First of all, as a long term investor in this company, the premium has to be significant for me to consider the cash out. So let's say that they offer the high premium to take t private and they manage to do that. Now what? Now you are left with a company that has many smart people, but not much money left in the kitty. So, you solved one problem - but in process you created may more. Not only that, you converted one of the very fine institution not only for this country but the world into a crippled company. And all this because of wall street who is driven by money and who never understood a "Goose that lays a Golden eggs".
So, what the article suggest, will never ever happen, not plausible in the current state of the company. A story on today's fight could have brought in more clicks. Even a story about the new Royal Princess could have brought in more clicks.
Air Force One is not actually one plane. It's actually just a callsign that, technically, can be applied to any aircraft used by the President and his staff.
And currently there are two of them, hence the article mentioning the 'twin' aircraft.
The answer - you can't buy yourself. Apple can continue to buy back more of its own shares but each time that happens the remaining ones become more valuable and therefore more expensive.
And I believe that the SEC also has rules about the extent of share buybacks - possibly to thwart exact this type of move.
This is correct. A company buying its own shares does not reduce the outstanding equity, it concentrates that equity on a smaller number of shares. For Apple to go private, someone would have to raise the funds to buy out the existing equity and place it in a private equity holding company, which would be owned by its investors, as with Chrysler or Dell.
I hope this article was intended to be tongue-in-cheek, because the entire concept is silly, as a practical matter. Also as a practical matter, public companies go private when they are in crisis and need to be out of the public eye while they figure out how to survive. Again, as with Chrysler or Dell.
And thanks to the poster who pointed out that publicly traded stock is of real value to the company as a tool for recruiting and retaining employees.
Air Force One is not actually one plane. It's actually just a callsign that, technically, can be applied to any aircraft used by the President and his staff.
And currently there are two of them, hence the article mentioning the 'twin' aircraft.
Here's what I would do if I was Apple. I would say "Screw you shareholders, you've done nothing for us except scrounge off us. Here's what your stocks are worth, that's what you'll be getting, don't let the door hit you on the butt on the way out."
Umm. Shareholders own the company and would have to approve the move. I think starting the proposal with "screw you, shareholders" wouldn't be the best management strategy for going private. Taking a company private, by the way, is done by investors who see significant untapped value in a company. Management teams very often are not the drivers of such a strategy.
@Kenn, what you don't realize is you only invested $13/share in the company and that money only went to Apple if you invested during their IPO. Otherwise, all you're doing is gambling your money in the Wall Street crap shoot. Unless someone can prove me wrong, after the IPO, there has been a fixed number of stocks (adjusted for splits and buy backs) that Wall Street has gambled with. Apple doesn't owe AAPL gablers/investors anything, they only owe people who've bought Apple products.
Wow. So thoroughly wrong. First, Apple - a corporation - has both issued and bought back shares over its course of existence since the IPO. Furthermore, it uses stock grants and options as a talent acquisition and retention tool. Second, it's not a matter of a corporation owing something or not to its shareholders. That's like saying your car - an asset - doesn't owe you anything. Shareholders own the company. There is no "Apple" except the one the shareholders own. The management team are only interested parties from a legal perspective only as far as they also are shareholders.
Before I read any other comments, I just need to let you all know that I thought I had clicked the CNN app when I read this headline. And I realized that if this were actually Fo Reals I would probably not have to work another day in my life. Too bad this isn't a thing ready to happen. Still, of all my investments, AAPL is the one I feel might have a shot at pulling me out of the working class immediately. Go AAPL!
Apple's stock started the week at 132 and ended the week at 128. The low for the week was 124. That was a week in which very good financials were reported. What would the stock do with bad news? What would the stock do if they had a bad quarter. What would happen with the release of a bad product. My guess is they would need far less big dump trucks to for the decreased value of the company. Seems to me that the company holds all the cards and the stockholders are at risk. Are they really in a position to demand a 50% premium?
Besides the option play, the price of AAPL didn't jump because the good quarter news was already factored in the share price. For the past month there has been nothing but news about how Apple is going to report a good quarter, if not a record breaking quarter. So the price of AAPL went up accordingly in the past month. If there were bad news about the quarter, then AAPL might only have been in the low $120's and shot up to $130 after surprising good quarter results. But the good quarter result was no surprise. Therefore AAPL did not move up as expected. In fact many traders (and option players) sold their shares they bought just a month ago, as they were only in it for the short term rise. AAPL investors on the other hand, just held on to their shares, as this is nothing that they haven''t seen dozens of time before, with AAPL. Over the decade, AAPL is one of those stocks that proves that there is some truth to the traders saying ….. "buy on the rumors, sell on the news". But AAPL is still up over 20% for the year, so so far, both the investors and the traders are making money with AAPL.
3% tax advantaged interest would easily be available and Apple would save money over the current buyout plan and employees could still have imputed stock option appreciation.
Why? The stocks are worth that much so why pay them out more? Expecting anything more than market value is greedy.
Buying and selling is a two sided process. I believe the company is worth a lot more than current market value. So do a lot of shareholders. If we didn't, we would have sold already. If you want to buy the company, you have to convince people like us to sell.
I don't know why this is so hard for people to understand. Imagine someone evicting you from your home and forcing you to sell at market value.
Apple reports a phenomenal quarter on Monday and yet the stock is down over 1% on the week. It seems no matter what Apple does it's bad news. If they don't sell enough iPhones that's bad news. If they sell too many iPhones that's also bad news because it means tougher for comps the next year. How many companies beat on the top and bottom line, beat on gross margins, provide better than expected guidance, increase diviidend and share buyback and have their stock drop the next day?
