As long as the pe remains below 15 it is attractive. I would never want to jiggle the hand on the wheel when so much is going right. Apple shareholders of over 10 years have every reason to expect the price to drop by half on a regular basis. This company innovates. They need the cash to make the way smooth when they are pushing a new product out that literally billions of people will buy. Supply chain control reguires cash and guts. The innovation causes cash flow to fluctuate. Wall street hates this, and they can go piss off. I have never sent in a proxy vote before. I will be voting against this.
As long as the pe remains below 15 it is attractive. I would never want to jiggle the hand on the wheel when so much is going right. Apple shareholders of over 10 years have every reason to expect the price to drop by half on a regular basis. This company innovates. They need the cash to make the way smooth when they are pushing a new product out that literally billions of people will buy. Supply chain control reguires cash and guts. The innovation causes cash flow to fluctuate. Wall street hates this, and they can go piss off. I have never sent in a proxy vote before. I will be voting against this.
"Supply chain control reguires cash and guts."
Does it require cash & guts to the tune of $150 billion sitting in the bank? Apple can pay for their capital expenditures with the cash flow they earn every quarter.
The most valuable franchise in the NFL is $2.3 BILLION
The average is half
The owner built the stadium in a location without any MASS transportation
He charges$75.00 to park
Can you imagine the current BOD or TIm Cook making that kind of decision?
We miss you Steve Jobs, the last entrepreneur at Apple
Put Jerry Jones on the board
Seriously? The current BoD is overseeing the most valuable company in the world w/o Jerry's help. Jerry plays second fiddle to no one and he can't get out of his own way.
Its a great idea but don't think it matters. Im sure they plan on buying back more than 50B regardless. I think he's just trying to hurry it up a bit as anyone can see the stock is undervalued at current levels.
Read about the stadium and the other uses including Paul McCathy . Why is the franchise so valuable given the performance of the team? Can you imagine Apple management thinking outside the box? Winning football games is apparently not that important to the value of his franchise
Read about the stadium and the other uses including Paul McCathy . Why is the franchise so valuable given the performance of the team?
Can you imagine Apple management thinking outside the box?
Winning football games is apparently not that important to the value of his franchise
Good point. He would probably be better suited to be on the board at Amazon.
[quote name="sog35" url="/t/161378/preliminary-apple-proxy-filing-details-carl-icahns-50b-stock-buyback-plan-up-for-shareholder-vote/30#post_2450582"]Everyone here who is against the buyback is saying the same thing:
Icahn is GREEDY so he must be wrong.
Give us GOOD reasons why not to do a buyback when Apple is at historically low valuations (14 PE) and historically low interest rates to float a bond.
Again don't just say Icahn is greedy. Thats not a good reason. Show me stats and figures."
Back out the cash and AAPL trades at a 9.92 multiple, while AMZN trades at 1,429 multiple ($400/0.28 EPS) and is trying a new version of Webvan with visions of drone delivery. Bizzare.
I complain about Cook, but for no good reason other than his "Grandpa" image (recreate cool-kid next gen Justin Long!
Onviously, Cook has to be one of the world's most genius operations guru to ever walk the planet, genuinely loved SJ, got China Mobile signed on AAPL terms I speculate, AND in time for 5s AND 5c AND iPad Air & Mini, Mac Pro and the list goes on! Yet AAPL is not considered a growth company as they've just been handed the keys to China? That's absurd...the fact AAPL was even down $8/share this week is pure hedge fund manipulation. Instead of buying shares those guys just sell calls and quit buying...many no different than Einhorn or Ichan. They are all in it together, thus Job's intense disdain for Wall Street. Can't live with'em, can't live without'em
The current stock buyback program + dividend program is biggest in history, complete it in Q1, then split the stock 20-1 and hopefully give actual AAPL enthusiasts a chance at owning more stock.
Who knows, but at the moment the reason(s) AAPL is not trading at a fairly conservative 20X PE is ludicrous to me and would make the price of AAPL $792 right now. Their margins should be fine, and AAPL will thrive in China, 5c included...supplying 500M iPhones alone will be the challenge.
At least Ichan and Einhorn are good for puttin pressure on manage because 1% on $150B nearly dormant cash is as stupid as their current stock price.
C'mon Cook, you've showed us your operational brilliance, now how about "one more thing" or one thing we didn't expect?
