Apple's plan to purchase shares overtime will increase the stability of the stock and slowly allow it to increase. I'm sure if Apple purchased $150B tomorrow there would be a massive gain then a sharp plummet as everyone cashed out only to start the up down cycle again. This purchase would also likely mean the end on dividends. I prefer the sustainable increase in stock value and dividends than the one time increase not matter how massive that might be.
Finally someone with reason. Its like people see a Wall Street guy and assume he's always a crook.
I'm all for using the cash to acquire companies. But Apple can't just sit on the cash and do nothing with it. In this ZERO interest rate environment the shareholders are literally losing BILLIONS of dollars a month because the cash is lying dormant in Money market accounts.
You mean as opposed to shareholders losing billions of dollars by making interest payments on an $150B loan? Or alternatively, losing tens of billions of dollars in taxes for repatriating foreign cash? It's these losses that would actually be "LITERAL". You're misusing the word "literally", keeping the cash in the bank is not a "literal" loss, it's an opportunity loss. But even so, give all that money back to the shareholders and they'll more than likely squander it away, Apple has a much better track record at being fiscally responsible than the average American citizen (or even institutions for that matter). In reality it's probably a much smaller opportunity cost than the very real cost of making interest payments or paying the repatriation tax.
All Carl's 'wonderful' advice has ever done is plunder companies for his personal benefit and wreck them. Thousands if not millions of people unemployed as a result of it. It is in Apple's best interest is to do the opposite of what this scumbag suggests.
So the board and CEO/CFO can only focus on one thing at a time? Beyond ridiculous. Its not impossible to run an innovative business AND have a good capital allocation plan. IBM has been doing this for decades. Warren Buffet has been doing this for decades.
First go talk to any company that Icahn did this to in the past where he gets some level of control over stock. Then used this to influence what the company does, and before you know they management spends more time dealing with him than focusing on what the company should be doing. He claims to help company and he keeps staying he helped so many companies but never cite any examples of a company which is far better today because he was a concerned investor. He destroyed Motorola, it is no longer a giant in the market, why because management spent more time dealing with him verse trying to figure out how to deal with Apple and the various treats they were coming at them. He was more interest in them splitting and selling pieces of the company so he could make a 20% to 30% return in a short period of time.
If Icahn was long on apple I believe is return will be greater, but he is only interested get a short term gain so he can use that money to mess with another company. Warren Buffet does not do that, he actually goes after company which are hurting and get them turned around, that is what he richer than Icahn and Warren Buffet son is worth more than Icahn because they see things longer term not the fast buck.
Bravo. I have a small stake (300 shares) and I'll vote yes to $150B buyback.
Let the shareholders decide.
One reason I have invested (2000 shares) in Apple is I like the way they run the business and their long term focus - so I don't favor someone like Icahn with his self interest gains to be applying pressure on the board. I'd rather see Apple keep working the way they are than some short term gain I might see. The world doesn't need another run of the mill company out there.
Tim Cook never should have given him the time of day. Steve Jobs would never have taken this guy's call much less "have lunch" with him. Carl Icahn may have made a recent windfall from Netflix but he also took it in the shorts with Blockbuster (long after everyone else bailed out) and let's not forget - this man bankrupted Marvel. MARVEL!
I would love to see this 'plan' and what they will do with $800,000,000,000 in the next 10 years.
You went from projecting 700Bn to projecting 800Bn in cash and marketable securities over ten years. I hope that's not how you balance your household budget. Also, yours is an "ideal" projection-like my taking out a 10 year second mortgage for 33% of the value of my home because I anticipate ten years of additional paychecks down the line. What happens if I get laid-off or if the economy collapses? That's the problem with arguments such as yours and which led directly to the last economic collapse.
Greed has a way of creating overly-optimistic projections about future earnings and investment appreciation. Get a clue. Apple knows full-well how strategies such as what you suggest have a way of weakening its position in the market, making the company more susceptible to being raided by outside investors or competitors.
I suggest you divest your holdings in AAPL and invest your earnings in a growth stock.
Good point. But neither Tim nor the Board of Directors own Apple. The shareholders do and they have a right to demand a captial allocation plan that benefits shareholder value.
In theory, that is not wrong. In practice, what do shareholders really own beyond shares? I can tell you one thing - if the company takes on debt to do what Icahn wants, shareholders will NOT have first dips on Apple's shares.
Yes, shareholders have a right to demand something. It is rare, however, that shareholders get their wishes when they contradict management's plans. A company has to be in a weak position for that to happen. Apple is not in a weak position. It is particularly rare for shareholders to force a company to alter its capital allocation plan unless someone does what Carl Icahn does.
This is why I am really interested in seeing this evolve. It is very fitting that iCahn takes on the iPhone maker.
Perhaps Lauren Jobs should write an 'Open Letter' to Tim pointing out she owns 8% of Apple's shares and damn sight more than Icahn and urge him not to give the greedy prick the time of day.
Quote:
Bill Gross, manager of the world’s largest mutual fund, said fellow billionaire investor Carl Icahn should stop pushing Apple Inc. (AAPL) for additional share buybacks.
“Icahn should leave Apple alone and spend more time like Bill Gates,” Gross, who runs the $250 billion Pimco Total Return Fund (PTTRX) at Pacific Investment Management Co. in Newport Beach, California, wrote in a message on Twitter today. “If Icahn’s so smart, use it to help people not yourself.”
Look what happened with Google purchasing Motorolla. The purchase price was $20B and they are losing $1B each year. Its not easy to make a big strategic purchase. Most times it loses the company billions.
Unless Apple was buying Tesla a big purchase makes no sense.
Its not one man's view. If there is a proxy all the shareholders will vote whats best for the company. Thats the way it should be.
Personally I'll vote for the buyback. Just look at the numbers:
In 10 years Apple will have $700B in cash
WTF are they going to do with all that cash?
It should go back to the investors in dividends and buybacks if they don't have any good use of it. Just from inflation alone Apple would be losing $25B a year just sitting on the cash.
Of course you don't mind that 35% of what Apple brings back (from overseas) will go directly to the government in taxes.
I concur that buying back shares at this price is a good use of free cash. I think most investors do. I hope the buyers were aggressive on the recent dip.
However, there is authorization for 100 BB already. The only reason to preannounce 150 would seem to me to be improve the sentiment around the stock in a shorter term than the scheduled buyback.
It is Apple's style to say what they mean and mean what they say. They don't do "vaporware" or "preannounce." However, recent wildly swinging general investor hysteria has already caused Cook to let the level of "leaks" increase, not to hype the products but to squelch some of the irrational speculation. So if the intention is to continue buybacks, and if another 50 seems like a sure thing, there might not be much harm in announcing some compromise amount.
Increasing the buyback authorization would also send a strong signal of confidence on the part of the board and management that free cash flow was strongly expected to continue at a high rate. That can't be bad for the stock.
Honestly, I don't think it's going to make that much difference in the long run, except that any shares that can be pulled off the market at these levels will just further benefit long term investors down the road if the company continues to succeed. And it's not going to have any effect on the day traders except to make them pony up a bit more capital.
Icahn is after some improved returns for medium term traders. He wants to pull cash down to a level more justified by business needs, benefit from being a holder through that period, and then quite possibly plan to exit.
Tim Cook and the team are probably giving this more serious consideration than a lot of the posters. Let's keep it polite and rational please. The nation has enough reality TV type trash talk around important affairs as it is. There is no reason for sane investors to pump it up further.
Tesla is the company Apple should buy. Elon Musk then comes aboard as a the company visionary. Jony designing new cars and rockets. Tim managing the whole company properly so Apple can blast off into space-X
Comments
Finally someone with reason. Its like people see a Wall Street guy and assume he's always a crook.
I'm all for using the cash to acquire companies. But Apple can't just sit on the cash and do nothing with it. In this ZERO interest rate environment the shareholders are literally losing BILLIONS of dollars a month because the cash is lying dormant in Money market accounts.
You mean as opposed to shareholders losing billions of dollars by making interest payments on an $150B loan? Or alternatively, losing tens of billions of dollars in taxes for repatriating foreign cash? It's these losses that would actually be "LITERAL". You're misusing the word "literally", keeping the cash in the bank is not a "literal" loss, it's an opportunity loss. But even so, give all that money back to the shareholders and they'll more than likely squander it away, Apple has a much better track record at being fiscally responsible than the average American citizen (or even institutions for that matter). In reality it's probably a much smaller opportunity cost than the very real cost of making interest payments or paying the repatriation tax.
Why did Carl invest in Apple if he didn't trust Apple to make good decisions? If he doesn't wants to keep his money in his pocket he should do it.
All Carl's 'wonderful' advice has ever done is plunder companies for his personal benefit and wreck them. Thousands if not millions of people unemployed as a result of it. It is in Apple's best interest is to do the opposite of what this scumbag suggests.
So the board and CEO/CFO can only focus on one thing at a time? Beyond ridiculous. Its not impossible to run an innovative business AND have a good capital allocation plan. IBM has been doing this for decades. Warren Buffet has been doing this for decades.
First go talk to any company that Icahn did this to in the past where he gets some level of control over stock. Then used this to influence what the company does, and before you know they management spends more time dealing with him than focusing on what the company should be doing. He claims to help company and he keeps staying he helped so many companies but never cite any examples of a company which is far better today because he was a concerned investor. He destroyed Motorola, it is no longer a giant in the market, why because management spent more time dealing with him verse trying to figure out how to deal with Apple and the various treats they were coming at them. He was more interest in them splitting and selling pieces of the company so he could make a 20% to 30% return in a short period of time.
If Icahn was long on apple I believe is return will be greater, but he is only interested get a short term gain so he can use that money to mess with another company. Warren Buffet does not do that, he actually goes after company which are hurting and get them turned around, that is what he richer than Icahn and Warren Buffet son is worth more than Icahn because they see things longer term not the fast buck.
