Instead of the usual announcement around the 20th they decided to postpone the news for one more week so all their competitors have a little breathing room.
Or maybe Apple is having a little fun making them wait an extra week so they can suffer in agony waiting for the inevitable.
Or maybe it takes a wee bit longer to count all of that cash…after that slamdamnfu@kingtastic quarter!
Serious question - does anyone else feel like the inevitable analyst narrative after this blowout quarter will be along the lines of "unsustainablitiy" i.e. yes, biggest quarter ever, but now it's more clear than ever that Apple is an iPhone company and it's flatline from here ..."? It seems almost as if Apple is going to sell off no matter, or especially if, they post record earnings.
It's a bit stunning that AAPL is down some 13% since the recent high of $119 more than a month ago. The stock has always been at the mercy of the market. If the same thing happened at 95% of other businesses, they'd be rioting in the streets. Stay strong, go long!
The only possible way Apple would or could go private is if they really started hurting, sort of like how the whole Dell going private scenario occurred.
You are, of course, entitled to your opinion. I happen to disagree. We will see how it all plays out over the next few decades.
Current Market Cap is lower than two years ago. Apparently no progress since then! Enormously higher profits are just a future drop in profits waiting to happen. The stock market has lost touch with reality. Cook tried to tie the stock to how well they're doing, with a big dividend and big stock buybacks, to no avail. At least so far.
Has any company ever had record breaking quarter after record breaking quarter, forever? None, so who's not in touch with reality?
You are, of course, entitled to your opinion. I happen to disagree. We will see how it all plays out over the next few decades.
This decade, next decade, who has the money to buy Apple to take it private unless the stock tanks? Apple is among the most valuable companies on the planet, no entity short of a state, or a coalition of either the other most valuable companies on the planet or the richest hedge funds, could possibly afford to take Apple private.
This decade, next decade, who has the money to buy Apple to take it private unless the stock tanks? Apple is among the most valuable companies on the planet, no entity short of a state, or a coalition of either the other most valuable companies on the planet or the richest hedge funds, could possibly afford to take Apple private.
That article is nonsense. Apple does not have the cash to buy itself, it never will since the cash Apple holds is part of its valuation - i.e. the rest of the company would have to have zero or negative value, and crucially a company is not allowed to own itself, it is not legally possible under company law.
That article is nonsense. Apple does not have the cash to buy itself, it never will since the cash Apple holds is part of its valuation - i.e. the rest of the company would have to have zero or negative value, and crucially a company is not allowed to own itself, it is not legally possible under company law.
The Corporations Act expressly prohibits companies from owning shares in themselves. With that said why can't Apple continue buying back and retiring stock. Potentially if all the cards were to fall in place over the next several years couldn't they eventually but back all outstanding shares of stock?
No, because at the end of it, after they've most likely bankrupted themselves, there will be one guy holding the one remaining share, that has the worth of the entirety of Apple plus cash (or more likely, minus debt). Apple has been taken private, at great cost to the corporation, and for the sole benefit of the last shareholder who didn't sell.
No, because at the end of it, after they've most likely bankrupted themselves, there will be one guy holding the one remaining share, that has the worth of the entirety of Apple plus cash (or more likely, minus debt). Apple has been taken private, at great cost to the corporation, and for the sole benefit of the last shareholder who didn't sell.
From the link (a very good explanation) - Again, you need to have a basic understanding of the laws governing American publicly-traded companies. Remember who has the power in America - I'll give you a hint... 'Corporate America' means more than just that!! You can't stop a company from going private if they want to and if they can cover their market stock price plus a premium for those holding out. All they need is cash or extremely low financing rates (of which Apple has access to both). Technically, they could take a $600 Billion loan today (if they could find a bank who could and would finance that) and stop publicly trading their stock.
Here’s a step-by-step explanation of what will happen:
- The company decides to go private and decides on the price it will buy back the shares at, usually the company gives a premium of at least 20% over the price of the last trading day.
- Shareholders are given a few days to sell their shares through their broker at the specified price.
- After a few days, the stock will no longer trade on the public market (meaning that the company will delist itself).
- Once the stock is delisted, shareholders are no longer allowed to sell their shares through their broker. The company will then “buy them out” forcefully, which means that the company will contact them and send them a check/cash/wire totaling the price of their shares at the specified price.