Changing the subject, do not forget to watch the Kennedy Center Awards on Sunday night. It is only broadcast once, and if you miss it there are no DVDs
@sog35 I agree with sog35 - his reasoning is logical and sound, and I'll be voting to support increasing the buyback. I don't have all that many shares, though, but I agree that it creates value, especially with interest rates below the dividend yield. Just:
1) borrow the money
2) buyback and retire the shares
3) don't pay dividends on the retired shares
4) use the saved dividend money to pay the interest on the bond. And step 5) will be instant profit. (The instant profit will be the difference between the bond yield and the dividend yield)
Pro tip: don't forget to take the interest paid tax deductions for extra profit
It's non-binding, so don't expect too much out of it either if it passes or fails. I think whichever happens, Apple wouldn't do exactly what the resolution says, but that's no big deal. The original plan was to change nothing anyway. But I do think that a bigger step towards that direction will actually create wealth for all shareholders, both short term and long term. Buybacks lowers PE (a good thing) and gets rid of excess cash (that otherwise cannot be reinvested in the core business or something equivalent performing like what Warren Buffett does)
Or Apple could just buy more patent portfolios and lay the smack down on Google I guess.
Trust the Board? Same wonderful Board that fired Steve Jobs?
Please stop spreading BS!
First of all, it is NOT the same Board that fired Steve. It is the Board that Steve hired! Second of all, Icahn, is it you? Third, yes I trust the board and the executive team that led Apple to where it is now. The most valuable company on earth.
All this talk about money is precisely what types like Carl would like to see. Apple has the capabilities to do something exceptional and interesting and maybe even contribute to a better world. What would happen for example if Apple remade the electric car and used its attention for detail, it's exceptional design and superior software to make revolutionair new hardware that's affordable for almost anyone? That would be something, phones and computers are one thing but real hardware like cars, planes (maybe space planes) are something else. Money is boring, achieving something exceptional is the real aim.
I think Icahn is a finance guy and sees Apple strictly as a corporation - an instrument for giving investors as good a return as possible on their investment. In that narrow sense he may be right about what to do with the money. But the people who work there (including the CEO) see it more as an instrument of positive change in the world (primarily technological but social too), in which case a big pile of money can come in very handy.
A decrease in share count means each share represents a larger percentage of the company. For example if there were 100 shares available and you owned 10 shares you would own 10% of the company. If a buyback purchases 50 shares then you would own 20% of the company. You would have 20% stake in all of Apple's assets. As far as stock price it should go up also since Earnings PER SHARE will go up since there are less shares outstanding.
There are also very good reasons to start a $50B buyback this fiscal year:
1. Interest rates are near all time lows. We won't be able to say that in a year or two.
2. Apple's stock price is severely under-valued
3. Apple pays a 2% dividend
4. Apple has over $150B in cash and generates $50B free cash flows a year
5. The $150B cash is generating 1% returns
Unless Apple is planning on making acquisitions of over $150B in the next 12 months I see no reason for them to continue to hoard the cash. Even if they payout $50B in buybacks they still will have $150B at the end of 2014. Floating a bond at today's interest rates would cost Apple basically ZERO. They would not have to pay the 2% dividend and would be able to write off the interest expense.
I hold 300 shares of Apple stock and I will vote yes to the buyback
The only way the Buyback is a bad idea is if LONG-TERM you think the stock will be worth less than $560. If that's the case you should just sell your shares and invest in something else.
Agreed. There is very little downside to a larger buyback if you think Apple is worth more then $560. If you think it is worth less you should sell or short AAPL.
I own AAPL shares and would also like to see the 50B in 2014 buyback. Just the savings on the dividend makes it worth it, with the less shares being outstanding a (huge) bonus. The buyback is the best way to deal with a Wall Street that does not properly value AAPL.
Comments
As long as the pe remains below 15 it is attractive. I would never want to jiggle the hand on the wheel when so much is going right. Apple shareholders of over 10 years have every reason to expect the price to drop by half on a regular basis. This company innovates. They need the cash to make the way smooth when they are pushing a new product out that literally billions of people will buy. Supply chain control reguires cash and guts. The innovation causes cash flow to fluctuate. Wall street hates this, and they can go piss off. I have never sent in a proxy vote before. I will be voting against this.
"Supply chain control reguires cash and guts."
Does it require cash & guts to the tune of $150 billion sitting in the bank? Apple can pay for their capital expenditures with the cash flow they earn every quarter.
Seriously? The current BoD is overseeing the most valuable company in the world w/o Jerry's help. Jerry plays second fiddle to no one and he can't get out of his own way.
Can you imagine Apple management thinking outside the box?
Winning football games is apparently not that important to the value of his franchise
Good point. He would probably be better suited to be on the board at Amazon.
GOOLE (sic) recently purchased Genentech?
Icahn is GREEDY so he must be wrong.
Give us GOOD reasons why not to do a buyback when Apple is at historically low valuations (14 PE) and historically low interest rates to float a bond.
Again don't just say Icahn is greedy. Thats not a good reason. Show me stats and figures."
Back out the cash and AAPL trades at a 9.92 multiple, while AMZN trades at 1,429 multiple ($400/0.28 EPS) and is trying a new version of Webvan with visions of drone delivery. Bizzare.
I complain about Cook, but for no good reason other than his "Grandpa" image (recreate cool-kid next gen Justin Long!
