
Comments
Patrick Bateman.
Quote:
Originally Posted by sflocal
No it's not, so go f**k yourself you greedy little pr!ck.
Guy's a full-blown short-seller, got burned for making bad calls on those "investments", now is trying cut his losses by squeezing more from Apple.
As an AAPL owner, I would tell the guy if he doesn't like the way Apple is running shop, sell your shares and go away.
But not until he's been slapped by each one of us!
Who's first?
An I say this as an AAPL owner.
Quite a few flaws with your claims:
1. Einhorn's proposal doesn't help 'shareholders'. It would only help a limited number of the shareholders. Most shareholders would not benefit from his proposal.
2. If the shareholders want preferred stock, they can do it even under Apple's proposal. Einhorn's proposal is to take the decision out of the hands of shareholders and give it to management. How is that 'pro-shareholder'?
3. In the long run, dividends do not have any significant impact on shareholder value. When a company gives away $10 B in dividends, it reduces the value of the company by roughly that amount. The "value" of giving dividends is largely psychological and doesn't really add value.
Folks like this will be the death of Apple. smh
The bolded section makes this a tautology.
In reality, receiving a dividend of $100 or selling $100 worth of stock with no dividends amounts to essentially the same thing. When a company distributes a dividend, it's book value drops - which is ultimately reflected in the share value. It's largely a wash.
Interesting possibilities:
http://en.wikipedia.org/wiki/Ira_Einhorn
Cheers
Quote:
Originally Posted by Suddenly Newton
Alcohol. You need more.
That's usually the case.
It's good financial practice to receive cash flow from an investment. Do you have a job? Would you be happy if your salary just went back into the business to make it more valuable? What you're essentially saying is that there is no benefit to receiving an annual salary, biweekly paycheque, whatever.
It may technically be a "wash" but it has a huge impact on investor sentiment.
If you own the business (as shareholders do) and don't need the money, a lot of owners take little or no salary - because the salary is taxed at high rates and if you put the money back into the business, it is not (until you sell, when it is taxed at lower capital gains rates or if you die and leave it to your heirs in which case millions of dollars of equity is tax free).
Your example is not even close to the same thing.
I already acknowledged that it has a large psychological value-particularly for a stock with a high price like AAPL (since most people don't own enough shares to easily sell 2% a year).
But that doesn't change the fact that it is just psychology and has no real effect on the true value.
Granted, but what if you do need the money (as most probably do)? I expect to hold AAPL for a long time, and I will eventually want a steady increasing cash flow. Undoubtedly there are many today who are in my future position.
Sorry, but 2% per year is not a significant amount. If you have 20 shares ($10,000), that's $200 per year. Hardly enough to justify buying the stock.
http://appleinsider.com/articles/13/02/14/huge-selloff-by-hedge-funds-bruised-apple-stock-in-the-winter-quarter
Hedge Funds are responsible for the stock tanking since October, and now the chief of one of these funds has the audacity to sue Apple because they want the milk the company even more.
As an AAPL shareholder since 1999 (never selling a single share from that time to now), I cast my vote against Einhorn. Stop holding me hostage, Greenlight Capital.
Quote:
Originally Posted by bonky
It's good financial practice to receive cash flow from an investment. Do you have a job? Would you be happy if your salary just went back into the business to make it more valuable? What you're essentially saying is that there is no benefit to receiving an annual salary, biweekly paycheque, whatever.
It may technically be a "wash" but it has a huge impact on investor sentiment.
Apple shares rise to put the company in no.1 spot without the need to pay for dividend. Your argument is flawed.
In fact, the shares have fallen since the dividend was implemented. While I doubt that the dividend caused the drop, it clearly shows that the "stocks rise when there is a dividend" argument is flawed.
Quote:
Originally Posted by jragosta
Actually, he doesn't even have that justification. There are no preferred shares today and Apple has no intent of issuing any. So the new proposal doesn't really change anything.
I would not be surprised to see the case thrown out because he can't show any harm. Since there are no preferred shares and no plans to issue preferred shares, he loses nothing by Apple making it harder to issue preferred shares. Unless he can show that Apple's actions have harmed him, he has no case - and it could get thrown out on those grounds.
This will be quite a surprise IMO: The judge indicates that he's leaning towards accepting Greenlight's argument, saying "Candidly I do think the likelihood of success is in favor for Greenlight..."
http://newsandinsight.thomsonreuters.com/Legal/News/2013/02_-_February/Greenlight_shows__likelihood_of_success__against_Apple_-judge/
That's a bizarre comment for a judge to make at a hearing.
Normally, they'd just say,"ok you've got a point. Lets test it." Or words to that effect.
To say that you're leaning one way or the other ahead of the trial. Bizarre.
What about the SEC ? They approved the so called "bundle".
Irreparable harm to Greenlight ? You gotta be kidding me - shouldn't even be a consideration.