What other posters stated that making more money than you can spend means you have no ideas to foster?
Check Gordon90s post. You obviously fail at reading comprehension...
The stock buyback plan and dividend increase now on the other hand kind of means that "hey we don't have any ideas how to develop great new products so we just hand you out our extra cash and a percentage of our earnings since we won't need it anymore". This more or less means that this exponential growth is over which on the other hand means that this needs to be priced in by the market, i.e. huge drop in the stock price we saw in the last months.
There are many other parmeters that determine the value of a stock price like future earnings and growth opportunities. Since AAPL had high exponential growth over a far longer period than any other company it stock kind of priced in that perpetual high growth.
The stock buyback plan and dividend increase now on the other hand kind of means that "hey we don't have any ideas how to develop great new products so we just hand you out our extra cash and a percentage of our earnings since we won't need it anymore". This more or less means that this exponential growth is over which on the other hand means that this needs to be priced in by the market, i.e. huge drop in the stock price we saw in the last months.
So the theoretical share gain from a buy back in destroyed by repricing in the future growth of AAPL.
The first part of this is correct and insightful. That is, the reason Apple's price has fallen over the past year is because investors have realized that Apple's profits can't keep growing as they have. There was a bit of an AAPL bubble as investors (apparently) assumed that Apple would keep growing at an increasing rate.
Having said that, everyone has already accepted the reality of a super successful Apple, making billions in profits (just not having those profits grow exponentially). That company is worth (apparently) $400+/share rather than $700+/share. Apple acknowleging that having $100 billion in the bank is sufficient and basically paying the rest to investors won't and hasn't affected investor sentiment--except in a good way. Look at the share price since this plan was announced. Up 10% in a week. That's hardly a catastrophe.
Check Gordon90s post. You obviously fail at reading comprehension...
<span style="color:rgb(24,24,24);font-family:arial, helvetica, sans-serif;line-height:18.200000762939453px;">The stock buyback plan and dividend increase now on the other hand kind of means that "hey we don't have any ideas how to develop great new products so we just hand you out our extra cash and a percentage of our earnings since we won't need it anymore". This more or less means that this exponential growth is over which on the other hand means that this needs to be priced in by the market, i.e. huge drop in the stock price we saw in the last months.</span>
Again you're making false claims. You're both being irrational to claim that making more money than you can spend in a given time frame means you have no ideas. If what you say is true then there will no new products to come this year, next year and so on as that would be a results of a new idea. In fact, this article is proof that Apple has new ideas the bond is very new to Apple as they haven't done it since before Steve returned to Apple.
The first part of this is correct and insightful. That is, the reason Apple's price has fallen over the past year is because investors have realized that Apple's profits can't keep growing as they have. There was a bit of an AAPL bubble as investors (apparently) assumed that Apple would keep growing at an increasing rate.
I wouldn't presume investors to be rational. Apple's P/E is low, and was even at the peak. In comparison, Amazon almost doesn't make money and the lemmings still own their stock at unrealistic prices.
3. Your math is correct, except that when you do a stock buyback you reduce the pool of shares that get frequently traded. Apple is buying back a huge chunk (hopefully almost half) of the 300 million share pool, which will dry up available shares on the market and have more than the effect you would expect.
Becoming a supply and demand issue, thus raising the share price. The savings on dividends must be huge also.
So why can't Apple buy it's shares back in foreign markets?
That Russian guy just bought $100 million... did he have to pay US tax on that money to get AAPL shares?
Take this with a grain of salt, but if I am remembering correctly if they buy them in a foreign market with the intention of retiring the stock they are still not moving those funds to the US without the tax penalty.
The stock buyback plan and dividend increase now on the other hand kind of means that "hey we don't have any ideas how to develop great new products so we just hand you out our extra cash and a percentage of our earnings since we won't need it anymore".
A blind person would believe that, yeah. Are you a blind person?
The first part of this is correct and insightful. That is, the reason Apple's price has fallen over the past year is because investors have realized that Apple's profits can't keep growing as they have. There was a bit of an AAPL bubble as investors (apparently) assumed that Apple would keep growing at an increasing rate.
Having said that, everyone has already accepted the reality of a super successful Apple, making billions in profits (just not having those profits grow exponentially). That company is worth (apparently) $400+/share rather than $700+/share. Apple acknowleging that having $100 billion in the bank is sufficient and basically paying the rest to investors won't and hasn't affected investor sentiment--except in a good way. Look at the share price since this plan was announced. Up 10% in a week. That's hardly a catastrophe.
