The point of buying back stock isn't to have less stock, it's to increase the value of the remaining stock going forward, which should return more value to existing shareholders if/when the stock price rises.
Splitting it splits the value of each individual share to make it more affordable to buy a piece of Apple for low volume stock traders, but doesn't have any effect on the total value (price x quantity) of the stock held by existing shareholders.
The goals of buying back and splitting stock do not conflict.
I know reducing the number of shares is supposed to increase the stock value remaining, etc.
And I also know that splitting to make it more affordable, etc. etc. All of this was explained to me decades ago. I'm well aware of both of those.
My point is why do both within a short period of time and doesn't buying those shares reduce their cash position? I have never seen a company do both within a short period of time of one another. I've seen a company buy back shares when there are a TON of them available. Microsoft did that and they have about 8.5 Billion shares outstanding and there stock has been stuck in the 30 to 40 range.
I've also seen various companies do stock splits because the share price got to high while the company was in hyper growth mode (like Apple's been in for about a decade), and then once the company kind of gets out of that growth mode of stock splits, etc. it then goes into becoming more of a dividend stock and I just think that's what Apple is in the process of doing.
I've just never seen a company buy back shares and then do a stock split within a relatively short period of time. That's what I'm having a problem with. It's just not something I've ever seen before. and I'm just wondering where they are taking the cash from to repurchase these large blocks of shares.
If buying shares increases the stock price, and splitting the stock reduces the stock price, then that's a conflict. I don't know why they didn't just save their money by not repurchasing stocks and just do a stock split. They used to split the stock every time it hit $100 a share until something like 2005 I believe was their last stock split. Then they just let it ride up and up and up until these drastic "mood" swings from $400 to $700 and then back down to $500. I just think they should have just paid dividends and split the stock and leave it at that.
The point of buying back stock isn't to have less stock, it's to increase the value of the remaining stock going forward, which should return more value to existing shareholders if/when the stock price rises.
Splitting it splits the value of each individual share to make it more affordable to buy a piece of Apple for low volume stock traders, but doesn't have any effect on the total value (price x quantity) of the stock held by existing shareholders.
The goals of buying back and splitting stock do not conflict.
I don't know what anyone else thinks, but based on what i know from listening and reading about what Apple's done and plans on, I think they'll make profits, but they aren't going to grow that fast and I think for the time being the stock is going to be a dividend stock cheap enough for people to buy and there will be a shift in investors and I don't see the stock moving to higher plateaus for a while until they can prove they will get back to a 30% year to year growth rate without destroying profit margins. I think it's going to be stuck in between two numbers and I'll figure out what those two numbers are later after the stock split. In the mean time, I'm just going to be looking at and caring about the P/E ratio and see where it's new range is. I think it's going to take a hit after the stock split. That's my gut feeling.
I really think that the repurchases are happening along with the stock split is Apple's way of working with the large institutional players to shift their positions from growth related funds into dividend related funds and Apple's trying to appease both crowds at the same time. That's the only reasoning that would make sense.
Before you respond to this notion, just give it a day to THINK about it. The Board of Directors/CEO are ALWAYS dealing with the pressures of the large institutional buyers since they have lots of voting power.
I read about several other companies that did things that didn't get a lot of public support and it came out that they were getting pressure from the large institutional investors and they were kind of calling the shots behind the scenes. Right, wrong, indifferent, the large investors unfortunately can be the ones calling the shots and we don't always here about it.
My point is why do both within a short period of time
Why not? As mentioned above, different goals that don't conflict. Apple are more than capable of patting their head and rubbing their tummy at the same time.
I have never seen a company do both within a short period of time of one another.
So? Apple are in an unusual position of being among the most valuable companies in the world, very cash rich, with a high stock price, yet not viewed as a secure stock. Unusual positions give rise to unusual reactions.
I've seen a company buy back shares when there are a TON of them available. Microsoft did that and they have about 8.5 Billion shares outstanding and there stock has been stuck in the 30 to 40 range.
Microsoft is not a growth stock. That doesn't mean the buy back was a bad idea, if the stock is stuck at the same position that suggests it was a neutral idea.
I've also seen various companies do stock splits because the share price got to high while the company was in hyper growth mode (like Apple's been in for about a decade), and then once the company kind of gets out of that growth mode of stock splits, etc. it then goes into becoming more of a dividend stock and I just think that's what Apple is in the process of doing.
Possibly, though that remains to be seen. If it's the case then the buy back is a neutral activity, it doesn't affect the stock value one way or the other, and the stock split may increase small volume trading. No problem.
I've just never seen a company buy back shares and then do a stock split within a relatively short period of time. That's what I'm having a problem with. It's just not something I've ever seen before. and I'm just wondering where they are taking the cash from to repurchase these large blocks of shares.
US cash flow and the money raised in the bond sale a while back. This isn't a secret, so not sure why it's causing you confusion.
If buying shares increases the stock price, and splitting the stock reduces the stock price, then that's a conflict.
Buying back stock does not increase the stock price, it increases the proportional value of the remaining stock, which will be beneficial to shareholders in the event of growth.
Splitting stock only reduces the stock price proportionate to the new reduction in share that it represents. It does not in itself reduce the price:value ratio.
There is no conflict here because the goals are different, the buy back benefits existing shareholders who hold the stock expecting growth, the split benefits low volume traders who are buying and selling g the stock.
These are two entirely different groups of shareholders. Neither are affected by the other.
I don't know why they didn't just save their money by not repurchasing stocks and just do a stock split. They used to split the stock every time it hit $100 a share until something like 2005 I believe was their last stock split. Then they just let it ride up and up and up until these drastic "mood" swings from $400 to $700 and then back down to $500. I just think they should have just paid dividends and split the stock and leave it at that.
See above. The buy back rewards long term investors who see growth potential. It's a show of faith in the company.
Why not? As mentioned above, different goals that don't conflict. Apple are more than capable of patting their head and rubbing their tummy at the same time.
Yes, so? Apple are hardly cash strapped, and the buy back increases existing shareholders proportional ownership. That's the point.
So? Apple are in an unusual position of being among the most valuable companies in the world, very cash rich, with a high stock price, yet not viewed as a secure stock. Unusual positions give rise to unusual reactions.
Microsoft is not a growth stock. That doesn't mean the buy back was a bad idea, if the stock is stuck at the same position that suggests it was a neutral idea.
Possibly, though that remains to be seen. If it's the case then the buy back is a neutral activity, it doesn't affect the stock value one way or the other, and the stock split may increase small volume trading. No problem.
US cash flow and the money raised in the bond sale a while back. This isn't a secret, so not sure why it's causing you confusion.
Buying back stock does not increase the stock price, it increases the proportional value of the remaining stock, which will be beneficial to shareholders in the event of growth.
Splitting stock only reduces the stock price proportionate to the new reduction in share that it represents. It does not in itself reduce the price:value ratio.
There is no conflict here because the goals are different, the buy back benefits existing shareholders who hold the stock expecting growth, the split benefits low volume traders who are buying and selling g the stock.
These are two entirely different groups of shareholders. Neither are affected by the other.
See above. The buy back rewards long term investors who see growth potential. It's a show of faith in the company.
The whole things is awfully strange and yes, I do believe buying shares to increase the share price and then increasing the number of share to decrease the share price is opposite. I've never seen this before and I don't think others have either.
The whole things is awfully strange and yes, I do believe buying shares to increase the share price and then increasing the number of share to decrease the share price is opposite. I've never seen this before and I don't think others have either.
Well, whatever..
Are you purposely being obtuse? I sincerely hope you're just trolling now because if you honestly can't understand these simple concepts you need to just stop.
The whole things is awfully strange and yes, I do believe buying shares to increase the share price and then increasing the number of share to decrease the share price is opposite. I've never seen this before and I don't think others have either.
Well, whatever..
They are not related to each other in any way. There is no connection or correlation to buying back shares and a stock split.
If it was a good idea to buy back shares before the split, then it will still be a good idea to buy them back after the split for 1/7 the price. Buying back shares increasing remaining stockholders value while a shares split does NOTHING to affect stockholders value.
Its like asking "why would someone both want to earn more money AND break a $20 bill into $5 bills?" You can see that the size of the bill doesn't change the total value to the person who owns them. But earning more money WILL make them more wealthy. The goal of breaking your $20 is completely independent of your purpose in continuing to work and earn money. Similarly, splitting the stock means NOTHING to the shareholders or the company in terms of value. But buying back shares DOES increase the value of people's remaining stock (independent of stock splits).
The only thing a stock split does is make it easier for investors with small amounts of money to invest due to it not being such a big chunk of money in the same way that having a $5 bill is easier to spend at a dollar store than a $100 bill. If it weren't for this, there is no real difference in anyway before and after the stock split.
Are you purposely being obtuse? I sincerely hope you're just trolling now because if you honestly can't understand these simple concepts you need to just stop.
I was going to say the same thing about you. I'm not trolling, I've just never seen a company do large block purchases and a massive stock split within a fairly short period of time and I don't think anyone else here has either.
If you have, name a stock that's done that. Because I can't.
Different types of investors have different types of habits, and this stock is obviously changing the type of investor with a different habit and until this thing normalizes out from a shares outstanding point of view. It's a little too weird for me, I just get nervous and if I were to look at Apple stock right now, I wouldn't buy in right now, I would wait unit I see a low point and then maybe buy in, but not have the same expectations of the ROI since it's not in high growth anymore.
I can't help if we think differently on this. You have your opinions but calling me a troll is really being juvenile and childish. So please stop with the name calling. BTW, I can understand the simple concepts just fine. So, stop your assumptions.
They are not related to each other in any way. There is no connection or correlation to buying back shares and a stock split.
If it was a good idea to buy back shares before the split, then it will still be a good idea to buy them back after the split for 1/7 the price. Buying back shares increasing remaining stockholders value while a shares split does NOTHING to affect stockholders value.
Its like asking "why would someone both want to earn more money AND break a $20 bill into $5 bills?" You can see that the size of the bill doesn't change the total value to the person who owns them. But earning more money WILL make them more wealthy. The goal of breaking your $20 is completely independent of your purpose in continuing to work and earn money. Similarly, splitting the stock means NOTHING to the shareholders or the company in terms of value. But buying back shares DOES increase the value of people's remaining stock (independent of stock splits).
The only thing a stock split does is make it easier for investors with small amounts of money to invest due to it not being such a big chunk of money in the same way that having a $5 bill is easier to spend at a dollar store than a $100 bill. If it weren't for this, there is no real difference in anyway before and after the stock split.
Apple can't buyback enough shares after the split to make a dent in it to make any difference for the long term, it's just short term hits for short term gains. I personally think at this time, they would be better off not buying back the stock and just letting it split.
[quote name="drblank" url="/t/178863/apples-44-billion-in-stock-buybacks-have-helped-increase-market-cap-by-100-billion/40#post_2523497"]I've just never seen a company do large block purchases and a massive stock split within a fairly short period of time and I don't think anyone else here has either.[/QUOTE]
I've never seen Tim Cook on a Mexican restaurant on a Tuesday. What's your point?
[QUOTE]If you have, name a stock that's done that. Because I can't.[/QUOTE]
WHY THE **** ARE YOU CONCERNED ABOUT WHAT HAS BEEN DONE BEFORE AND WHAT HASN'T. THESE THINGS ARE NEITHER CONNECTED NOR CONTRADICTORY. YOU'VE MADE THAT UP IN YOUR HEAD. IF YOU DON"T UNDERSTAND THAT BUYING BACK A STOCK WHEN IT'S LOW INCREASES THE VALUE OF THE STOCK FOR EVERYONE AND STOCK SPLITS DON'T AFFECT THE VALUE FOR ANYONE BUT MAKE IT EASIER TO BUY WITH A NEW LOWER PRICE POINT THEN YOU NEED TO STOP. JUST STOP. GO READ ONE OF THE BILLION ARTICLES ON THESE SIMPLE ACTIONS.
I've never seen Tim Cook on a Mexican restaurant on a Tuesday. What's your point?
WHY THE **** ARE YOU CONCERNED ABOUT WHAT HAS BEEN DONE BEFORE AND WHAT HASN'T. THESE THINGS ARE NEITHER CONNECTED NOR CONTRADICTORY. YOU'VE MADE THAT UP IN YOUR HEAD. IF YOU DON"T UNDERSTAND THAT BUYING BACK A STOCK WHEN IT'S LOW INCREASES THE VALUE OF THE STOCK FOR EVERYONE AND STOCK SPLITS DON'T AFFECT THE VALUE FOR ANYONE BUT MAKE IT EASIER TO BUY WITH A NEW LOWER PRICE POINT THEN YOU NEED TO STOP. JUST STOP. GO READ ONE OF THE BILLION ARTICLES ON THESE SIMPLE ACTIONS.
Get over it. It's not commonly done at the same time. Are you afraid that I'm going to scare people away form buying the stock so you can't make as much money?
If they make any large bulk purchases it would be nice to know a day ahead of when they do it. I think that would be nice. :-)
Get over it. It's not commonly done at the same time. Are you afraid that I'm going to scare people away form buying the stock so you can't make as much money?
1) Of course it's not down because there are so few companies throughout history that have been in Apple's position but, again, for the last time, THESE ARE NOT CONTRADICTORY EVENTS.
2) Anyone reading this thread, sans you, will see that Apple is a great buy. All you're doing is showing a) how fucking ignorant you are on this rudimentary subject, and b) your inability to educate yourself on the benefits of stock posits, buybacks, and dividends.
3) If you're goal is to keep people from buying Apple from a poorly contrived and invented argument then how can you say you're not trolling… not that I'd expect a troll to admit it.
Apple can't buyback enough shares after the split to make a dent in it to make any difference for the long term, it's just short term hits for short term gains. I personally think at this time, they would be better off not buying back the stock and just letting it split.
The stock split has no effect on the value of shares that Apple can buy back. They can buy back EXACTLY the same value as they could before.
If Apple could buy back $1B worth of shares (and a certain % of their total) BEFORE the split, then they can buy back exactly the same amount ($1B worth) AND the same % of their total stock.
Again, the split CHANGES NOTHING and has absolutely 0 effect on the effect of their buyback.
I feel like I am trying to explain to my kid that a $20 is worth the same as 20 $1 bills but they just can't understand it.
Apple will be buying back 7x more shares per day after the stock split but each share will cost 1/7 of what it did before. ITS THE SAME total value and its THE SAME % of the total outstanding shares.
Since these are 2 completely independent events that don't affect each other, they occur close to each other at times and far from each other at other times.
It just doesn't matter since neither event has any effect on the other.
Apple can't buyback enough shares after the split to make a dent in it to make any difference for the long term, it's just short term hits for short term gains. I personally think at this time, they would be better off not buying back the stock and just letting it split.
Apple don't buy back shares by quantity, they buy back according to value. They don't say "we're going to buy 100 million shares", they say "we're going to buy $600 million of shares". Likewise, the point of the buy back is not to retire an absolute number of shares, but a proportion of the whole. The buy back will have the exact same proportionate effect after the stock split.
As I keep saying, the stock split makes absolutely no difference to the rationale behind, or the method of, the buy back. They're completely mutually exclusive in intent and impact.
1) Of course it's not down because there are so few companies throughout history that have been in Apple's position but, again, for the last time, THESE ARE NOT CONTRADICTORY EVENTS.
2) Anyone reading this thread, sans you, will see that Apple is a great buy. All you're doing is showing a) how fucking ignorant you are on this rudimentary subject, and b) your inability to educate yourself on the benefits of stock posits, buybacks, and dividends.
3) If you're goal is to keep people from buying Apple from a poorly contrived and invented argument then how can you say you're not trolling… not that I'd expect a troll to admit it.
When they bought shares a couple of days ago, it wasn't at a low point, it was at a high point. The 52 week low was under $400 a share, so they bought at closer to a high point for the 52 week range. I think they did it to prevent a massive selloff right when they announced the Stock Split.
No, my goal is to not have people buy when the stock is overvalued. I think it's overvalued or at least very close to that. Look at the stock price last year. It dipped lower during the summer months, so if I want people to maximize their profits for people trying to get into the stock, I would advise them waiting until they see a much lower P/E ratio, because they have traded at a much lower P/E, I think they've gone as low as 11 or slightly lower within the last year. Now, for those expecting the stock to reach $700 like it was last year, I would advise it's not going to happen that soon and they'd be better off just hanging on to the stock, do some dividend reinvestments and wait a few more years and HOPEFULLY it will hit $700 (equivalent).
I'm all for buying low and selling high, which is about as fundamental as possible. I don't see this as a low point moving forward, my gut feeling is that it will move lower within the next 6 months.
I think you are conjuring up misleading statements about MY intentions.. Your intentions are purely selfish ones, mine aren't. I just don't like it when people get suckered into thinking this stock is trading at a low point right now. What also concerns me is the Beta, it's traded at around 1 for many, many years, and it's not. It's at .7, that signifies a different level of stability. I don't like stocks that have erratic behavior. Apple bought stock because they didn't want a massive sell off the next day after their announcement, and I think that's artificially sending people the idea that this stock is going to take off like a rocket ship like it's trading at a low point. I don't think it is, that's all.
What I don't like is getting used to Apple just being the savior of the stock price THINKING they are always going to buy back shares forever when the stock is about to take a dump.
I personally have not been real thrilled with Cooks' method of handling certain things over the past couple of years. He has, IMO, room for improvement. I don't just prescribe to the "I LOVE EVERYTHING THEY DO", just because I'm a fan of the platform. I don't agree with everything that's been done, I do think there's room for improvement and I'm not just going to THINK Cook can't do no wrong, because he hasn't earned a solid A in my book yet. He's got a solid B, maybe B+, but right now, i think he's at a B for me.
Do you know that they haven't made a product announcement in about 7 months? That's a long time for Apple not to make a product announcement. Their last product announcement was in the beginning of Oct, so I could Oct, Nov, Dec, Jan, Feb, March and now April with no product announcements. That's a long time in the high tech industry with a product mix like them.
The stock split has no effect on the value of shares that Apple can buy back. They can buy back EXACTLY the same value as they could before.
If Apple could buy back $1B worth of shares (and a certain % of their total) BEFORE the split, then they can buy back exactly the same amount ($1B worth) AND the same % of their total stock.
Again, the split CHANGES NOTHING and has absolutely 0 effect on the effect of their buyback.
I feel like I am trying to explain to my kid that a $20 is worth the same as 20 $1 bills but they just can't understand it.
Apple will be buying back 7x more shares per day after the stock split but each share will cost 1/7 of what it did before. ITS THE SAME total value and its THE SAME % of the total outstanding shares.
But Apple can't continue to constantly buy back shares to prevent sell offs forever. They don't have unlimited abilities to do this and to always think that Apple is always going to "SAVE THE DAY" from sell offs when the stock shouldn't be trading as high as it is, is being a little foolish. I look at the P/E to see when it's over or undervalued. As of the last 52 weeks, it's approaching the maximum P/E, which would indicate it's overvalued. I wouldn't buy this stock until it reaches a undervalued state to have a much better chance of a better ROI.
You don't have repeat what a Stock split is, what you should be more concerned about is how the stock is going to behave once their 7x as many shares because look at what happened to Microsoft after they reached their peak in shares.
I learned what a stock split was at 10 years old in 1969, because I was pointing to my father about IBM and other stocks that were splitting routinely and I wanted to understand why the stock price ran up to 400 a share and then went down to about 40 and was doing it consistently. My father actually bought some IBM stock after I pointed this out to him. Me? I was just looking at numbers on a daily basis in WSJ because i liked looking at number fluctuations as a inquisitive kid. I actually pointed out all of the time some of the best stocks before I studied finance in college, so I'm very familiar with stock splits. But I'm also familiar with seeing stocks go from a high growth state to a dividend stock which has less volatility. I just think Apple is creating a false sense of security thinking they are always going to buy back stocks and save everyone's bacon. We don't know everything that goes on behind the scenes with the discussions between Apple executives and these big institutional investors unless it's publicized. Just beware of Apple's purchase behavior because they are more about saving what the market would do under normal circumstances. All Apple did when they bought shares the other day was delay a drop in share price, it's just temporary false sense of reality.
The product plan really has nothing to do with buy backs and stock splits.
But it does prove whether this company is on track for better growth and a more stabilized growth for all quarters rather than just the Dec and March quarters. I like to see ALL quarters increase at a consistent rate and they need more consistent product announcements. I just don't like them pumping out everything in a one month period versus constant quarterly product releases. That's all. I think it's dangerous what they are doing. I'm just VERY cautious right now until I see some thing that indicates something different than what happened over the past 2 years. That's all. I'm just being cautious.
Comments
I know reducing the number of shares is supposed to increase the stock value remaining, etc.
And I also know that splitting to make it more affordable, etc. etc. All of this was explained to me decades ago. I'm well aware of both of those.
My point is why do both within a short period of time and doesn't buying those shares reduce their cash position? I have never seen a company do both within a short period of time of one another. I've seen a company buy back shares when there are a TON of them available. Microsoft did that and they have about 8.5 Billion shares outstanding and there stock has been stuck in the 30 to 40 range.
I've also seen various companies do stock splits because the share price got to high while the company was in hyper growth mode (like Apple's been in for about a decade), and then once the company kind of gets out of that growth mode of stock splits, etc. it then goes into becoming more of a dividend stock and I just think that's what Apple is in the process of doing.
I've just never seen a company buy back shares and then do a stock split within a relatively short period of time. That's what I'm having a problem with. It's just not something I've ever seen before. and I'm just wondering where they are taking the cash from to repurchase these large blocks of shares.
If buying shares increases the stock price, and splitting the stock reduces the stock price, then that's a conflict. I don't know why they didn't just save their money by not repurchasing stocks and just do a stock split. They used to split the stock every time it hit $100 a share until something like 2005 I believe was their last stock split. Then they just let it ride up and up and up until these drastic "mood" swings from $400 to $700 and then back down to $500. I just think they should have just paid dividends and split the stock and leave it at that.
The point of buying back stock isn't to have less stock, it's to increase the value of the remaining stock going forward, which should return more value to existing shareholders if/when the stock price rises.
Splitting it splits the value of each individual share to make it more affordable to buy a piece of Apple for low volume stock traders, but doesn't have any effect on the total value (price x quantity) of the stock held by existing shareholders.
The goals of buying back and splitting stock do not conflict.
I don't know what anyone else thinks, but based on what i know from listening and reading about what Apple's done and plans on, I think they'll make profits, but they aren't going to grow that fast and I think for the time being the stock is going to be a dividend stock cheap enough for people to buy and there will be a shift in investors and I don't see the stock moving to higher plateaus for a while until they can prove they will get back to a 30% year to year growth rate without destroying profit margins. I think it's going to be stuck in between two numbers and I'll figure out what those two numbers are later after the stock split. In the mean time, I'm just going to be looking at and caring about the P/E ratio and see where it's new range is. I think it's going to take a hit after the stock split. That's my gut feeling.
I really think that the repurchases are happening along with the stock split is Apple's way of working with the large institutional players to shift their positions from growth related funds into dividend related funds and Apple's trying to appease both crowds at the same time. That's the only reasoning that would make sense.
Before you respond to this notion, just give it a day to THINK about it. The Board of Directors/CEO are ALWAYS dealing with the pressures of the large institutional buyers since they have lots of voting power.
I read about several other companies that did things that didn't get a lot of public support and it came out that they were getting pressure from the large institutional investors and they were kind of calling the shots behind the scenes. Right, wrong, indifferent, the large investors unfortunately can be the ones calling the shots and we don't always here about it.
Yes, so? Apple are hardly cash strapped, and the buy back increases existing shareholders proportional ownership. That's the point.
So? Apple are in an unusual position of being among the most valuable companies in the world, very cash rich, with a high stock price, yet not viewed as a secure stock. Unusual positions give rise to unusual reactions.
Microsoft is not a growth stock. That doesn't mean the buy back was a bad idea, if the stock is stuck at the same position that suggests it was a neutral idea.
Possibly, though that remains to be seen. If it's the case then the buy back is a neutral activity, it doesn't affect the stock value one way or the other, and the stock split may increase small volume trading. No problem.
US cash flow and the money raised in the bond sale a while back. This isn't a secret, so not sure why it's causing you confusion.