- Large investors (those possessing at least 1% of the total shares) may enter into negotiations with the company to own a stake in the company.
Apple will go private one day. Mark my words. There is no reason for them to remain publicly traded. Will take years, but they will march toward that goal.
Who will make the decision? It would be down to the major shareholders, not the people running the company. When Dell went private, Michael Dell was a large shareholder but still had to get the backing of the other shareholders and only got 70% approval.
Tim Cook has said that he likes that the ownership of Apple is broad. It could be far worse being private and solely owned by profit-driven institutions.
From the link (a very good explanation) - Again, you need to have a basic understanding of the laws governing American publicly-traded companies. Remember who has the power in America - I'll give you a hint... 'Corporate America' means more than just that!! You can't stop a company from going private if they want to and if they can cover their market stock price plus a premium for those holding out. All they need is cash or extremely low financing rates (of which Apple has access to both). Technically, they could take a $600 Billion loan today (if they could find a bank who could and would finance that) and stop publicly trading their stock.
Here’s a step-by-step explanation of what will happen:
- The company decides to go private and decides on the price it will buy back the shares at, usually the company gives a premium of at least 20% over the price of the last trading day.
- Shareholders are given a few days to sell their shares through their broker at the specified price.
- After a few days, the stock will no longer trade on the public market (meaning that the company will delist itself).
- Once the stock is delisted, shareholders are no longer allowed to sell their shares through their broker. The company will then “buy them out” forcefully, which means that the company will contact them and send them a check/cash/wire totaling the price of their shares at the specified price.
- Large investors (those possessing at least 1% of the total shares) may enter into negotiations with the company to own a stake in the company.
Thanks for the bullet lecture, but while those steps are plausible, you are missing the first one, which is the shareholder coalition with a large enough vested stake that they can push this through. They would be the ones taking Apple private, Apple wouldn't be buying itself to own itself, since such a thing is impossible. Apple would be buying out the other shares to reduce the shareholder pool down to a select few. Even that is stretching credulity because of the amount of money involved (a $600bn loan is not an easy thing to come by), the fact that the shares are so dispersed amongst a large investor base, and because Apple executives have little to gain from such a move; it introduces a needless layer of direct complexity to their governance structure.
There's a reason why Dell, a company valued at 1/20th the market cap of Apple is the largest* public firm ever to be taken private (and after a ton of wrangling from Michael Dell), it's very difficult, costly, risky, and impractical to do at that scale.
Thanks for the bullet lecture, but while those steps are plausible, you are missing the first one, which is the shareholder coalition with a large enough vested stake that they can push this through. They would be the ones taking Apple private, Apple wouldn't be buying itself to own itself, since such a thing is impossible. Apple would be buying out the other shares to reduce the shareholder pool down to a select few. Even that is stretching credulity because of the amount of money involved (a $600bn loan is not an easy thing to come by), the fact that the shares are so dispersed amongst a large investor base, and because Apple executives have little to gain from such a move; it introduces a needless layer of direct complexity to their governance structure.
There's a reason why Dell, a company valued at 1/20th the market cap of Apple is the largest* public firm ever to be taken private (and after a ton of wrangling from Michael Dell), it's very difficult, costly, risky, and impractical to do at that scale.
* I think. One of the largest at least.
Top Institutional Holders
Holder
Shares
% Out
Value*
Reported
Vanguard Group, Inc. (The)
327,063,967
5.58
32,951,694,675
Sep 30, 2014
State Street Corporation
242,255,909
4.13
24,407,282,831
Sep 30, 2014
FMR, LLC
173,987,606
2.97
17,529,251,304
Sep 30, 2014
BlackRock Institutional Trust Company, N.A.
158,746,999
2.71
15,993,760,149
Sep 30, 2014
Bank of New York Mellon Corporation
89,007,388
1.52
8,967,494,341
Sep 30, 2014
Northern Trust Corporation
83,437,298
1.42
8,406,307,773
Sep 30, 2014
Invesco Ltd.
70,230,794
1.20
7,075,752,495
Sep 30, 2014
BlackRock Fund Advisors
67,124,320
1.14
6,762,775,240
Sep 30, 2014
Wellington Management Company, LLP
60,062,760
1.02
6,051,323,070
Sep 30, 2014
JP Morgan Chase & Company
58,519,182
1.00
5,895,807,586
Sep 30, 2014
There is no way these companies would be convinced to simply sell their holdings.