Onviously, Cook has to be one of the world's most genius operations guru to ever walk the planet, genuinely loved SJ, got China Mobile signed on AAPL terms I speculate, AND in time for 5s AND 5c AND iPad Air & Mini, Mac Pro and the list goes on! Yet AAPL is not considered a growth company as they've just been handed the keys to China? That's absurd...the fact AAPL was even down $8/share this week is pure hedge fund manipulation. Instead of buying shares those guys just sell calls and quit buying...many no different than Einhorn or Ichan. They are all in it together, thus Job's intense disdain for Wall Street. Can't live with'em, can't live without'em
The current stock buyback program + dividend program is biggest in history, complete it in Q1, then split the stock 20-1 and hopefully give actual AAPL enthusiasts a chance at owning more stock.
Who knows, but at the moment the reason(s) AAPL is not trading at a fairly conservative 20X PE is ludicrous to me and would make the price of AAPL $792 right now. Their margins should be fine, and AAPL will thrive in China, 5c included...supplying 500M iPhones alone will be the challenge.
At least Ichan and Einhorn are good for puttin pressure on manage because 1% on $150B nearly dormant cash is as stupid as their current stock price.
C'mon Cook, you've showed us your operational brilliance, now how about "one more thing" or one thing we didn't expect?
@sog35 I agree with sog35 - his reasoning is logical and sound, and I'll be voting to support increasing the buyback. I don't have all that many shares, though, but I agree that it creates value, especially with interest rates below the dividend yield. Just:
1) borrow the money
2) buyback and retire the shares
3) don't pay dividends on the retired shares
4) use the saved dividend money to pay the interest on the bond. And step 5) will be instant profit. (The instant profit will be the difference between the bond yield and the dividend yield)
Pro tip: don't forget to take the interest paid tax deductions for extra profit
It's non-binding, so don't expect too much out of it either if it passes or fails. I think whichever happens, Apple wouldn't do exactly what the resolution says, but that's no big deal. The original plan was to change nothing anyway. But I do think that a bigger step towards that direction will actually create wealth for all shareholders, both short term and long term. Buybacks lowers PE (a good thing) and gets rid of excess cash (that otherwise cannot be reinvested in the core business or something equivalent performing like what Warren Buffett does)
Or Apple could just buy more patent portfolios and lay the smack down on Google I guess.
Trust the Board? Same wonderful Board that fired Steve Jobs?
Please stop spreading BS!First of all, it is NOT the same Board that fired Steve. It is the Board that Steve hired!
Second of all, Icahn, is it you?
Third, yes I trust the board and the executive team that led Apple to where it is now. The most valuable company on earth.
Apple has the capabilities to do something exceptional and interesting and maybe even contribute to a better world.
What would happen for example if Apple remade the electric car and used its attention for detail, it's exceptional design and superior software to make revolutionair new hardware that's affordable for almost anyone?
That would be something, phones and computers are one thing but real hardware like cars, planes (maybe space planes) are something else.
Money is boring, achieving something exceptional is the real aim.
I think Icahn is a finance guy and sees Apple strictly as a corporation - an instrument for giving investors as good a return as possible on their investment. In that narrow sense he may be right about what to do with the money. But the people who work there (including the CEO) see it more as an instrument of positive change in the world (primarily technological but social too), in which case a big pile of money can come in very handy.
(Photo taken in the weeks before Carl Icahn's bar mitzvah.)
So that guy is indeed jewish?
Its a good thing.
A decrease in share count means each share represents a larger percentage of the company. For example if there were 100 shares available and you owned 10 shares you would own 10% of the company. If a buyback purchases 50 shares then you would own 20% of the company. You would have 20% stake in all of Apple's assets. As far as stock price it should go up also since Earnings PER SHARE will go up since there are less shares outstanding.
There are also very good reasons to start a $50B buyback this fiscal year:
1. Interest rates are near all time lows. We won't be able to say that in a year or two.
2. Apple's stock price is severely under-valued
3. Apple pays a 2% dividend
4. Apple has over $150B in cash and generates $50B free cash flows a year
5. The $150B cash is generating 1% returns
Unless Apple is planning on making acquisitions of over $150B in the next 12 months I see no reason for them to continue to hoard the cash. Even if they payout $50B in buybacks they still will have $150B at the end of 2014. Floating a bond at today's interest rates would cost Apple basically ZERO. They would not have to pay the 2% dividend and would be able to write off the interest expense.
I hold 300 shares of Apple stock and I will vote yes to the buyback
The only way the Buyback is a bad idea is if LONG-TERM you think the stock will be worth less than $560. If that's the case you should just sell your shares and invest in something else.
Agreed. There is very little downside to a larger buyback if you think Apple is worth more then $560. If you think it is worth less you should sell or short AAPL.
I own AAPL shares and would also like to see the 50B in 2014 buyback. Just the savings on the dividend makes it worth it, with the less shares being outstanding a (huge) bonus. The buyback is the best way to deal with a Wall Street that does not properly value AAPL.