I'm talking long term. That Apple would buy back shares and issue dividends in the first place was announced in march of 2012. The stock peaked a few short months after that. You can also find studies that show that high growth is in most cases over once companies start paying out dividends.
But I mean most compagnies are cutting back on CapEx (capital expenditures) and boosting dividends... Time will tell if that's a good idea! (In my opinion not!)
Quote:
Originally Posted by SolipsismX
Again you're making false claims. You're both being irrational to claim that making more money than you can spend in a given time frame means you have no ideas. If what you say is true then there will no new products to come this year, next year and so on as that would be a results of a new idea. In fact, this article is proof that Apple has new ideas the bond is very new to Apple as they haven't done it since before Steve returned to Apple.
Well let's put it that way, what great ideas had Apple in the last year or so? bigger screen for the iphone, smaller iPad display, a retina display for the iPad and the MacBook (Im' not saying that I don't love the display of my iPad and of Retina Macbook). I agree that these mind blowing ideas did not cost billions to develop.
And that's exactly the problem, these are no really new things... Every 5 year old somewhat-apple-fan could have predicted these changes.
And the worst part is that Apple still refuses to just make one critical change: a 4.7 or 5 inch screen on a phone. To put it in Tim Cook's words: "Apple won't launch bigger iPhone until trade-offs can be avoided".
Which trade-offs? In the mean time they have lost me (and I believe many others) as a phone customer (which just happens to be their most profitable business...). I hope it won't be in there other segments too... (I'm currently a S3 owner and preordered the S4; trust me everyone loving jailbreak tweets would fall from sky by all the possibilities you get now using default android settings!)
Quote:
Originally Posted by JeffDM
I wouldn't presume investors to be rational. Apple's P/E is low, and was even at the peak. In comparison, Amazon almost doesn't make money and the lemmings still own their stock at unrealistic prices.
Well Apple's P/E is a very complicated one. Take into account that at least until the iPhone 6 / 5S comes out Apple has definitely lost the edge in their phone business. Losing the edge on a product that has on average 70% margin and your discounted future earnings take a hit big time. I wouldn't be so sure about Apple's future edge in other segments too. Those Google Chrome book look very innovating too for exemple.
If that's the case you can kiss your 40% net margin good bye. Landing at for exemple 20% margin with same sales volume cuts your earnings in half in no time! (And that's not to unrealistic, expect the iphone all Apple products have margins of about 25%.)
Check my posting history; I have repeatedly stated I want to jump back into the iPhone realm. But won't until they make a bigger screen. My post was not a troll post but exactly my opinion. If I jumped to the wrong conclusion then post your thoughts rather than just insulting me.
How about an LTE iPad mini then? Bigger screen and no expensive voice contract.
So why can't Apple buy it's shares back in foreign markets?
That Russian guy just bought $100 million... did he have to pay US tax on that money to get AAPL shares?
Theoretically, Apple could, since it would probably be no different from using the foreign cash to buy a non-US company (as Microsoft did with Skype). But they would have to keep the shares abroad for subsequent spending (or re-issue against employee stock options) abroad. If they used it for something back home, it might incur a tax bill.
My guess is that there is not a lot of AAPL that trades abroad. I think almost all of it trades on US exchanges. The Russian guy probably bought it on a US stock exchange (anyone can do that, as long that person's home country allows it).
I'm wondering... why has no one more knowledgable about finance explained what the impact of a $60Bn share buy back is?
Perhaps the way it works is that Apple borrows money to buy back stock and increase dividends because they can't bring their dollars back to the States without paying US income tax on it. That way they write off the interest on the loan to save on taxes while not touching their own cash.
Share buy back usually increases share price because it indicates that the management views the stock as undervalued based on what they know about the company's plans. It is sort of like legal insider trading.
[quote name="Gordon90s" url="/t/157282/apples-six-part-bond-offering-could-be-largest-in-history#post_2319229"]Well let's put it that way, what great ideas had Apple in the last year or so? bigger screen for the iphone, smaller iPad display, a retina display for the iPad and the MacBook (Im' not saying that I don't love the display of my iPad and of Retina Macbook). I agree that these mind blowing ideas did not cost billions to develop.