There is no way these companies would be convinced to simply sell their holdings.
Wow, um, yes they would, if Apple decides to go private and these companies are forced to when the stock actually gets delisted. Did you not read the bullet points in my post? They would have no choice. If a company wants to go private and has enough money to pay the investors, it sure as hell can do this. It's a free country!!
Thanks for the bullet lecture, but while those steps are plausible, you are missing the first one, which is the shareholder coalition with a large enough vested stake that they can push this through. They would be the ones taking Apple private, Apple wouldn't be buying itself to own itself, since such a thing is impossible. Apple would be buying out the other shares to reduce the shareholder pool down to a select few. Even that is stretching credulity because of the amount of money involved (a $600bn loan is not an easy thing to come by), the fact that the shares are so dispersed amongst a large investor base, and because Apple executives have little to gain from such a move; it introduces a needless layer of direct complexity to their governance structure.
There's a reason why Dell, a company valued at 1/20th the market cap of Apple is the largest* public firm ever to be taken private (and after a ton of wrangling from Michael Dell), it's very difficult, costly, risky, and impractical to do at that scale.
* I think. One of the largest at least.
OK, I'm done here. No use arguing back and forth. My prediction is that Apple will continue to buy back significant shares annually for the next 10 years and will eventually go private by 2030. Hopefully you and I will be here at that time so I can tell you I told you so. Or you will tell me that you told me so. I never said they would need a $600 Billion loan. They bring in tens of billions of dollars annually free and clear, and will have a stock buy-back program every year. At some point, if they continue to perform, and bring new products, and the stock remains undervalued, and they make money hand over fist, they will have more money than they need - so, either give back in form of dividend, or continue to reduce outstanding shares. Of course, there is that pesky 'can't bring money back to US without paying taxes' issue that would have to be resolved in some form or another. Apple currently has nearly $70 Billion in Cash/Receivables/ST investments/inventory, and $130 Billion in LT investments. That's $200 Billion right there. If Wall Street continues to undervalue the company, stock buy backs make perfect sense, to the point of eliminating the stock altogether. You can reference Dell all you want, but just realize that Apple is in a very unique position, one that rarely happens to a company that large.
if Apple decides to go private and these companies are forced to when the stock actually gets delisted.
If a company wants to go private and has enough money to pay the investors, it sure as hell can do this. It's a free country!!
Apple nor companies in general make decisions, it's people who work at those companies - the board of directors or the CEO. They don't have the authority to take a company private when it's not their company.
Imagine you founded a company, you have 100% shareholdings. You employ people and eventually make enough money to let someone else do the grunt work. You take your company public and sell say 1/4 of the shares to others to trade. You hire a CEO and you elect board members to ensure the company is run how you see fit. You are then not involved with the running of the company but you retain 75% of the shares.
The CEO and board can't elect to take your company private and buy you out, they don't have the authority to do that. They only would have that authority if their shareholdings outranked yours.
People make decisions about property, property can't make decisions about itself and it's the property owners who make those decisions, which in the case of Apple, the majority owner is neither the CEO nor the board of directors, the ownership is spread very far.
Comments
Ahhh, isn't that nice of Apple.
Instead of the usual announcement around the 20th they decided to postpone the news for one more week so all their competitors have a little breathing room.
Or maybe Apple is having a little fun making them wait an extra week so they can suffer in agony waiting for the inevitable.
Or maybe it takes a wee bit longer to count all of that cash…after that slamdamnfu@kingtastic quarter!
Serious question - does anyone else feel like the inevitable analyst narrative after this blowout quarter will be along the lines of "unsustainablitiy" i.e. yes, biggest quarter ever, but now it's more clear than ever that Apple is an iPhone company and it's flatline from here ..."? It seems almost as if Apple is going to sell off no matter, or especially if, they post record earnings.
is revenue YoY really 42.1B versus 63.5B estimate? that would be 50% increase, it is too much.
P.S. AI internal search should be improved, i was unable to find it here http://appleinsider.com/search/q1+2014+earnings/order/DDESC/limit/25
Edit: i Googled, last year $57.6B Revenue, so Apples estimate is 10% growth, please fix it in the article.
You are, of course, entitled to your opinion. I happen to disagree. We will see how it all plays out over the next few decades.
Has any company ever had record breaking quarter after record breaking quarter, forever? None, so who's not in touch with reality?
Look, whatever. But it is possible to go private even if not in trouble and even with buybacks. Read this article: http://www.valuewalk.com/2013/10/apple-inc-aapl-could-it-go-private/
This decade, next decade, who has the money to buy Apple to take it private unless the stock tanks? Apple is among the most valuable companies on the planet, no entity short of a state, or a coalition of either the other most valuable companies on the planet or the richest hedge funds, could possibly afford to take Apple private.
Really, dude? Um, APPLE has the money to buy Apple to take it private!! And yes, Apple has more cash coming in than a lot of nations' GNP. Again, read this article to see how possible it is. http://www.valuewalk.com/2013/10/apple-inc-aapl-could-it-go-private/
So what's the point of that?
No, because at the end of it, after they've most likely bankrupted themselves, there will be one guy holding the one remaining share, that has the worth of the entirety of Apple plus cash (or more likely, minus debt). Apple has been taken private, at great cost to the corporation, and for the sole benefit of the last shareholder who didn't sell.
So what's the point of that?
Crowley, there are avenues that companies can follow that will not allow this to happen. Here is a webpage that shows this. It would not make sense that single or multiple smaller shareholders can hold a large corporation ransom like that. http://fadi.el-eter.com/what-happens-to-a-stock-when-its-company-goes-private.html
From the link (a very good explanation) - Again, you need to have a basic understanding of the laws governing American publicly-traded companies. Remember who has the power in America - I'll give you a hint... 'Corporate America' means more than just that!! You can't stop a company from going private if they want to and if they can cover their market stock price plus a premium for those holding out. All they need is cash or extremely low financing rates (of which Apple has access to both). Technically, they could take a $600 Billion loan today (if they could find a bank who could and would finance that) and stop publicly trading their stock.
Here’s a step-by-step explanation of what will happen:
- The company decides to go private and decides on the price it will buy back the shares at, usually the company gives a premium of at least 20% over the price of the last trading day.
- Shareholders are given a few days to sell their shares through their broker at the specified price.
- After a few days, the stock will no longer trade on the public market (meaning that the company will delist itself).
- Once the stock is delisted, shareholders are no longer allowed to sell their shares through their broker. The company will then “buy them out” forcefully, which means that the company will contact them and send them a check/cash/wire totaling the price of their shares at the specified price.
- Large investors (those possessing at least 1% of the total shares) may enter into negotiations with the company to own a stake in the company.
Who will make the decision? It would be down to the major shareholders, not the people running the company. When Dell went private, Michael Dell was a large shareholder but still had to get the backing of the other shareholders and only got 70% approval.
Tim Cook has said that he likes that the ownership of Apple is broad. It could be far worse being private and solely owned by profit-driven institutions.
Crowley, there are avenues that companies can follow that will not allow this to happen. Here is a webpage that shows this. It would not make sense that single or multiple smaller shareholders can hold a large corporation ransom like that. http://fadi.el-eter.com/what-happens-to-a-stock-when-its-company-goes-private.html
From the link (a very good explanation) - Again, you need to have a basic understanding of the laws governing American publicly-traded companies. Remember who has the power in America - I'll give you a hint... 'Corporate America' means more than just that!! You can't stop a company from going private if they want to and if they can cover their market stock price plus a premium for those holding out. All they need is cash or extremely low financing rates (of which Apple has access to both). Technically, they could take a $600 Billion loan today (if they could find a bank who could and would finance that) and stop publicly trading their stock.
Here’s a step-by-step explanation of what will happen:
- The company decides to go private and decides on the price it will buy back the shares at, usually the company gives a premium of at least 20% over the price of the last trading day.
- Shareholders are given a few days to sell their shares through their broker at the specified price.
- After a few days, the stock will no longer trade on the public market (meaning that the company will delist itself).
- Once the stock is delisted, shareholders are no longer allowed to sell their shares through their broker. The company will then “buy them out” forcefully, which means that the company will contact them and send them a check/cash/wire totaling the price of their shares at the specified price.
- Large investors (those possessing at least 1% of the total shares) may enter into negotiations with the company to own a stake in the company.