Buying back stock does not increase the stock price, it increases the proportional value of the remaining stock, which will be beneficial to shareholders in the event of growth.
Splitting stock only reduces the stock price proportionate to the new reduction in share that it represents. It does not in itself reduce the price:value ratio.
There is no conflict here because the goals are different, the buy back benefits existing shareholders who hold the stock expecting growth, the split benefits low volume traders who are buying and selling g the stock.
These are two entirely different groups of shareholders. Neither are affected by the other.
See above. The buy back rewards long term investors who see growth potential. It's a show of faith in the company.
This page has plant of information for you on the benefit of a company owning more of itself: http://en.wikipedia.org/wiki/Share_repurchase
Why not? As mentioned above, different goals that don't conflict. Apple are more than capable of patting their head and rubbing their tummy at the same time.
Yes, so? Apple are hardly cash strapped, and the buy back increases existing shareholders proportional ownership. That's the point.
So? Apple are in an unusual position of being among the most valuable companies in the world, very cash rich, with a high stock price, yet not viewed as a secure stock. Unusual positions give rise to unusual reactions.
Microsoft is not a growth stock. That doesn't mean the buy back was a bad idea, if the stock is stuck at the same position that suggests it was a neutral idea.
Possibly, though that remains to be seen. If it's the case then the buy back is a neutral activity, it doesn't affect the stock value one way or the other, and the stock split may increase small volume trading. No problem.
US cash flow and the money raised in the bond sale a while back. This isn't a secret, so not sure why it's causing you confusion.
Buying back stock does not increase the stock price, it increases the proportional value of the remaining stock, which will be beneficial to shareholders in the event of growth.
Splitting stock only reduces the stock price proportionate to the new reduction in share that it represents. It does not in itself reduce the price:value ratio.
There is no conflict here because the goals are different, the buy back benefits existing shareholders who hold the stock expecting growth, the split benefits low volume traders who are buying and selling g the stock.
These are two entirely different groups of shareholders. Neither are affected by the other.
See above. The buy back rewards long term investors who see growth potential. It's a show of faith in the company.
The whole things is awfully strange and yes, I do believe buying shares to increase the share price and then increasing the number of share to decrease the share price is opposite. I've never seen this before and I don't think others have either.
Well, whatever..
Are you purposely being obtuse? I sincerely hope you're just trolling now because if you honestly can't understand these simple concepts you need to just stop.
The whole things is awfully strange and yes, I do believe buying shares to increase the share price and then increasing the number of share to decrease the share price is opposite. I've never seen this before and I don't think others have either.
Well, whatever..
They are not related to each other in any way. There is no connection or correlation to buying back shares and a stock split.
If it was a good idea to buy back shares before the split, then it will still be a good idea to buy them back after the split for 1/7 the price. Buying back shares increasing remaining stockholders value while a shares split does NOTHING to affect stockholders value.
Its like asking "why would someone both want to earn more money AND break a $20 bill into $5 bills?" You can see that the size of the bill doesn't change the total value to the person who owns them. But earning more money WILL make them more wealthy. The goal of breaking your $20 is completely independent of your purpose in continuing to work and earn money. Similarly, splitting the stock means NOTHING to the shareholders or the company in terms of value. But buying back shares DOES increase the value of people's remaining stock (independent of stock splits).
The only thing a stock split does is make it easier for investors with small amounts of money to invest due to it not being such a big chunk of money in the same way that having a $5 bill is easier to spend at a dollar store than a $100 bill. If it weren't for this, there is no real difference in anyway before and after the stock split.
Are you purposely being obtuse? I sincerely hope you're just trolling now because if you honestly can't understand these simple concepts you need to just stop.
I was going to say the same thing about you. I'm not trolling, I've just never seen a company do large block purchases and a massive stock split within a fairly short period of time and I don't think anyone else here has either.
If you have, name a stock that's done that. Because I can't.
Different types of investors have different types of habits, and this stock is obviously changing the type of investor with a different habit and until this thing normalizes out from a shares outstanding point of view. It's a little too weird for me, I just get nervous and if I were to look at Apple stock right now, I wouldn't buy in right now, I would wait unit I see a low point and then maybe buy in, but not have the same expectations of the ROI since it's not in high growth anymore.
I can't help if we think differently on this. You have your opinions but calling me a troll is really being juvenile and childish. So please stop with the name calling. BTW, I can understand the simple concepts just fine. So, stop your assumptions.
They are not related to each other in any way. There is no connection or correlation to buying back shares and a stock split.
If it was a good idea to buy back shares before the split, then it will still be a good idea to buy them back after the split for 1/7 the price. Buying back shares increasing remaining stockholders value while a shares split does NOTHING to affect stockholders value.
Its like asking "why would someone both want to earn more money AND break a $20 bill into $5 bills?" You can see that the size of the bill doesn't change the total value to the person who owns them. But earning more money WILL make them more wealthy. The goal of breaking your $20 is completely independent of your purpose in continuing to work and earn money. Similarly, splitting the stock means NOTHING to the shareholders or the company in terms of value. But buying back shares DOES increase the value of people's remaining stock (independent of stock splits).