And that's exactly the problem, these are no really new things... Every 5 year old somewhat-apple-fan could have predicted these changes.[/QUOTE]
First of all, your assertion that there are no new ideas being hatched at Apple if you can't see them is pretty fucking ignorant. Even a 2 year old has a concept of [URL=http://en.wikipedia.org/wiki/Object_permanence]object permanence[/URL].
Secondly, in the last year we've had the Retina iPad, Retina MBPs, new iMacs, iPad mini, and the most dramatic change the iPhone has ever seen. There are clearly many other things but those are just the main HW products that come to mind.
Third, how fucking myopic do you have to be to only count something like display size, while ignoring how the display is designed and made, or any other of the groundbreaking ideas that Apple has clearly incorporated to make their products better? Seriously! :no:
Finally, what kind of timeframe is "in the last year or so?" Did you claim that Apple had no ideas between 2001 and 2007 when they only had the iPod and Mac product categories? Did you claim that Apple had nothing in the works between 2007 and 2010 because they didn't release a brand new product category every fucking year? Of course not, because you'r goal is only to spread FUD by claiming you know the unknown.
[QUOTE]And the worst part is that Apple still refuses to just make one critical change: a 4.7 or 5 inch screen on a phone. To put it in Tim Cook's words: "Apple won't launch bigger iPhone until trade-offs can be avoided".[/QUOTE]
And Apple has a great history of balancing tradeoffs so that usability is as good as possible for the state of the art. When you have a company that attracts buyers who are attracted to a spec sheet jargon over the user experience you simply don't have that focus. That said, it looks like Samsung finally wants to copy Apple in the ways that matter; well, at least in quality and feel.
Bottom line: your claim that Apple has zero ideas they're developing because they make more money than they spend despite a major increase in R&D for this year is completely baseless FUD.
Looks like the bond issue is going to be massively oversubscribed (3x), and Apple will get a great coupon rate (some predicting even better than AAA corporate rates): http://on.wsj.com/ZUfi9Z
Comments
Quote:
Originally Posted by SolipsismX
What other posters stated that making more money than you can spend means you have no ideas to foster?
Check Gordon90s post. You obviously fail at reading comprehension...
The stock buyback plan and dividend increase now on the other hand kind of means that "hey we don't have any ideas how to develop great new products so we just hand you out our extra cash and a percentage of our earnings since we won't need it anymore". This more or less means that this exponential growth is over which on the other hand means that this needs to be priced in by the market, i.e. huge drop in the stock price we saw in the last months.
Quote:
Originally Posted by Gordon90s
There are many other parmeters that determine the value of a stock price like future earnings and growth opportunities. Since AAPL had high exponential growth over a far longer period than any other company it stock kind of priced in that perpetual high growth.
The stock buyback plan and dividend increase now on the other hand kind of means that "hey we don't have any ideas how to develop great new products so we just hand you out our extra cash and a percentage of our earnings since we won't need it anymore". This more or less means that this exponential growth is over which on the other hand means that this needs to be priced in by the market, i.e. huge drop in the stock price we saw in the last months.
So the theoretical share gain from a buy back in destroyed by repricing in the future growth of AAPL.
The first part of this is correct and insightful. That is, the reason Apple's price has fallen over the past year is because investors have realized that Apple's profits can't keep growing as they have. There was a bit of an AAPL bubble as investors (apparently) assumed that Apple would keep growing at an increasing rate.
Having said that, everyone has already accepted the reality of a super successful Apple, making billions in profits (just not having those profits grow exponentially). That company is worth (apparently) $400+/share rather than $700+/share. Apple acknowleging that having $100 billion in the bank is sufficient and basically paying the rest to investors won't and hasn't affected investor sentiment--except in a good way. Look at the share price since this plan was announced. Up 10% in a week. That's hardly a catastrophe.
Again you're making false claims. You're both being irrational to claim that making more money than you can spend in a given time frame means you have no ideas. If what you say is true then there will no new products to come this year, next year and so on as that would be a results of a new idea. In fact, this article is proof that Apple has new ideas the bond is very new to Apple as they haven't done it since before Steve returned to Apple.
I wouldn't presume investors to be rational. Apple's P/E is low, and was even at the peak. In comparison, Amazon almost doesn't make money and the lemmings still own their stock at unrealistic prices.
Quote:
Originally Posted by e1618978
3. Your math is correct, except that when you do a stock buyback you reduce the pool of shares that get frequently traded. Apple is buying back a huge chunk (hopefully almost half) of the 300 million share pool, which will dry up available shares on the market and have more than the effect you would expect.
