Why are you implicitly suggesting that there's a binary choice between a stock buy back and value creation and sound operations? The post of mine that you quoted was pretty clear in saying these with Apple's current wealth their financial management can mostly (bar what they need for cash flow and security) be considered a wholly different matter than their core business if they don't need the cash to operate (they don't) then they should do something else with it. I've got confidence that Apple can manage both sound operations and shareholder-friendly financial management.
It's more the overarching theme that I'm arguing with. I don't personally know if fast tracking the 50B buyback would take valuable cash away from the table, but I trust that Apple's management are making sound long-term business decisions with their cash and if they say they don't want to use that 50B then thats good enough for me. Who I don't trust with Apples long term health and business strategy is Carl Icahn.
You can play the speculation game or you can play the real game. I play the real game.
As always, you substitute snark and dismissiveness for actually explaining your point (and/or having one). I'm very glad that you won't be wasting your time any more, because your contributions have been exactly that, a waste of time.
Where is the evidence that Apple needs such a bulging bank account when it's very clear that they've put it to no effective use for the past few years? Gathering a few measly percent interest in a security is not a good use, the opportunity cost is massive - if they'd bought back more in the mid-$400s they'd have made double digits by now. That's mathematics.
Itchy itchy ooo ooo why do they need all that money?
It's burning a hole in your pocket now is it?
What the hell do you know about what kinds of acquisitions/plans/infrastructure Apple might be budgeting for? All you know is that is too much money not to give you some of it.
I think the board probably has a better view of what is coming up than you do. I think they do stuff for a reason. It may look like they are just sitting on that pile o cash to you but, well, we will all see.
Maybe you're right, maybe they have a big plan. If they do then I'll eat my words. But I don't think they do -Apple has shied away from large acquisitions in the past- and I'd also question the wisdom of a large acquisition. They rarely add value.
And any infrastructure investment at this kind of monetary scale would be [I]immense[/I].
Repatriation cost / tax - can be avoided by securing generational incredibly low borrowing rates -
Key here is you can buy shares CHEAP if you believe like I do that Apple has amazing product line coming.
Stock price is important - this keeps the good engineers happy and coming to Apple not going to Google.
So what Carl made money forcing companies to address screw ups. He also has been long time investor in key companies.
For Apple - he has made it clear that he loves and believes in Apple, Cook and Team - his issue is that the share price is absurdly low - horrible return -- this should not be happening. Current administrations refusal to lower rates to encourage BILLIONS from returning to employ Americans does not have to be the end all - since the monies can be borrowed - keeping the growth in Apple (by buy back at CHEAP PRICE)
CARL HAS SAID HE BELIEVES FULLY IN APPLE - JUST NOT THERE LACK OF ACUMEN WITH CAPITAL HORD - WHICH IS WAY OVER THE TOP.
APPLE HAS BILLIONS TO FINANCE EVERYTHING THAT IT IS WORKING ON 10 TIMES OVER. - THE STOCK PERFORMANCE FOR EMPLOYEES AND SHAREHOLDERS IS PATHETIC.
REMEMBER TO - SHAREHOLDERS "OWN" THE COMPANY. MOST OF US LIKE ME ARE INTO THIS FOR THE LONG TERM. HOWEVER, EVERYONE IS ENTITLED TO GROWTH IN THEIR INVESTMENT, AND HAS THE RIGHT TO REQUEST THE COMPANY TO LOOK OUT FOR THEM.
COOK HAS DONE A FINE JOB ON VIRTUALLY ALL MATTERS OTHER THAN LOOKING OUT FOR THE SHAREHOLDERS/STOCK PRICE - WHICH WE HAVE A RIGHT TO EXPECT AND WHICH ALSO IS CRITICAL LONG TERM FOR EMPLOYEE RETENTION
No - when you have an opportunity you don't sit on your hands and stare at a mirror and treat an Apple like a Boeing or Nabisco -
You seize an opportunity (cheap price, over the top cash position) and buy back shares.
Suggesting this is not betrayal of Tim Cook - who is doing a good job I believe - hand picked by SJ - it is focusing attention where it should be on retention of engineers and growth of stock price for employees and shareholders.
