Carl Icahn says Apple should buy more of its 'dramatically undervalued' stock, reveals valuation of

2456

Comments

  • Reply 21 of 107
    tmaytmay Posts: 5,498member
    Quote:
    Originally Posted by sog35 View Post

     

     

    No one is beyond criticism even Mr Cook.  Not being critical means you are a fanboy.  As an investor I always need to be critical or I'll lose my shirt.

     

    That was my mistake with GTAT.  I was not critical enough of them and though if Apple invested $570M I can invest a few thousand.


    You were ranting, which for the record, is quite beyond being critical.

     

    And for the record, I am a fanboy, and have been since 1984 when I got my Mac 128. So pardon me if I look at Apple a bit differently than you.

     

    Also, look at my comments. I made mention that Apple probably had a contract that would cover every contingency, including bankruptcy. Assuredly, they do. Apple has collateral on all the equipment, and also owns and or is able to license all of the technology needed to run the facility and make sapphire boule, and sapphire components. They weren't even required to buy anything. There was very low risk.

     

    Today we will find out what this is all about from GTAT's perspective, but my guess is that they underdelivered.

  • Reply 22 of 107
    pfisherpfisher Posts: 758member
    Quote:

    Originally Posted by sog35 View Post

     

     

    No one is beyond criticism even Mr Cook.  Not being critical means you are a fanboy.  As an investor I always need to be critical or I'll lose my shirt.

     

    That was my mistake with GTAT.  I was not critical enough of them and though if Apple invested $570M I can invest a few thousand.




    That's the problem with buying individual stock. It's not really a good idea. I almost broke down and bought GTAT. How could you lose?

     

    Anyway, it doesn't matter how much Apple is worth. Every company is affected by forces greater than itself (like the stock market, in general).

     

    Warren Buffet recently said it himself: best to be diversified in no-load (low cost) index funds,  like Vanguard (as he specifically pointed out). Anyway, index funds beat fund managers 80% of the time (and without the high cost).

  • Reply 23 of 107
    neilmneilm Posts: 917member
    Quote:

    Originally Posted by no25 View Post



    Does anybody else wish this guy would just shut the hell up

     

    Hell yes. Icahn is a financial leach.

  • Reply 24 of 107
    brucemcbrucemc Posts: 1,541member
    Quote:

    Originally Posted by sog35 View Post

     

     

    Great post.

     

    I feel the same way.  I just don't understand why some Apple investors hate on Ichan.  The man is supporting Apple unlike the thousands in the media who are constantly BASHING and HATING on Apple (bendgate anyone?)


    I agree that what Icahn proposed last year, and is proposing in general now, is in the general interest of Apple shareholders, provided it is done reasonably (not excessive debt).  Buying back shares when price was lower was absolutely the right thing to do, as Apple was undervalued significantly, by anyone who figured they had a 10%+ growth rate possible (which we are seeing they now do, and FY2015 could be much higher).  Apple is still undervalued "in my opinion", so some buybacks (more than is currently in the plan) would seem justified.

     

    However, I certainly don't "trust" Carl Icahn at all, and he has a large track record to give Apple (long term) shareholders pause.  What he is saying now (in general - not at the same magnitude) is reasonable regarding share buybacks, but I don't doubt he may have other plans he would like to execute.  Apple is an undervalued company, generating huge cash flows, but also one very much investing in the future and focusing on great products, and being conservative with cash.  It is certainly feasible he could have thoughts of displacing current management for a team focused on generating as much cash as possible in short term (e.g. less investment, less quality), blowing the cash backlog, pushing up the stock price in short term - but then leaving Apple without its long-term ability to grow.  

     

    As Apple buys back ever more shares, but Icahn holds on, his influence increases.  Something to think about.

  • Reply 25 of 107
    Quote:
    Originally Posted by tmay View Post

     



    Critically blamed Apple/Cook is what you did, and you left a trail to prove that.

     

    Now that the facts come in, you've tried to roll that back. 

     

    Here's the thing.

     

    Cook runs a company to maximize its long term future. Icahn wants to maximize his profits at a point in time. Either or both may be beneficial to the investor, but I trust Cook. I don't trust Icahn.

     

    Cook and Icahn were in agreement on the buyback, but Cook's leadership is driving the company profits today, not Icahn's.




    I agree with this guy! Even if Icahn nailed some past predictions, the current price of APPLE is not by a long shot his merit. APPLE is not priced today the way it is because of the 14B buyback, but because of a better satisfaction of the market "expectancy" from Apple in terms of products recently announced (watch, phablet).

     

    If Icahn really considers Apple stock so undervalued today, and really believes in the 200 mark he predicted, then let him sell all other assets and buy Apple. Wouldn't that make more sense?! Well no, if you have another way to consolidate your position, with someone else's money.

  • Reply 26 of 107
    kibitzerkibitzer Posts: 1,114member
    Sometimes there's nothing dumber than a herd mentality, and here we have.a herd of panicked posters who want to gallop off in the completely wrong direction at the mere mention of the name "Icahn". With respect to Apple, Icahn is not the wolf. He's the border collie, trying to steer Apple stock around the huge marketplace mountain of inertia that fails to adequately value AAPL based on its solid prospects for future earnings and global market share growth. The last time the market so badly undervalued AAPL was 2009 when the analyst community proved itself mentally incapable of grasping the huge future impact of iPhone subscription plan deferred revenues, due to GAAP standards in place at the time. So get over the herd mentality. Icahn is not going to hurt anybody. He just nips at people's heels from time to time.

    Don't Be Bovine.
  • Reply 27 of 107
    Quote:
    Originally Posted by Kibitzer View Post



    Sometimes there's nothing dumber than a herd mentality, and here we have.a herd of panicked posters who want to gallop off in the completely wrong direction at the mere mention of the name "Icahn". With respect to Apple, Icahn is not the wolf. He's the border collie, trying to steer Apple stock around the huge marketplace mountain of inertia that fails to adequately value AAPL based on its solid prospects for future earnings and global market share growth. The last time the market so badly undervalued AAPL was 2009 when the analyst community proved itself mentally incapable of grasping the huge future impact of iPhone subscription plan deferred revenues, due to GAAP standards in place at the time. So get over the herd mentality. Icahn is not going to hurt anybody. He just nips at people's heels from time to time.



    Don't Be Bovine.

     

    All good advice Sir in general. But one has to make a distinction between how a company is ran and able to generate revenue and profits for it's investors and how a company's stock is traded and valued. As for your own statement: "Stock prices are strongly influenced by irrational reasoning" i couldn't agree more. Despite the fact that Apple overall reported record after records, still the stock plummeted in the past few years. 

     

    So for the serious investor that's on the ride for the long term, Apple's decisions in terms of product strategy and Apple's financial reports, is quite enough. For the stock speculator, actual price of the stock right NOW, is probably much more appealing, milking where there is scent of milk. That's why you see a speculator much more active on the stock market, selling at highs and buying at lows, manipulating and milking without any interest, other than his own personal gain.

  • Reply 28 of 107
    schlackschlack Posts: 708member
    hard to say what the price should be, but they certainly have upwards revenue momentum.

    i think of buying back shares like putting your money in a long term bond. the market will shut up about your cash and not force you to make stupid acquisitions, and to some degree or another, the money will still around if you need it one day.
  • Reply 29 of 107



    He did seem to force the issue last time and ultimately was correct. Maybe he is correct this time too. The problem is he is basing his valuation on what he believes will be events going out two or more years. That's pretty unreliable in most businesses let alone a tech company oriented towards consumers and in an industry where things can change in a heartbeat. He might be proven right, but Ichan's primary motivation is own wallet and cashing in on his holdings. I doubt he has any intention of holding on to his Apple shares for a time period even remotely resembling the horizon he mentions in his statement. 

  • Reply 30 of 107
    SpamSandwichSpamSandwich Posts: 33,408member
    rogifan wrote: »
    So Sog is back on the Apple/Cook bandwagon now. :lol:

    Changed his short position to long?
  • Reply 31 of 107
    SpamSandwichSpamSandwich Posts: 33,408member
    tommikele wrote: »

    He did seem to force the issue last time and ultimately was correct. Maybe he is correct this time too. The problem is he is basing his valuation on what he believes will be events going out two or more years. That's pretty unreliable in most businesses let alone a tech company oriented towards consumers and in an industry where things can change in a heartbeat. He might be proven right, but Ichan's primary motivation is own wallet and cashing in on his holdings. I doubt he has any intention of holding on to his Apple shares for a time period even remotely resembling the horizon he mentions in his statement. 

    You and another poster here need to pay more attention to how "Icahn" is spelled. He's not Chinese.
  • Reply 32 of 107
    flaneurflaneur Posts: 4,526member
    kibitzer wrote: »
    Sometimes there's nothing dumber than a herd mentality, and here we have.a herd of panicked posters who want to gallop off in the completely wrong direction at the mere mention of the name "Icahn". With respect to Apple, Icahn is not the wolf. He's the border collie, trying to steer Apple stock around the huge marketplace mountain of inertia that fails to adequately value AAPL based on its solid prospects for future earnings and global market share growth. The last time the market so badly undervalued AAPL was 2009 when the analyst community proved itself mentally incapable of grasping the huge future impact of iPhone subscription plan deferred revenues, due to GAAP standards in place at the time. So get over the herd mentality. Icahn is not going to hurt anybody. He just nips at people's heels from time to time.

