The buyback should have been much larger in the $400s but even now the stock price is still well below intrinsic value. They should be backing up the truck.
Just out of curiosity, how much cost to buy one share? I'm interest in buying that one. I'm very n00b with invest stuff and would love to own like .000000000001% of Apple, Inc. lol
I don't agree. From his comments yesterday, he talked to the biggest shareholders and he has a better understanding of the culture around Apple. Stacking cash is a good thing, but at this point enough is enough.
The next thing that needs to be address is how to get that oversee cash in the US at a reasonable rate. Apple is not the only company keeping its cash offshore because of outdated tax laws. If the US wants more investments and new jobs they have to move before companies invest too much in new plants oversee.
Disagree with you on the first point there. Realistically he is not going to say to the world; Hey guys, guess what? I'm going to trick everyone into helping me destroy Apple, and them walk away with billions while all the suckers are left holding the bag.
He will say what he needs to say to get the job done. Long term investor he is not.
Totally with you on the second point though. Well said!
Have any of you wondered how Crazy Carl is buying the stock? I'm pretty sure he didn't have it sitting in a bank account. He's selling other shares for a better investment. What do you think will happen if he finds a better investment than Apple? He ain't in it for the long term.
That still doesn't make him wrong. What works for the short term doesn't necessarily conflict with what works for the long term. Icahn selling his shares when he thinks that Apple has achieved its value wouldn't cause a crash like some are suggesting. It'd dip maybe, just like it does ever other day on the newest bad rumour, but Icahn doesn't own enough for his trades to be so influential as to cause any panic.
Carl Icahn sees nothing except money. If making it means destroying companies, he does it with abandon. The best example is TWA. He made around $470 million in personal profit . . . . and left TWA with $540 million in additional debt. There is no possible way in which that can be defended from an economic point of view -- Carl Icahn stole from the entire rest of the economy, because he could.
Just as we should have asked 20 years ago whether the mobility of everyone who works and lives in St. Louis -- TWA's hub that has now lost more than half its business -- was more important than Carl Icahn's bank account, we should be asking the same of Apple. There will always be at least some who want to cash out, and those people will no doubt be salivating over what Icahn is doing, but let's hope like heck that it doesn't cover 50 percent of those who are bothered to vote. If you want Apple to continue producing for you, as someone who uses technology or as someone who owns their stock, in ten or even five years time, run like hell from this deal.
So, Icahn acknowledges that investment analysts don't understanding Apple's underlying business approach, which it to put the consumer first, not the shareholders.
If you put the shareholder's first, you will be a slave to quarterly profits, and the first good buyout opportunity. Products come second. They are simply a means to the end of reaping as much money as possible for the moment.
Apple's approach says "if we make the best quality products, with the best user interface, then profits and sales will come". Sort of the better mousetrap approach. Wall street and Icahn reject this approach. Icahn does not understand how to do business this way.
Neither did Amelio, or whats his name. Under their "conventional" leadership Apple almost went out of business.
So, who do I want directing Apple's activities - Icahn, or Cook and crew.
That still doesn't make him wrong. What works for the short term doesn't necessarily conflict with what works for the long term. Icahn selling his shares when he thinks that Apple has achieved its value wouldn't cause a crash like some are suggesting. It'd dip maybe, just like it does ever other day on the newest bad rumour, but Icahn doesn't own enough for his trades to be so influential as to cause any panic.
Nor can Icahn own enough shares to cause in increase in stock price.
Just out of curiosity, how much cost to buy one share? I'm interest in buying that one. I'm very n00b with invest stuff and would love to own like .000000000001% of Apple, Inc. lol
The simplest and cheapest approach is to open an account with someone like Schwab.com, and put in a buy order. You can buy as few or as many as you want with cash you've transferred into the account. (I think the minimum needed to open an account is $1,000 with Schwab; others may be lower or higher)
They charge $9 per trade. So, in order to minimize transaction costs, it pays to buy a couple more, than less (if you were planning on buying more in the near future).
The buyback should have been much larger in the $400s but even now the stock price is still well below intrinsic value. They should be backing up the truck.
What do you think is the intrinsic value for AAPL? Why?
Nor can Icahn own enough shares to cause in increase in stock price.
Very true, Icahn's influence isn't in his buying and selling power itself, but in voice being one that people listen to. If he buys then some people think it's a good buy, if he sells then people may think it's a good sell. But the stock price isn't booming right now as he's buying, and nor will it crash when he eventually sells.
And he certainly doesn't have the influence to elevate the stock price far above where it should reasonably sit, then cash in and leave Apple in a shambles. Not by a long shot, which is nevertheless the fear that some seem to have.