Indeed. Which is why managing for max stockholder value isn't a great idea:
Comments
First of all, as a long term investor in this company, the premium has to be significant for me to consider the cash out. So let's say that they offer the high premium to take t private and they manage to do that. Now what? Now you are left with a company that has many smart people, but not much money left in the kitty. So, you solved one problem - but in process you created may more. Not only that, you converted one of the very fine institution not only for this country but the world into a crippled company. And all this because of wall street who is driven by money and who never understood a "Goose that lays a Golden eggs".
So, what the article suggest, will never ever happen, not plausible in the current state of the company. A story on today's fight could have brought in more clicks. Even a story about the new Royal Princess could have brought in more clicks.
What's a "twin Boeing 747"?
Air Force One is not actually one plane. It's actually just a callsign that, technically, can be applied to any aircraft used by the President and his staff.
And currently there are two of them, hence the article mentioning the 'twin' aircraft.
The answer - you can't buy yourself. Apple can continue to buy back more of its own shares but each time that happens the remaining ones become more valuable and therefore more expensive.
And I believe that the SEC also has rules about the extent of share buybacks - possibly to thwart exact this type of move.
This is correct. A company buying its own shares does not reduce the outstanding equity, it concentrates that equity on a smaller number of shares. For Apple to go private, someone would have to raise the funds to buy out the existing equity and place it in a private equity holding company, which would be owned by its investors, as with Chrysler or Dell.
I hope this article was intended to be tongue-in-cheek, because the entire concept is silly, as a practical matter. Also as a practical matter, public companies go private when they are in crisis and need to be out of the public eye while they figure out how to survive. Again, as with Chrysler or Dell.
And thanks to the poster who pointed out that publicly traded stock is of real value to the company as a tool for recruiting and retaining employees.
What's a "twin Boeing 747"?
Most of them look the same. LOL.
It's the "Raid-1" of Presidential aircraft
Here's what I would do if I was Apple. I would say "Screw you shareholders, you've done nothing for us except scrounge off us. Here's what your stocks are worth, that's what you'll be getting, don't let the door hit you on the butt on the way out."
Umm. Shareholders own the company and would have to approve the move. I think starting the proposal with "screw you, shareholders" wouldn't be the best management strategy for going private. Taking a company private, by the way, is done by investors who see significant untapped value in a company. Management teams very often are not the drivers of such a strategy.
@Kenn, what you don't realize is you only invested $13/share in the company and that money only went to Apple if you invested during their IPO. Otherwise, all you're doing is gambling your money in the Wall Street crap shoot. Unless someone can prove me wrong, after the IPO, there has been a fixed number of stocks (adjusted for splits and buy backs) that Wall Street has gambled with. Apple doesn't owe AAPL gablers/investors anything, they only owe people who've bought Apple products.
Wow. So thoroughly wrong. First, Apple - a corporation - has both issued and bought back shares over its course of existence since the IPO. Furthermore, it uses stock grants and options as a talent acquisition and retention tool. Second, it's not a matter of a corporation owing something or not to its shareholders. That's like saying your car - an asset - doesn't owe you anything. Shareholders own the company. There is no "Apple" except the one the shareholders own. The management team are only interested parties from a legal perspective only as far as they also are shareholders.
Apple's stock started the week at 132 and ended the week at 128. The low for the week was 124. That was a week in which very good financials were reported. What would the stock do with bad news? What would the stock do if they had a bad quarter. What would happen with the release of a bad product. My guess is they would need far less big dump trucks to for the decreased value of the company. Seems to me that the company holds all the cards and the stockholders are at risk. Are they really in a position to demand a 50% premium?
Besides the option play, the price of AAPL didn't jump because the good quarter news was already factored in the share price. For the past month there has been nothing but news about how Apple is going to report a good quarter, if not a record breaking quarter. So the price of AAPL went up accordingly in the past month. If there were bad news about the quarter, then AAPL might only have been in the low $120's and shot up to $130 after surprising good quarter results. But the good quarter result was no surprise. Therefore AAPL did not move up as expected. In fact many traders (and option players) sold their shares they bought just a month ago, as they were only in it for the short term rise. AAPL investors on the other hand, just held on to their shares, as this is nothing that they haven''t seen dozens of time before, with AAPL. Over the decade, AAPL is one of those stocks that proves that there is some truth to the traders saying ….. "buy on the rumors, sell on the news". But AAPL is still up over 20% for the year, so so far, both the investors and the traders are making money with AAPL.
You do realize that your "plan" would be completely illegal, right?
Why? The stocks are worth that much so why pay them out more? Expecting anything more than market value is greedy.
There is also the ESOP option.
3% tax advantaged interest would easily be available and Apple would save money over the current buyout plan and employees could still have imputed stock option appreciation.
With current profit Apple can buy itself back (buy all shares) within 10 years.
A more interesting story would have been what happens, when Apple does that.
It cannot happen. It is impossible.
Buying and selling is a two sided process. I believe the company is worth a lot more than current market value. So do a lot of shareholders. If we didn't, we would have sold already. If you want to buy the company, you have to convince people like us to sell.
I don't know why this is so hard for people to understand. Imagine someone evicting you from your home and forcing you to sell at market value.
"Support Your Local Sheriff"
Apple: too big to fail?
Indeed. Which is why managing for max stockholder value isn't a great idea:
http://www.forbes.com/sites/stevedenning/2011/11/28/maximizing-shareholder-value-the-dumbest-idea-in-the-world/
But not in the stock market.