The only thing a stock split does is make it easier for investors with small amounts of money to invest due to it not being such a big chunk of money in the same way that having a $5 bill is easier to spend at a dollar store than a $100 bill. If it weren't for this, there is no real difference in anyway before and after the stock split.
Apple can't buyback enough shares after the split to make a dent in it to make any difference for the long term, it's just short term hits for short term gains. I personally think at this time, they would be better off not buying back the stock and just letting it split.
I've never seen Tim Cook on a Mexican restaurant on a Tuesday. What's your point?
[QUOTE]If you have, name a stock that's done that. Because I can't.[/QUOTE]
WHY THE **** ARE YOU CONCERNED ABOUT WHAT HAS BEEN DONE BEFORE AND WHAT HASN'T. THESE THINGS ARE NEITHER CONNECTED NOR CONTRADICTORY. YOU'VE MADE THAT UP IN YOUR HEAD. IF YOU DON"T UNDERSTAND THAT BUYING BACK A STOCK WHEN IT'S LOW INCREASES THE VALUE OF THE STOCK FOR EVERYONE AND STOCK SPLITS DON'T AFFECT THE VALUE FOR ANYONE BUT MAKE IT EASIER TO BUY WITH A NEW LOWER PRICE POINT THEN YOU NEED TO STOP. JUST STOP. GO READ ONE OF THE BILLION ARTICLES ON THESE SIMPLE ACTIONS.
I've never seen Tim Cook on a Mexican restaurant on a Tuesday. What's your point?
WHY THE **** ARE YOU CONCERNED ABOUT WHAT HAS BEEN DONE BEFORE AND WHAT HASN'T. THESE THINGS ARE NEITHER CONNECTED NOR CONTRADICTORY. YOU'VE MADE THAT UP IN YOUR HEAD. IF YOU DON"T UNDERSTAND THAT BUYING BACK A STOCK WHEN IT'S LOW INCREASES THE VALUE OF THE STOCK FOR EVERYONE AND STOCK SPLITS DON'T AFFECT THE VALUE FOR ANYONE BUT MAKE IT EASIER TO BUY WITH A NEW LOWER PRICE POINT THEN YOU NEED TO STOP. JUST STOP. GO READ ONE OF THE BILLION ARTICLES ON THESE SIMPLE ACTIONS.
Get over it. It's not commonly done at the same time. Are you afraid that I'm going to scare people away form buying the stock so you can't make as much money?
If they make any large bulk purchases it would be nice to know a day ahead of when they do it. I think that would be nice. :-)
1) Of course it's not down because there are so few companies throughout history that have been in Apple's position but, again, for the last time, THESE ARE NOT CONTRADICTORY EVENTS.
2) Anyone reading this thread, sans you, will see that Apple is a great buy. All you're doing is showing a) how fucking ignorant you are on this rudimentary subject, and b) your inability to educate yourself on the benefits of stock posits, buybacks, and dividends.
3) If you're goal is to keep people from buying Apple from a poorly contrived and invented argument then how can you say you're not trolling… not that I'd expect a troll to admit it.
Apple can't buyback enough shares after the split to make a dent in it to make any difference for the long term, it's just short term hits for short term gains. I personally think at this time, they would be better off not buying back the stock and just letting it split.
The stock split has no effect on the value of shares that Apple can buy back. They can buy back EXACTLY the same value as they could before.
If Apple could buy back $1B worth of shares (and a certain % of their total) BEFORE the split, then they can buy back exactly the same amount ($1B worth) AND the same % of their total stock.
Again, the split CHANGES NOTHING and has absolutely 0 effect on the effect of their buyback.
I feel like I am trying to explain to my kid that a $20 is worth the same as 20 $1 bills but they just can't understand it.
Apple will be buying back 7x more shares per day after the stock split but each share will cost 1/7 of what it did before. ITS THE SAME total value and its THE SAME % of the total outstanding shares.
It's not commonly done at the same time.
Since these are 2 completely independent events that don't affect each other, they occur close to each other at times and far from each other at other times.
It just doesn't matter since neither event has any effect on the other.
As I keep saying, the stock split makes absolutely no difference to the rationale behind, or the method of, the buy back. They're completely mutually exclusive in intent and impact.
1) Of course it's not down because there are so few companies throughout history that have been in Apple's position but, again, for the last time, THESE ARE NOT CONTRADICTORY EVENTS.
2) Anyone reading this thread, sans you, will see that Apple is a great buy. All you're doing is showing a) how fucking ignorant you are on this rudimentary subject, and b) your inability to educate yourself on the benefits of stock posits, buybacks, and dividends.
3) If you're goal is to keep people from buying Apple from a poorly contrived and invented argument then how can you say you're not trolling… not that I'd expect a troll to admit it.