    Don't Be Bovine.

    You might better say "ovine"—sheeplike. Come to think of it, he does resemble a wolf. I'm having trouble with border collie.
  • Reply 33 of 107



    The influence of irrational reasoning over a horizon of two years or more is minimal. The distinction between investing and trading is frequently lost on the public and after a couple of decades on the Street the stories of disaster I've heard coming from retail accounts who tried to trade instead of invest never ceases to amaze me. Retail customers trying to trade are, in most circumstance, not going to do much better than they would in a casino. You make the distinction and I applaud that. That distinction is lost on most people outside of the business. When I read some of the comment boards on sites like CNBC and similar places I can understand the thoughts that arise for less than honest people in the business. The speculator and the investor are two different species and some retail investors get a little bit confused and emotionally attached to things they shouldn't.

  • Reply 34 of 107



    I am so grateful you took the time to inform me of my spelling error. Your superiority in all things related to spelling is dutifully noted. There is no doubt your superiors in the Department of Sphincter Police will be pleased with the vigilance you have demonstrated in the performance of your job.

  • Reply 35 of 107
    tommikele wrote: »

    I am so grateful you took the time to inform me of my spelling error. Your superiority in all things related to spelling is dutifully noted. There is no doubt your superiors in the Department of Sphincter Police will be pleased with the vigilance you have demonstrated in the performance of your job.

    You're welcome.
  • Reply 36 of 107
    nobodyynobodyy Posts: 377member
    Quote:
    Originally Posted by AndreiD View Post

     

    Typical jewish behavior.


     

     

    Ohhhhhhh my god. 

  • Reply 37 of 107



    The guy is about making money and exploiting differentials between market prices and underlying values. He has quite a record of success in doing so. Like the Godfather said, "He always makes money for his partners."

  • Reply 38 of 107
    Quote:

    Originally Posted by techno View Post

     

    I own Apple Stock but I am not a savvy investor. Can someone explain why Icahn wants this and what the impact would be on the company and the investors?


     

    Simplified version:  Mr. Icahn'tshutup owns about $3bn in Apple stock (more or less) so if he can get Apple to buy back shares and ultimately push the stock price to $200/share he will have $6bn in stock.  Yay for him.

     

    He's an insufferable and entirely transparent douchebag.

  • Reply 39 of 107
    techno wrote: »
    I own Apple Stock but I am not a savvy investor. Can someone explain why Icahn wants this and what the impact would be on the company and the investors?

    Each share represents partial ownership of the company. If there are a million outstanding shares, each share is worth a millionth of the company. If the company has extra cash, they can different things with it to increase value. If they think the company is undervalued, they can buy back shares and retire them, which means each remaining share will be worth a larger percentage of the company (but of course it will be a larger percentage of a company with less cash). If analysts do their math right, this will increase numbers like Earnings Per Share and Price-Earnings ratio, so to some degree it can help investors see the stock as more valuable, even if initially the value is kind of just redistributed. It also demonstrates to everyone that management has faith in the company's future prospects.

    But it should be noted that the company's cash, like the rest of the company, belongs to the shareholders. So if Carl owns $3 billion in stock, about $637 million of Apple's cash technically belongs to him, but is not directly controlled by him. If somebody else was controlling that much of my money, and I had strong opinions about what should be done with it, I'd probably speak up too.

    What I don't understand is why they can't use the foreign cash to do this without having to repatriate it first. Companies buy Apple stock with foreign cash every day, through brokers. You can buy the shares, or depositary receipts denominated in other currencies that are essentially contracts that designate you as the owner of the actual shares.
  • Reply 40 of 107
    newbeenewbee Posts: 2,055member



    Here's the problem I have with Mr. Icahn. His past history is littered with companies that he "took an interest in" that are no longer with us. Carl is fond of saying things like: "for the good of All Shareholders",  but he sits there with over 50 million shares of Apple and, like the saying goes:  All men are created equal....but some are more "equal" than others. 

     

    Carl Icahn cares a whole lot more about himself than he does about anyone else, don't kid yourself. His past history makes that obvious. His letter to Tim today is akin to the crap that comes out of the mouth of a "snake oil salesman". They butter up their intended victim with 100s of words of praise to disguise their real intent, in this case, to make his stake in Apple represent a larger percentage of outstanding shares than they are today....if that were to continue Apple could wind up joining those other companies as a notch in Icahn's belt.

     

    if they are not careful, that stake that he has today could be driven through Apple's heart tomorrow.   Once a snake, always a snake.

Sign In or Register to comment.