Bravo. I have a small stake (300 shares) and I'll vote yes to $150B buyback.
Let the shareholders decide.
One reason I have invested (2000 shares) in Apple is I like the way they run the business and their long term focus - so I don't favor someone like Icahn with his self interest gains to be applying pressure on the board. I'd rather see Apple keep working the way they are than some short term gain I might see. The world doesn't need another run of the mill company out there.
I would love to see this 'plan' and what they will do with $800,000,000,000 in the next 10 years.
You went from projecting 700Bn to projecting 800Bn in cash and marketable securities over ten years. I hope that's not how you balance your household budget. Also, yours is an "ideal" projection-like my taking out a 10 year second mortgage for 33% of the value of my home because I anticipate ten years of additional paychecks down the line. What happens if I get laid-off or if the economy collapses? That's the problem with arguments such as yours and which led directly to the last economic collapse.
Greed has a way of creating overly-optimistic projections about future earnings and investment appreciation. Get a clue. Apple knows full-well how strategies such as what you suggest have a way of weakening its position in the market, making the company more susceptible to being raided by outside investors or competitors.
I suggest you divest your holdings in AAPL and invest your earnings in a growth stock.
Why did Carl invest in Apple if he didn't trust Apple to make good decisions? If he doesn't wants to keep his money in his pocket he should do it.
This has nothing to do with whether Apple makes good decisions or not. He is following his well-rehearsed and oft-repeated script.
Good point. But neither Tim nor the Board of Directors own Apple. The shareholders do and they have a right to demand a captial allocation plan that benefits shareholder value.
Perhaps Lauren Jobs should write an 'Open Letter' to Tim pointing out she owns 8% of Apple's shares and damn sight more than Icahn and urge him not to give the greedy prick the time of day.
Bill Gross, manager of the world’s largest mutual fund, said fellow billionaire investor Carl Icahn should stop pushing Apple Inc. (AAPL) for additional share buybacks.
“Icahn should leave Apple alone and spend more time like Bill Gates,” Gross, who runs the $250 billion Pimco Total Return Fund (PTTRX) at Pacific Investment Management Co. in Newport Beach, California, wrote in a message on Twitter today. “If Icahn’s so smart, use it to help people not yourself.”
Bravo Bill!
Look what happened with Google purchasing Motorolla. The purchase price was $20B and they are losing $1B each year. Its not easy to make a big strategic purchase. Most times it loses the company billions.
Unless Apple was buying Tesla a big purchase makes no sense.
Its not one man's view. If there is a proxy all the shareholders will vote whats best for the company. Thats the way it should be.
Personally I'll vote for the buyback. Just look at the numbers:
In 10 years Apple will have $700B in cash
WTF are they going to do with all that cash?
It should go back to the investors in dividends and buybacks if they don't have any good use of it. Just from inflation alone Apple would be losing $25B a year just sitting on the cash.
Of course you don't mind that 35% of what Apple brings back (from overseas) will go directly to the government in taxes.
Perhaps Lauren Jobs should write
How does the commenter know Ms. Jobs' opinion?
I concur that buying back shares at this price is a good use of free cash. I think most investors do. I hope the buyers were aggressive on the recent dip.
However, there is authorization for 100 BB already. The only reason to preannounce 150 would seem to me to be improve the sentiment around the stock in a shorter term than the scheduled buyback.
It is Apple's style to say what they mean and mean what they say. They don't do "vaporware" or "preannounce." However, recent wildly swinging general investor hysteria has already caused Cook to let the level of "leaks" increase, not to hype the products but to squelch some of the irrational speculation. So if the intention is to continue buybacks, and if another 50 seems like a sure thing, there might not be much harm in announcing some compromise amount.
Increasing the buyback authorization would also send a strong signal of confidence on the part of the board and management that free cash flow was strongly expected to continue at a high rate. That can't be bad for the stock.
Honestly, I don't think it's going to make that much difference in the long run, except that any shares that can be pulled off the market at these levels will just further benefit long term investors down the road if the company continues to succeed. And it's not going to have any effect on the day traders except to make them pony up a bit more capital.
Icahn is after some improved returns for medium term traders. He wants to pull cash down to a level more justified by business needs, benefit from being a holder through that period, and then quite possibly plan to exit.
Tim Cook and the team are probably giving this more serious consideration than a lot of the posters. Let's keep it polite and rational please. The nation has enough reality TV type trash talk around important affairs as it is. There is no reason for sane investors to pump it up further.
And I'll be sure to vote that against your intentions on the Proxy.
Unless Apple was buying Tesla a big purchase makes no sense.
I think Disney or Time Warner could be considered. Just sayin'
Tesla is the company Apple should buy. Elon Musk then comes aboard as a the company visionary. Jony designing new cars and rockets. Tim managing the whole company properly so Apple can blast off into space-X