When they bought shares a couple of days ago, it wasn't at a low point, it was at a high point. The 52 week low was under $400 a share, so they bought at closer to a high point for the 52 week range. I think they did it to prevent a massive selloff right when they announced the Stock Split.No, my goal is to not have people buy when the stock is overvalued. I think it's overvalued or at least very close to that. Look at the stock price last year. It dipped lower during the summer months, so if I want people to maximize their profits for people trying to get into the stock, I would advise them waiting until they see a much lower P/E ratio, because they have traded at a much lower P/E, I think they've gone as low as 11 or slightly lower within the last year. Now, for those expecting the stock to reach $700 like it was last year, I would advise it's not going to happen that soon and they'd be better off just hanging on to the stock, do some dividend reinvestments and wait a few more years and HOPEFULLY it will hit $700 (equivalent).
I'm all for buying low and selling high, which is about as fundamental as possible. I don't see this as a low point moving forward, my gut feeling is that it will move lower within the next 6 months.
I think you are conjuring up misleading statements about MY intentions.. Your intentions are purely selfish ones, mine aren't. I just don't like it when people get suckered into thinking this stock is trading at a low point right now. What also concerns me is the Beta, it's traded at around 1 for many, many years, and it's not. It's at .7, that signifies a different level of stability. I don't like stocks that have erratic behavior. Apple bought stock because they didn't want a massive sell off the next day after their announcement, and I think that's artificially sending people the idea that this stock is going to take off like a rocket ship like it's trading at a low point. I don't think it is, that's all.
What I don't like is getting used to Apple just being the savior of the stock price THINKING they are always going to buy back shares forever when the stock is about to take a dump.
I personally have not been real thrilled with Cooks' method of handling certain things over the past couple of years. He has, IMO, room for improvement. I don't just prescribe to the "I LOVE EVERYTHING THEY DO", just because I'm a fan of the platform. I don't agree with everything that's been done, I do think there's room for improvement and I'm not just going to THINK Cook can't do no wrong, because he hasn't earned a solid A in my book yet. He's got a solid B, maybe B+, but right now, i think he's at a B for me.
Do you know that they haven't made a product announcement in about 7 months? That's a long time for Apple not to make a product announcement. Their last product announcement was in the beginning of Oct, so I could Oct, Nov, Dec, Jan, Feb, March and now April with no product announcements. That's a long time in the high tech industry with a product mix like them.
The stock split has no effect on the value of shares that Apple can buy back. They can buy back EXACTLY the same value as they could before.
If Apple could buy back $1B worth of shares (and a certain % of their total) BEFORE the split, then they can buy back exactly the same amount ($1B worth) AND the same % of their total stock.
Again, the split CHANGES NOTHING and has absolutely 0 effect on the effect of their buyback.
I feel like I am trying to explain to my kid that a $20 is worth the same as 20 $1 bills but they just can't understand it.
Apple will be buying back 7x more shares per day after the stock split but each share will cost 1/7 of what it did before. ITS THE SAME total value and its THE SAME % of the total outstanding shares.
But Apple can't continue to constantly buy back shares to prevent sell offs forever. They don't have unlimited abilities to do this and to always think that Apple is always going to "SAVE THE DAY" from sell offs when the stock shouldn't be trading as high as it is, is being a little foolish. I look at the P/E to see when it's over or undervalued. As of the last 52 weeks, it's approaching the maximum P/E, which would indicate it's overvalued. I wouldn't buy this stock until it reaches a undervalued state to have a much better chance of a better ROI.
You don't have repeat what a Stock split is, what you should be more concerned about is how the stock is going to behave once their 7x as many shares because look at what happened to Microsoft after they reached their peak in shares.
I learned what a stock split was at 10 years old in 1969, because I was pointing to my father about IBM and other stocks that were splitting routinely and I wanted to understand why the stock price ran up to 400 a share and then went down to about 40 and was doing it consistently. My father actually bought some IBM stock after I pointed this out to him. Me? I was just looking at numbers on a daily basis in WSJ because i liked looking at number fluctuations as a inquisitive kid. I actually pointed out all of the time some of the best stocks before I studied finance in college, so I'm very familiar with stock splits. But I'm also familiar with seeing stocks go from a high growth state to a dividend stock which has less volatility. I just think Apple is creating a false sense of security thinking they are always going to buy back stocks and save everyone's bacon. We don't know everything that goes on behind the scenes with the discussions between Apple executives and these big institutional investors unless it's publicized. Just beware of Apple's purchase behavior because they are more about saving what the market would do under normal circumstances. All Apple did when they bought shares the other day was delay a drop in share price, it's just temporary false sense of reality.
The product plan really has nothing to do with buy backs and stock splits.
But it does prove whether this company is on track for better growth and a more stabilized growth for all quarters rather than just the Dec and March quarters. I like to see ALL quarters increase at a consistent rate and they need more consistent product announcements. I just don't like them pumping out everything in a one month period versus constant quarterly product releases. That's all. I think it's dangerous what they are doing. I'm just VERY cautious right now until I see some thing that indicates something different than what happened over the past 2 years. That's all. I'm just being cautious.