Thanks for the bullet lecture, but while those steps are plausible, you are missing the first one, which is the shareholder coalition with a large enough vested stake that they can push this through. They would be the ones taking Apple private, Apple wouldn't be buying itself to own itself, since such a thing is impossible. Apple would be buying out the other shares to reduce the shareholder pool down to a select few. Even that is stretching credulity because of the amount of money involved (a $600bn loan is not an easy thing to come by), the fact that the shares are so dispersed amongst a large investor base, and because Apple executives have little to gain from such a move; it introduces a needless layer of direct complexity to their governance structure.
There's a reason why Dell, a company valued at 1/20th the market cap of Apple is the largest* public firm ever to be taken private (and after a ton of wrangling from Michael Dell), it's very difficult, costly, risky, and impractical to do at that scale.
* I think. One of the largest at least.
Thanks for the bullet lecture, but while those steps are plausible, you are missing the first one, which is the shareholder coalition with a large enough vested stake that they can push this through. They would be the ones taking Apple private, Apple wouldn't be buying itself to own itself, since such a thing is impossible. Apple would be buying out the other shares to reduce the shareholder pool down to a select few. Even that is stretching credulity because of the amount of money involved (a $600bn loan is not an easy thing to come by), the fact that the shares are so dispersed amongst a large investor base, and because Apple executives have little to gain from such a move; it introduces a needless layer of direct complexity to their governance structure.
There's a reason why Dell, a company valued at 1/20th the market cap of Apple is the largest* public firm ever to be taken private (and after a ton of wrangling from Michael Dell), it's very difficult, costly, risky, and impractical to do at that scale.
* I think. One of the largest at least.
There is no way these companies would be convinced to simply sell their holdings.
There is no way these companies would be convinced to simply sell their holdings.
Wow, um, yes they would, if Apple decides to go private and these companies are forced to when the stock actually gets delisted. Did you not read the bullet points in my post? They would have no choice. If a company wants to go private and has enough money to pay the investors, it sure as hell can do this. It's a free country!!
Thanks for the bullet lecture, but while those steps are plausible, you are missing the first one, which is the shareholder coalition with a large enough vested stake that they can push this through. They would be the ones taking Apple private, Apple wouldn't be buying itself to own itself, since such a thing is impossible. Apple would be buying out the other shares to reduce the shareholder pool down to a select few. Even that is stretching credulity because of the amount of money involved (a $600bn loan is not an easy thing to come by), the fact that the shares are so dispersed amongst a large investor base, and because Apple executives have little to gain from such a move; it introduces a needless layer of direct complexity to their governance structure.
There's a reason why Dell, a company valued at 1/20th the market cap of Apple is the largest* public firm ever to be taken private (and after a ton of wrangling from Michael Dell), it's very difficult, costly, risky, and impractical to do at that scale.
* I think. One of the largest at least.
OK, I'm done here. No use arguing back and forth. My prediction is that Apple will continue to buy back significant shares annually for the next 10 years and will eventually go private by 2030. Hopefully you and I will be here at that time so I can tell you I told you so. Or you will tell me that you told me so. I never said they would need a $600 Billion loan. They bring in tens of billions of dollars annually free and clear, and will have a stock buy-back program every year. At some point, if they continue to perform, and bring new products, and the stock remains undervalued, and they make money hand over fist, they will have more money than they need - so, either give back in form of dividend, or continue to reduce outstanding shares. Of course, there is that pesky 'can't bring money back to US without paying taxes' issue that would have to be resolved in some form or another. Apple currently has nearly $70 Billion in Cash/Receivables/ST investments/inventory, and $130 Billion in LT investments. That's $200 Billion right there. If Wall Street continues to undervalue the company, stock buy backs make perfect sense, to the point of eliminating the stock altogether. You can reference Dell all you want, but just realize that Apple is in a very unique position, one that rarely happens to a company that large.
Apple nor companies in general make decisions, it's people who work at those companies - the board of directors or the CEO. They don't have the authority to take a company private when it's not their company.
Imagine you founded a company, you have 100% shareholdings. You employ people and eventually make enough money to let someone else do the grunt work. You take your company public and sell say 1/4 of the shares to others to trade. You hire a CEO and you elect board members to ensure the company is run how you see fit. You are then not involved with the running of the company but you retain 75% of the shares.
The CEO and board can't elect to take your company private and buy you out, they don't have the authority to do that. They only would have that authority if their shareholdings outranked yours.
People make decisions about property, property can't make decisions about itself and it's the property owners who make those decisions, which in the case of Apple, the majority owner is neither the CEO nor the board of directors, the ownership is spread very far.