Becoming a supply and demand issue, thus raising the share price. The savings on dividends must be huge also.
Quote:
Originally Posted by studiomusic
So why can't Apple buy it's shares back in foreign markets?
That Russian guy just bought $100 million... did he have to pay US tax on that money to get AAPL shares?
I am wondering the same thing
Wow, if I ever have stock questions, I'm coming here. We have some really smart investors on this site!
Thanks to all who have given such great answers!!
Take this with a grain of salt, but if I am remembering correctly if they buy them in a foreign market with the intention of retiring the stock they are still not moving those funds to the US without the tax penalty.
Originally Posted by Ex iPhone Owner
The stock buyback plan and dividend increase now on the other hand kind of means that "hey we don't have any ideas how to develop great new products so we just hand you out our extra cash and a percentage of our earnings since we won't need it anymore".
A blind person would believe that, yeah. Are you a blind person?
Quote:
Originally Posted by malax
The first part of this is correct and insightful. That is, the reason Apple's price has fallen over the past year is because investors have realized that Apple's profits can't keep growing as they have. There was a bit of an AAPL bubble as investors (apparently) assumed that Apple would keep growing at an increasing rate.
Having said that, everyone has already accepted the reality of a super successful Apple, making billions in profits (just not having those profits grow exponentially). That company is worth (apparently) $400+/share rather than $700+/share. Apple acknowleging that having $100 billion in the bank is sufficient and basically paying the rest to investors won't and hasn't affected investor sentiment--except in a good way. Look at the share price since this plan was announced. Up 10% in a week. That's hardly a catastrophe.
I'm talking long term. That Apple would buy back shares and issue dividends in the first place was announced in march of 2012. The stock peaked a few short months after that. You can also find studies that show that high growth is in most cases over once companies start paying out dividends.
But I mean most compagnies are cutting back on CapEx (capital expenditures) and boosting dividends... Time will tell if that's a good idea! (In my opinion not!)
Quote:
Originally Posted by SolipsismX
Again you're making false claims. You're both being irrational to claim that making more money than you can spend in a given time frame means you have no ideas. If what you say is true then there will no new products to come this year, next year and so on as that would be a results of a new idea. In fact, this article is proof that Apple has new ideas the bond is very new to Apple as they haven't done it since before Steve returned to Apple.
Well let's put it that way, what great ideas had Apple in the last year or so? bigger screen for the iphone, smaller iPad display, a retina display for the iPad and the MacBook (Im' not saying that I don't love the display of my iPad and of Retina Macbook). I agree that these mind blowing ideas did not cost billions to develop.
And that's exactly the problem, these are no really new things... Every 5 year old somewhat-apple-fan could have predicted these changes.
And the worst part is that Apple still refuses to just make one critical change: a 4.7 or 5 inch screen on a phone. To put it in Tim Cook's words: "Apple won't launch bigger iPhone until trade-offs can be avoided".
Which trade-offs? In the mean time they have lost me (and I believe many others) as a phone customer (which just happens to be their most profitable business...). I hope it won't be in there other segments too... (I'm currently a S3 owner and preordered the S4; trust me everyone loving jailbreak tweets would fall from sky by all the possibilities you get now using default android settings!)
Quote:
Originally Posted by JeffDM
I wouldn't presume investors to be rational. Apple's P/E is low, and was even at the peak. In comparison, Amazon almost doesn't make money and the lemmings still own their stock at unrealistic prices.
Well Apple's P/E is a very complicated one. Take into account that at least until the iPhone 6 / 5S comes out Apple has definitely lost the edge in their phone business. Losing the edge on a product that has on average 70% margin and your discounted future earnings take a hit big time. I wouldn't be so sure about Apple's future edge in other segments too. Those Google Chrome book look very innovating too for exemple.
If that's the case you can kiss your 40% net margin good bye. Landing at for exemple 20% margin with same sales volume cuts your earnings in half in no time! (And that's not to unrealistic, expect the iphone all Apple products have margins of about 25%.)
Quote:
Originally Posted by Ex iPhone Owner
Check my posting history; I have repeatedly stated I want to jump back into the iPhone realm. But won't until they make a bigger screen. My post was not a troll post but exactly my opinion. If I jumped to the wrong conclusion then post your thoughts rather than just insulting me.
How about an LTE iPad mini then? Bigger screen and no expensive voice contract.
Quote:
Originally Posted by studiomusic
So why can't Apple buy it's shares back in foreign markets?
That Russian guy just bought $100 million... did he have to pay US tax on that money to get AAPL shares?
Theoretically, Apple could, since it would probably be no different from using the foreign cash to buy a non-US company (as Microsoft did with Skype). But they would have to keep the shares abroad for subsequent spending (or re-issue against employee stock options) abroad. If they used it for something back home, it might incur a tax bill.
My guess is that there is not a lot of AAPL that trades abroad. I think almost all of it trades on US exchanges. The Russian guy probably bought it on a US stock exchange (anyone can do that, as long that person's home country allows it).
Add: Looks like AAPL is only traded on NASDAQ.
Quote:
Originally Posted by realpaulfreeman
I'm wondering... why has no one more knowledgable about finance explained what the impact of a $60Bn share buy back is?
Perhaps the way it works is that Apple borrows money to buy back stock and increase dividends because they can't bring their dollars back to the States without paying US income tax on it. That way they write off the interest on the loan to save on taxes while not touching their own cash.
Share buy back usually increases share price because it indicates that the management views the stock as undervalued based on what they know about the company's plans. It is sort of like legal insider trading.
And that's exactly the problem, these are no really new things... Every 5 year old somewhat-apple-fan could have predicted these changes.[/QUOTE]
First of all, your assertion that there are no new ideas being hatched at Apple if you can't see them is pretty fucking ignorant. Even a 2 year old has a concept of [URL=http://en.wikipedia.org/wiki/Object_permanence]object permanence[/URL].
Secondly, in the last year we've had the Retina iPad, Retina MBPs, new iMacs, iPad mini, and the most dramatic change the iPhone has ever seen. There are clearly many other things but those are just the main HW products that come to mind.
Third, how fucking myopic do you have to be to only count something like display size, while ignoring how the display is designed and made, or any other of the groundbreaking ideas that Apple has clearly incorporated to make their products better? Seriously! :no:
Finally, what kind of timeframe is "in the last year or so?" Did you claim that Apple had no ideas between 2001 and 2007 when they only had the iPod and Mac product categories? Did you claim that Apple had nothing in the works between 2007 and 2010 because they didn't release a brand new product category every fucking year? Of course not, because you'r goal is only to spread FUD by claiming you know the unknown.
[QUOTE]And the worst part is that Apple still refuses to just make one critical change: a 4.7 or 5 inch screen on a phone. To put it in Tim Cook's words: "Apple won't launch bigger iPhone until trade-offs can be avoided".[/QUOTE]
And Apple has a great history of balancing tradeoffs so that usability is as good as possible for the state of the art. When you have a company that attracts buyers who are attracted to a spec sheet jargon over the user experience you simply don't have that focus. That said, it looks like Samsung finally wants to copy Apple in the ways that matter; well, at least in quality and feel.
Bottom line: your claim that Apple has zero ideas they're developing because they make more money than they spend despite a major increase in R&D for this year is completely baseless FUD.
Quote:
Originally Posted by studiomusic
So why can't Apple buy it's shares back in foreign markets?
That Russian guy just bought $100 million... did he have to pay US tax on that money to get AAPL shares?
Great question!
Quote:
Originally Posted by jd_in_sb
Quote:
Originally Posted by studiomusic
So why can't Apple buy it's shares back in foreign markets?
That Russian guy just bought $100 million... did he have to pay US tax on that money to get AAPL shares?
Great question!
See #33 above.
Quote:
Originally Posted by Tallest Skil
A blind person would believe that, yeah. Are you a blind person?
Why do you have such a negative attitude towards people unfortunate enough to be blind?
Looks like the bond issue is going to be massively oversubscribed (3x), and Apple will get a great coupon rate (some predicting even better than AAA corporate rates): http://on.wsj.com/ZUfi9Z
Originally Posted by cnocbui
Why do you have such a negative attitude towards people unfortunate enough to be blind?
Do you have an actual response, or are you honestly of the belief that I meant blind in the sense of vision.
Quote:
Originally Posted by Tallest Skil
Originally Posted by cnocbui
Why do you have such a negative attitude towards people unfortunate enough to be blind?
Do you have an actual response, or are you honestly of the belief that I meant blind in the sense of vision.
Sometimes, it is better to recognize that one was sounding offensive (even if inadvertently), apologize, and move on.