You don't wait to buy the stock price until its doubled - you do it when it is cheap so that the shareholder (who stay) is pleased
Also - buy-back cash benefit is for the shareholders as a whole
Some ill informed / on this board are clueless as to finance - this buy back cash goes to those selling in the open market - not into Carl's pocket - he and I are not selling!
You are 100% correct - breath of fresh air to hear people speak common sense.
Having Carl on our (shareholder) side is a golden opportunity. I love the man - so do my kids - "Uncle Carl". Carl has bent over backwards to show that he fully believes in management, the Apple employees, the direction - just not the retention of so much over the top cash when there is such a screaming opportunity to buy back shares CHEAP.
Before Carl, the stock was being manipulated by disgusting shorts and the press that love to say idiotic things because they make $$$ trading/shorting - or getting people to listen to their rubberish (NY Times is great at this). Apple is on the right direction - Carl is assisting us getting Apple management to move from the SJ position to hold onto cash forever .. SJ was correct when he didi it - he had a history of nightmares at Apple early on - but SJ would not do this with Apple sitting on 200Billion.
Your points are good - PE screams BUY - Interest rates are HISTORIC - Opportunity exists NOW for buy back - maybe not in 6 months.
Numbers say it all - thanks for posting - they are conservative numbers too !!
I like SJ selection of Cook - he is the right buy - but Cook needs to modify SJ retention obsession.
I have around 6000 shares (actual options and in the money options) - way over allocated - you are so smart buying at this price. With over the top allocation to Apple, not directly buying (although I believe I will have around $5K more stock shortly since I reinvest all Apple dividends!).
You are 100% correct - breath of fresh air to hear people speak common sense.
Having Carl on our (shareholder) side is a golden opportunity. I love the man - so do my kids - "Uncle Carl". Carl has bent over backwards to show that he fully believes in management, the Apple employees, the direction - just not the retention of so much over the top cash when there is such a screaming opportunity to buy back shares CHEAP.
Before Carl, the stock was being manipulated by disgusting shorts and the press that love to say idiotic things because they make $$$ trading/shorting - or getting people to listen to their rubberish (NY Times is great at this). Apple is on the right direction - Carl is assisting us getting Apple management to move from the SJ position to hold onto cash forever .. SJ was correct when he didi it - he had a history of nightmares at Apple early on - but SJ would not do this with Apple sitting on 200Billion.
Your points are good - PE screams BUY - Interest rates are HISTORIC - Opportunity exists NOW for buy back - maybe not in 6 months.
I agree with some of what you write, specifically that the cost of debt is presently very low compared to the cost of equity. However, much of what you've written gives me every indication that you are not thinking long term and that you, like Carl are in this for a quick buck.
Rushing into this to make Carl Icahn more wealthy is unlikely to be on the wish list of many here. If you know what interest rates are going to be like in 6 months, you can make a great deal of money with that knowledge without involving Apple.
I think for many here, the longer term considerations of Apple's future are more important. I for one would also like to see Apple make some larger acquisitions to bolster a portfolio of products that are looking somewhat vulnerable. I would also like to see them take some risk; at present, the company is being run very conservatively. I'd much rather they spent some of the money on revenue growth, not just improving the way the company is capitalized.
Interest rates are going up, just a matter of time. The Fed is cutting down on its stimulus and QE.
Apple has been spending a bunch on growing revenue. Their R&D expenses was up like 70% last year.
Apple's R&D intensity is still far lower than their peer group. The point I was making however, is that Apple has ample money to make some significant acquisitions to dramatically change the company. I'm not knocking what Apple has done, their own R&D and the acquisitions they've made have been well done, I happen to believe they can think larger!
This is the point of this - way too much cash - boost up the stock - helps the employees/engineers recruitment. Makes long time shareholders like me happy.
Here is my first purchase to the smart-a who said I was "short term" "quick buck" kind of guy:
Comments
And that somehow means they don’t need the money they have otherwise?
Are you under the impression that Apple is a non-profit?
Are you under the impression that Apple should be forced to use its money when it doesn’t want to?