He's doing what many around here do, saying that Apple at it's current price is undervalued because Wall Street isn't recognising much future growth or sustainability in Apple. But he has faith in Apple to continue to grow and generate cash.
It's really kind of weird how so many are hating on Carl when he's coming out as very pro-Apple.
He is pro-Apple. He wouldn't be investing in them unless he thought they had a bright future. In this instance pro-Carl, pro-$$$$ and pro-Apple is exactly the same thing.
I like the plan too and I also hold shares. I don't really understand the hostility on this site towards Icahn
It's not towards Icahn, but towards to the general idiocy of the "wall st business" people who make money at the expense of the everyone else who invested in the company because they believe in the company/want to retire with more money than they initially invested. Icahn is just one of those guys who bullies the company because he holds a large amount of shares into making bad decisions to increase the share price on a short term and then dump the stock when it won't go further. (Go back to FaceBook's IPO to see the large amounts of price swings as everyone dumped their long term holdings left and right to try and get a pop from the Facebook stock.)
Apple does not play by the same market forces that every other company out there does. Apple is only concerned with making products that people want, and can sell on brand name alone. Apple could produce a television, watch and a car, and there will be people who would buy it sight unseen. But you have business people shouting that Apple should have 50 different versions of the iPhone and iPad because some competitor also has a device that is that size or one-off feature.
Everytime I hear a rumor about a larger iPhone or smaller iPad I roll my eyes. The iPad mini was probably a good option because it's the size of a book/dvd/vhs tape but thinner and about as light as a paper book. Larger iPhone? no thanks. I was kinda hoping the 5c would have kept the original 3.5" screen size.
They will not pay any more tax than other wise (actually less since they can deduct the interest expense)
They will fund by using US cash ($20B) and Bonds ($30B)
The cost of Bonds will be almost ZERO because they won't have to pay the dividend on the purchased shares (2.3% div) and they get a tax deduction on interest.
Bonds are at 2% for 5 years. (again did you read the letter?)
Basically Apple is borrowing money for free and will pay back with the cash flow from US operations in future years. ( I think US operations generates about $20B in cash a year so they can payoff the bond in 5 years easily)
Very well stated. Don't understand why Apple share holders so often lament its valuation in relation to the market, and then react so vehemently to an activist's attempt to rectify that. Apple is a great company, makes great products, and is a cash machine. However it receives a discounted valuation in relation to the market because that cashflow is meaningless to potential investors when it is not being returned to shareholders in a meaningful way. The days of 40% earnings growth are gone and are not going to return, even with new product categories, due to economies of scale. This is a proposal that allows Apple to maintain its war chest, and rewards shareholders through increasing EPS and probably multiple expansion.
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I agree with everything Carl said. Everything.
Me too.
The buyback should have been much larger in the $400s but even now the stock price is still well below intrinsic value. They should be backing up the truck.
He will say what he needs to say to get the job done. Long term investor he is not.
Totally with you on the second point though. Well said!
Have any of you wondered how Crazy Carl is buying the stock? I'm pretty sure he didn't have it sitting in a bank account. He's selling other shares for a better investment. What do you think will happen if he finds a better investment than Apple? He ain't in it for the long term.
That still doesn't make him wrong. What works for the short term doesn't necessarily conflict with what works for the long term. Icahn selling his shares when he thinks that Apple has achieved its value wouldn't cause a crash like some are suggesting. It'd dip maybe, just like it does ever other day on the newest bad rumour, but Icahn doesn't own enough for his trades to be so influential as to cause any panic.
Finance is so boring and one of the big evils of the world.
And I personally don't like gamblers.
You should focus on your lack of imagination.
Just as we should have asked 20 years ago whether the mobility of everyone who works and lives in St. Louis -- TWA's hub that has now lost more than half its business -- was more important than Carl Icahn's bank account, we should be asking the same of Apple. There will always be at least some who want to cash out, and those people will no doubt be salivating over what Icahn is doing, but let's hope like heck that it doesn't cover 50 percent of those who are bothered to vote. If you want Apple to continue producing for you, as someone who uses technology or as someone who owns their stock, in ten or even five years time, run like hell from this deal.
That is such a reductive argument. Judge the proposal on its own merits, not on the 20 year old demerits of the proposer.
If you put the shareholder's first, you will be a slave to quarterly profits, and the first good buyout opportunity. Products come second. They are simply a means to the end of reaping as much money as possible for the moment.
Apple's approach says "if we make the best quality products, with the best user interface, then profits and sales will come". Sort of the better mousetrap approach. Wall street and Icahn reject this approach. Icahn does not understand how to do business this way.
Neither did Amelio, or whats his name. Under their "conventional" leadership Apple almost went out of business.
So, who do I want directing Apple's activities - Icahn, or Cook and crew.
No brainer.
I have no idea what this means. Apple insiders cannot buy shares based on inside information until two days after said info is made public.
Nor can Icahn own enough shares to cause in increase in stock price.
Just out of curiosity, how much cost to buy one share? I'm interest in buying that one. I'm very n00b with invest stuff and would love to own like .000000000001% of Apple, Inc. lol
The simplest and cheapest approach is to open an account with someone like Schwab.com, and put in a buy order. You can buy as few or as many as you want with cash you've transferred into the account. (I think the minimum needed to open an account is $1,000 with Schwab; others may be lower or higher)
They charge $9 per trade. So, in order to minimize transaction costs, it pays to buy a couple more, than less (if you were planning on buying more in the near future).
I agree with everything Carl said. Everything.
Me too.
The buyback should have been much larger in the $400s but even now the stock price is still well below intrinsic value. They should be backing up the truck.
What do you think is the intrinsic value for AAPL? Why?
[IMG ALT=""]http://forums.appleinsider.com/content/type/61/id/37728/width/350/height/700[/IMG]
Nor can Icahn own enough shares to cause in increase in stock price.
Very true, Icahn's influence isn't in his buying and selling power itself, but in voice being one that people listen to. If he buys then some people think it's a good buy, if he sells then people may think it's a good sell. But the stock price isn't booming right now as he's buying, and nor will it crash when he eventually sells.
And he certainly doesn't have the influence to elevate the stock price far above where it should reasonably sit, then cash in and leave Apple in a shambles. Not by a long shot, which is nevertheless the fear that some seem to have.
He's doing what many around here do, saying that Apple at it's current price is undervalued because Wall Street isn't recognising much future growth or sustainability in Apple. But he has faith in Apple to continue to grow and generate cash.
It's really kind of weird how so many are hating on Carl when he's coming out as very pro-Apple.
Because he's not pro-Apple. He's pro-Carl with pro-$$$$ a close second.
He is pro-Apple. He wouldn't be investing in them unless he thought they had a bright future. In this instance pro-Carl, pro-$$$$ and pro-Apple is exactly the same thing.
It's not towards Icahn, but towards to the general idiocy of the "wall st business" people who make money at the expense of the everyone else who invested in the company because they believe in the company/want to retire with more money than they initially invested. Icahn is just one of those guys who bullies the company because he holds a large amount of shares into making bad decisions to increase the share price on a short term and then dump the stock when it won't go further. (Go back to FaceBook's IPO to see the large amounts of price swings as everyone dumped their long term holdings left and right to try and get a pop from the Facebook stock.)
Apple does not play by the same market forces that every other company out there does. Apple is only concerned with making products that people want, and can sell on brand name alone. Apple could produce a television, watch and a car, and there will be people who would buy it sight unseen. But you have business people shouting that Apple should have 50 different versions of the iPhone and iPad because some competitor also has a device that is that size or one-off feature.
Everytime I hear a rumor about a larger iPhone or smaller iPad I roll my eyes. The iPad mini was probably a good option because it's the size of a book/dvd/vhs tape but thinner and about as light as a paper book. Larger iPhone? no thanks. I was kinda hoping the 5c would have kept the original 3.5" screen size.
They will not pull US cash.
They will not pay any more tax than other wise (actually less since they can deduct the interest expense)
They will fund by using US cash ($20B) and Bonds ($30B)
The cost of Bonds will be almost ZERO because they won't have to pay the dividend on the purchased shares (2.3% div) and they get a tax deduction on interest.
Bonds are at 2% for 5 years. (again did you read the letter?)
Basically Apple is borrowing money for free and will pay back with the cash flow from US operations in future years. ( I think US operations generates about $20B in cash a year so they can payoff the bond in 5 years easily)
Very well stated. Don't understand why Apple share holders so often lament its valuation in relation to the market, and then react so vehemently to an activist's attempt to rectify that. Apple is a great company, makes great products, and is a cash machine. However it receives a discounted valuation in relation to the market because that cashflow is meaningless to potential investors when it is not being returned to shareholders in a meaningful way. The days of 40% earnings growth are gone and are not going to return, even with new product categories, due to economies of scale. This is a proposal that allows Apple to maintain its war chest, and rewards shareholders through increasing EPS and probably multiple expansion.