It's more the overarching theme that I'm arguing with. I don't personally know if fast tracking the 50B buyback would take valuable cash away from the table, but I trust that Apple's management are making sound long-term business decisions with their cash and if they say they don't want to use that 50B then thats good enough for me. Who I don't trust with Apples long term health and business strategy is Carl Icahn.
You can play the speculation game or you can play the real game. I play the real game.
Have you somehow missed every single mention of shareholders in this thread?
Who is proposing force? Why does everything have to be so extreme with you?
Thanks for rendering your argument moot. Between that and the purposeful misrepresentation, it’s a wonder anyone wastes their time on you.
Itchy itchy ooo ooo why do they need all that money?
It's burning a hole in your pocket now is it?
What the hell do you know about what kinds of acquisitions/plans/infrastructure Apple might be budgeting for? All you know is that is too much money not to give you some of it.
I think the board probably has a better view of what is coming up than you do. I think they do stuff for a reason. It may look like they are just sitting on that pile o cash to you but, well, we will all see.
And any infrastructure investment at this kind of monetary scale would be [I]immense[/I].
Repatriation cost / tax - can be avoided by securing generational incredibly low borrowing rates -
Key here is you can buy shares CHEAP if you believe like I do that Apple has amazing product line coming.
Stock price is important - this keeps the good engineers happy and coming to Apple not going to Google.
So what Carl made money forcing companies to address screw ups. He also has been long time investor in key companies.
For Apple - he has made it clear that he loves and believes in Apple, Cook and Team - his issue is that the share price is absurdly low - horrible return -- this should not be happening. Current administrations refusal to lower rates to encourage BILLIONS from returning to employ Americans does not have to be the end all - since the monies can be borrowed - keeping the growth in Apple (by buy back at CHEAP PRICE)
CARL HAS SAID HE BELIEVES FULLY IN APPLE - JUST NOT THERE LACK OF ACUMEN WITH CAPITAL HORD - WHICH IS WAY OVER THE TOP.
APPLE HAS BILLIONS TO FINANCE EVERYTHING THAT IT IS WORKING ON 10 TIMES OVER. - THE STOCK PERFORMANCE FOR EMPLOYEES AND SHAREHOLDERS IS PATHETIC.
REMEMBER TO - SHAREHOLDERS "OWN" THE COMPANY. MOST OF US LIKE ME ARE INTO THIS FOR THE LONG TERM. HOWEVER, EVERYONE IS ENTITLED TO GROWTH IN THEIR INVESTMENT, AND HAS THE RIGHT TO REQUEST THE COMPANY TO LOOK OUT FOR THEM.
COOK HAS DONE A FINE JOB ON VIRTUALLY ALL MATTERS OTHER THAN LOOKING OUT FOR THE SHAREHOLDERS/STOCK PRICE - WHICH WE HAVE A RIGHT TO EXPECT AND WHICH ALSO IS CRITICAL LONG TERM FOR EMPLOYEE RETENTION
no - stock buy backs are GREAT tool when underpriced shares and over the top cash position that is only securing tiny T-Bill return
No - when you have an opportunity you don't sit on your hands and stare at a mirror and treat an Apple like a Boeing or Nabisco -
You seize an opportunity (cheap price, over the top cash position) and buy back shares.
Suggesting this is not betrayal of Tim Cook - who is doing a good job I believe - hand picked by SJ - it is focusing attention where it should be on retention of engineers and growth of stock price for employees and shareholders.
You don't wait to buy the stock price until its doubled - you do it when it is cheap so that the shareholder (who stay) is pleased
Also - buy-back cash benefit is for the shareholders as a whole
Some ill informed / on this board are clueless as to finance - this buy back cash goes to those selling in the open market - not into Carl's pocket - he and I are not selling!
Good comment - but I would retain a reasonable reserve - say 75 Billion or so - for acquisitions, special production, et al.
Current excess reserves should be used for buy backs as long as the price is "Cheap" - which it is under about a 14 PE multiple - at least
You are 100% correct - breath of fresh air to hear people speak common sense.
Having Carl on our (shareholder) side is a golden opportunity. I love the man - so do my kids - "Uncle Carl". Carl has bent over backwards to show that he fully believes in management, the Apple employees, the direction - just not the retention of so much over the top cash when there is such a screaming opportunity to buy back shares CHEAP.
Before Carl, the stock was being manipulated by disgusting shorts and the press that love to say idiotic things because they make $$$ trading/shorting - or getting people to listen to their rubberish (NY Times is great at this). Apple is on the right direction - Carl is assisting us getting Apple management to move from the SJ position to hold onto cash forever .. SJ was correct when he didi it - he had a history of nightmares at Apple early on - but SJ would not do this with Apple sitting on 200Billion.
Your points are good - PE screams BUY - Interest rates are HISTORIC - Opportunity exists NOW for buy back - maybe not in 6 months.
You are so right -
Numbers say it all - thanks for posting - they are conservative numbers too !!
I like SJ selection of Cook - he is the right buy - but Cook needs to modify SJ retention obsession.
I have around 6000 shares (actual options and in the money options) - way over allocated - you are so smart buying at this price. With over the top allocation to Apple, not directly buying (although I believe I will have around $5K more stock shortly since I reinvest all Apple dividends!).
Is borrowing money bad?
Do any of you have mortgages?
What about a 2% mortgage? That's what Apple is paying for the money they are borrowing.
After taxes its about 1%.
After the savings from not paying dividends they are actually MAKING MONEY floating bonds.
Stick to the facts.
Current cash balance at 12.31.13 = $159,000,000,000
Cash generated from operations in FY2013 = $53,000,000,000
Current Dividend payments per year = $10,600,000,000
Net cash generated in 2013 after dividend = $42,400,000,000
Current long term debt (Bonds) = 16,000,000,000
Now lets move this forward 5 years assuming flat earnings/cash flow:
12.31.13 balance = $159B
5 years of cash flow @ $42.4B = $212B
Cash balance = $371B
If Apple borrows $50B additional for 2014, total bonds = $66B
Net cash after paying off bonds = $305,000,000,000
Does Apple really need more than $305 Billion? WTF man.
Your assumptions are flawed.
You are 100% correct - breath of fresh air to hear people speak common sense.
Having Carl on our (shareholder) side is a golden opportunity. I love the man - so do my kids - "Uncle Carl". Carl has bent over backwards to show that he fully believes in management, the Apple employees, the direction - just not the retention of so much over the top cash when there is such a screaming opportunity to buy back shares CHEAP.
Before Carl, the stock was being manipulated by disgusting shorts and the press that love to say idiotic things because they make $$$ trading/shorting - or getting people to listen to their rubberish (NY Times is great at this). Apple is on the right direction - Carl is assisting us getting Apple management to move from the SJ position to hold onto cash forever .. SJ was correct when he didi it - he had a history of nightmares at Apple early on - but SJ would not do this with Apple sitting on 200Billion.
Your points are good - PE screams BUY - Interest rates are HISTORIC - Opportunity exists NOW for buy back - maybe not in 6 months.
I agree with some of what you write, specifically that the cost of debt is presently very low compared to the cost of equity. However, much of what you've written gives me every indication that you are not thinking long term and that you, like Carl are in this for a quick buck.
Rushing into this to make Carl Icahn more wealthy is unlikely to be on the wish list of many here. If you know what interest rates are going to be like in 6 months, you can make a great deal of money with that knowledge without involving Apple.
I think for many here, the longer term considerations of Apple's future are more important. I for one would also like to see Apple make some larger acquisitions to bolster a portfolio of products that are looking somewhat vulnerable. I would also like to see them take some risk; at present, the company is being run very conservatively. I'd much rather they spent some of the money on revenue growth, not just improving the way the company is capitalized.
Interest rates are going up, just a matter of time. The Fed is cutting down on its stimulus and QE.
Apple has been spending a bunch on growing revenue. Their R&D expenses was up like 70% last year.
Apple's R&D intensity is still far lower than their peer group. The point I was making however, is that Apple has ample money to make some significant acquisitions to dramatically change the company. I'm not knocking what Apple has done, their own R&D and the acquisitions they've made have been well done, I happen to believe they can think larger!
We think alike - smart - perfect points.
This is the point of this - way too much cash - boost up the stock - helps the employees/engineers recruitment. Makes long time shareholders like me happy.
Here is my first purchase to the smart-a who said I was "short term" "quick buck" kind of guy: