Isn't the stock Apple "bought back" retired, not available to reissue?
They can issue new shares at anytime. There is an upper limit of shares but last time I check Apple could DOUBLE the shares outstanding without stockholder vote.
But after buying back $120 billion in shares I see no reason why Apple would be hurt reissue those same shares at a 30-40% higher price. In return Apple gets a great media company that makes $4 billion in profit a year and adds $25 billion in revenue.
Sure the stock could go down because the current shareholders will own a smaller percent of Apple. But the stock may not go down because the added value of Time Warner.
This is exactly why many companies like Google buy other companies with a combination of cash and stock.
You would not 'issue' shares to the public to buy a company with full/part stock. You would just do a side 'exchange' deal with the target co's existing shareholders. Any material stock-based acquisition (in whole or part, where materiality is defined by the relative size of the target) requires shareholder approval under Delaware law.
Any material stock-based acquisition (in whole or part, where materiality is defined by the relative size of the target) requires shareholder approval under Delaware law.
What does Delaware have to do with the price of eggs? Apple is a California corporation and Time Warner is a New York corporation?
What does Delaware have to do with the price of eggs? Apple is a California corporation and Time Warner is a New York corporation?
Groan. Please educate yourself. You can start by doing something as simple and obvious as search the Internet for, say, "is Apple/Time Warner a Delaware corporation?" If you actually want to, that is.
(You can even just cut and paste what's within quotes in this post).
Since the new AppleTV launched, after a multi-year delay, without the streaming media service that everyone thought the delay revolved around...I have no choice but to believe Apple failed to negotiate, or lost interest in negotiating, with the TV tyrants.
So, a major move like buying Time Warner, might be the way they are thinking. Obviously, such a move would lead to a streaming video service that works on all iOS devices, Macs, and AppleTV.
Apple is paying close attention to the possibility of Time Warner -- or parts of it -- going up for sale, potentially with the intent of buying assets to help launch a In practice, Apple is unlikely to want to take over TW in whole or in part, since that would require getting involved in businesses Apple has previously expressed no interest in.
Rumors have claimed that Apple might be interested in producing original programming, much like Netflix, but through recruiting and partnerships rather than buyouts. Cue dodged the topic in an October interview.
"We love working with our partners. We're great at technology, and they're great at creating content, and we think that's a great partnership to have," he said.
I don't see this happening unless Google was considering the same move.
Content creation involves risks, and those risks are leveraged by having assets as collateral. This is why you'll see more cable companies divesting themselves of their media holdings, since the broadcast/internet infrastructure is more profitable. Vertical integration has utterly failed because people don't want to move to another city to get a specific cable company or wireless company just to watch TV. The future is streaming, and that vertical integration creates a problem because X broadcaster can't show Y content that Z broadcaster owns the rights to. When people can do pick-and-play, they will opt to pick only the channels they want, and all these "risky" fringe channels will be forced go back to their roots instead of becoming MTV*.
*MTV used to be "Music TV", and hasn't been so since the 90's, and is often derided as being a junk-tier channel along with any other channel that only shows reruns of syndicated content.
regardless. I doubt any investor said to himself, "oh wow. Apple is buying back stock. That makes it a buy."
Regardless, Cook said they were, splitting the share price, doing a buy back and paying a dividend, all to benefit the shareholder. Why would he suddenly reverse course and issue more shares? I think they will stay the course. I could see them structuring some more corporate bonds if they wanted to buy a company. Debt is cheap right now. Better to not mess with the shares. Wall Street is too unpredictable. You should know as I remind you that the share price did not hit $150 in 2015 as you so boldly predicted.
Regardless Tim Cook is pissing away Apple's money Stop pissing it away and invest invest invest. And then grow grow grow. Tim Cook has done neither. Just dumb to piss away money who if you were broke wouldn't give one whole u.s. dollar.
Keep it up Tim Cook Apple just lost 100 billion in valuation in the last most. Congratulations. Has that feel shareholders?
Why is this so hard to understand? Lets go over the 2 scenerio's
Option 1: No buyback
Apple buys Time Warner for $60 billion in cash/stock Cash flow: Negative $60 billion
Option 2: Buyback
Apple buys back shares for $60 per share Apple pays Time Warner $10 billion in cash and $50 billion in stock when the shares are at $100
Cash Flow: Negative $10 billion in cash. Negative $30 billion in stock. Total is $40 billion negative.
By using the buyback Apple saves $20 billion in cash flow.
This is assuming the stock is $100 when they buy Time Warner. This is assuming Apple bought $50 billion of stock at about $60 per share.
Sog, I would ask you the same. Why is it so hard to understand.? Under your scenario you need Apple to have an asset created with the buyback. They don't. The stock was burned so to speak. It was a total loss, no value remaining. Your Scenario 2 does not exist.
I still don't get why you don't understand that:
Lets say you bought a sandwich for $3 Then you sold it for $5. Would that not be a win?
Apple bought shares for $60 Now through acquistion they would be 'selling' shares for $100 Would that not be a win?
i don't get how you don't get that selling something for 40% more than you bought it for is not a win.
Because that's not what is happening.
Apple didn't "buy shares for $60" because they can't be their own shareholders. The shares are retired after the stock repurchase. Those shares can't be used to buy Time Warner. It's incorrect to say "through acquisition they would be 'selling' shares for $100" because there are no shares after the stock repurchase.
From Apple's point of view, the shares aren't an asset they can ever own; instead, it's the cash from the original sale of the equities that are the asset for Apple. Later when they buyback some of those equities, they reduce their cash assets.
While Apple can't "invest in itself" by holding its own stock, Apple can generate net positive cash flow over time by buying low and selling high. For example, if it issued 1 million shares at $100 each, then later repurchased all those shares at $60 each, it will have a net positive cash flow of $40 million. The buyback is the closing transaction, not the opening transaction. The $60 million they spent on the buyback is not held in any asset by Apple, but disbursed as cash to the former shareholders. If Apple later wants to buy Time Warner, they have to use cash or else raise more cash by issuing new securities.
Since the new AppleTV launched, after a multi-year delay, without the streaming media service that everyone thought the delay revolved around...I have no choice but to believe Apple failed to negotiate, or lost interest in negotiating, with the TV tyrants.
So, a major move like buying Time Warner, might be the way they are thinking. Obviously, such a move would lead to a streaming video service that works on all iOS devices, Macs, and AppleTV.
And a streaming service that would have to be on Android, Roku, Fire TV, etc.
If Apple could convince Disney to buy Time Warner...
It wouldn't happen and there'd probably be a lot of anticompetitive laws and such. But if it did, then we'd have the mother of all Superhero movies - The Justice League of America vs. The Avengers!
Time Warner is worth about $55 billion right now. Apple will probably have to pay $70 billion to buy them.
Apple could pay $10 billion in cash and $60 billion in stock.
The $60 billion in stock that will be issued will be taking the place of stock that was bought back in 2013/2014 at ridiculously low levels. I think the average stock price during the backback in 2013 and 2014 was $60. So in other words the $60 billion of new stock issued would have only cost $36 billion (since those shares were bought for $60 but now are worth $100)
So the total cost of Time Warner to Apple would be $10 billion cash + $36 billion in stock (cost basis) for a total of $46 billion.
So Apple is getting a cool $11 billion discount of buying Time Warner by issuing new stock.
Some may say that the stock price will go down because the shareholders are getting diluted by about 10% with the new stock issued. But much if not all of that 'dilution' is made up with the added value of acquiring Time Warner. Time Warner makes about $4 billion in profit and $25 billion in revenue a year. This would also add diversification to Apple's revenue streams, thus a higher PE and less reliance on iPhone.
Do it Tim. If Apple buys Time Warner they could absolutely change TV and the entire face of home entertainment. It would be a massive cog in the Apple ecosystem that would lock in tens of millions of people into the Apple ecosystem.
The thing is, if you think it's a good idea, it probably isn't!
Time Warner is worth about $55 billion right now. Apple will probably have to pay $70 billion to buy them.
Apple could pay $10 billion in cash and $60 billion in stock.
The $60 billion in stock that will be issued will be taking the place of stock that was bought back in 2013/2014 at ridiculously low levels. I think the average stock price during the backback in 2013 and 2014 was $60. So in other words the $60 billion of new stock issued would have only cost $36 billion (since those shares were bought for $60 but now are worth $100)
So the total cost of Time Warner to Apple would be $10 billion cash + $36 billion in stock (cost basis) for a total of $46 billion.
So Apple is getting a cool $11 billion discount of buying Time Warner by issuing new stock.
Some may say that the stock price will go down because the shareholders are getting diluted by about 10% with the new stock issued. But much if not all of that 'dilution' is made up with the added value of acquiring Time Warner. Time Warner makes about $4 billion in profit and $25 billion in revenue a year. This would also add diversification to Apple's revenue streams, thus a higher PE and less reliance on iPhone.
Do it Tim. If Apple buys Time Warner they could absolutely change TV and the entire face of home entertainment. It would be a massive cog in the Apple ecosystem that would lock in tens of millions of people into the Apple ecosystem.
I'm not sure I buy this. Apple doesn't know anything about running cable properties. And it's not like Eddy Cue's org is firing on all cylinders. Heck just this week Apple admitted they didn't know how many people were using their news app and were providing inaccurate data to publishers. iTunes needs a lot of work and Apple Music has plenty of its own issues. My concern is too many "analysts" seem to be in a panic of over Apple and silly season is ensuing. So last week Jim Cramer was screaming that Apple needed to buy Fitbit and Harmon and Verifone. Now this week he says Apple needs to create a $199 fitness band with Nike. I hope to god Tim Cook isn't listening to these clowns that are looking for some quick fix because the stock hasn't been doing well.
The new paradigm in TV seems to spell the end of Cable as we know it IMHO, however, TW has some damn good content. That said it doesn't seem like a company Apple need to me. Plus, if Song35 is thinking it's a good idea it pebbly isn't
Time Warner is worth about $55 billion right now. Apple will probably have to pay $70 billion to buy them.
Apple could pay $10 billion in cash and $60 billion in stock.
The $60 billion in stock that will be issued will be taking the place of stock that was bought back in 2013/2014 at ridiculously low levels. I think the average stock price during the backback in 2013 and 2014 was $60. So in other words the $60 billion of new stock issued would have only cost $36 billion (since those shares were bought for $60 but now are worth $100)
So the total cost of Time Warner to Apple would be $10 billion cash + $36 billion in stock (cost basis) for a total of $46 billion.
So Apple is getting a cool $11 billion discount of buying Time Warner by issuing new stock.
Some may say that the stock price will go down because the shareholders are getting diluted by about 10% with the new stock issued. But much if not all of that 'dilution' is made up with the added value of acquiring Time Warner. Time Warner makes about $4 billion in profit and $25 billion in revenue a year. This would also add diversification to Apple's revenue streams, thus a higher PE and less reliance on iPhone.
Do it Tim. If Apple buys Time Warner they could absolutely change TV and the entire face of home entertainment. It would be a massive cog in the Apple ecosystem that would lock in tens of millions of people into the Apple ecosystem.
" If Apple buys Time Warner they could absolutely change TV and the entire face of home entertainment. It would be a massive cog in the Apple ecosystem that would lock in tens of millions of people into the Apple ecosystem."
That's great for Apple customers based in the USA. What about international? It's no secret that the majority of Apple's revenues are international. How does Apple deal with international TV right issues? Buying up cable companies worldwide becomes pretty damn expensive.
Not if you are buying the content and creators of content then you become the content owner not a licensee. Surely they'd be free to show whatever they own in whatever country they choose. Where it'd differ is in local content such as News, CNN or whatever news channel comes with it isn't much interest to Germans or the Chinese for example but Game of Thrones (albeit translated) is the same program in each country.
They could sog35 said:
Apple can issue new shares without buying a single share back. The buyback isn't saving them anything is it? There's no connection between the two AFAIK, tho you still are trying to attach one. Burning the stock they bought back doesn't make a new stock issue anymore of a positive cash flow.
Why is this so hard to understand? Lets go over the 2 scenerio's
Option 1: No buyback
Apple buys Time Warner for $60 billion in cash/stock Cash flow: Negative $60 billion
Option 2: Buyback
Apple buys back shares for $60 per share Apple pays Time Warner $10 billion in cash and $50 billion in stock when the shares are at $100
Cash Flow: Negative $10 billion in cash. Negative $30 billion in stock. Total is $40 billion negative.
By using the buyback Apple saves $20 billion in cash flow.
This is assuming the stock is $100 when they buy Time Warner. This is assuming Apple bought $50 billion of stock at about $60 per share.
Why is this so hard to understand? Lets go over the 2 scenerio's
Option 1: No buyback
Apple buys Time Warner for $60 billion in cash/stock Cash flow: Negative $60 billion
Option 2: Buyback
Apple buys back shares for $60 per share Apple pays Time Warner $10 billion in cash and $50 billion in stock when the shares are at $100
Cash Flow: Negative $10 billion in cash. Negative $30 billion in stock. Total is $40 billion negative.
By using the buyback Apple saves $20 billion in cash flow.
This is assuming the stock is $100 when they buy Time Warner. This is assuming Apple bought $50 billion of stock at about $60 per share.
Sog, I would ask you the same. Why is it so hard to understand.? Under your scenario you need Apple to have an asset created with the buyback. They don't. The stock was burned so to speak. It was a total loss, no value remaining. Your Scenario 2 does not exist.
I think you're wasting your time. Every time a serious financial topic pops up, people come out of the woodwork with utter nonsense. There should be a law against it, but there isn't. (That's, of course, the reason that media outlets like CNBC exist).
Why is this so hard to understand? Lets go over the 2 scenerio's
Option 1: No buyback
Apple buys Time Warner for $60 billion in cash/stock Cash flow: Negative $60 billion
Option 2: Buyback
Apple buys back shares for $60 per share Apple pays Time Warner $10 billion in cash and $50 billion in stock when the shares are at $100
Cash Flow: Negative $10 billion in cash. Negative $30 billion in stock. Total is $40 billion negative.
By using the buyback Apple saves $20 billion in cash flow.
This is assuming the stock is $100 when they buy Time Warner. This is assuming Apple bought $50 billion of stock at about $60 per share.
Sog, I would ask you the same. Why is it so hard to understand.? Under your scenario you need Apple to have an asset created with the buyback. They don't. The stock was burned so to speak. It was a total loss, no value remaining. Your Scenario 2 does not exist.
I think you're wasting your time. Every time a serious financial topic pops up, people come out of the woodwork with utter nonsense.
Comments
This one will.
(You can even just cut and paste what's within quotes in this post).
So, a major move like buying Time Warner, might be the way they are thinking. Obviously, such a move would lead to a streaming video service that works on all iOS devices, Macs, and AppleTV.
Content creation involves risks, and those risks are leveraged by having assets as collateral. This is why you'll see more cable companies divesting themselves of their media holdings, since the broadcast/internet infrastructure is more profitable. Vertical integration has utterly failed because people don't want to move to another city to get a specific cable company or wireless company just to watch TV. The future is streaming, and that vertical integration creates a problem because X broadcaster can't show Y content that Z broadcaster owns the rights to. When people can do pick-and-play, they will opt to pick only the channels they want, and all these "risky" fringe channels will be forced go back to their roots instead of becoming MTV*.
*MTV used to be "Music TV", and hasn't been so since the 90's, and is often derided as being a junk-tier channel along with any other channel that only shows reruns of syndicated content.
Regardless Tim Cook is pissing away Apple's money Stop pissing it away and invest invest invest. And then grow grow grow. Tim Cook has done neither. Just dumb to piss away money who if you were broke wouldn't give one whole u.s. dollar.
Keep it up Tim Cook Apple just lost 100 billion in valuation in the last most. Congratulations. Has that feel shareholders?
Not good I suppose.
Apple didn't "buy shares for $60" because they can't be their own shareholders. The shares are retired after the stock repurchase. Those shares can't be used to buy Time Warner. It's incorrect to say "through acquisition they would be 'selling' shares for $100" because there are no shares after the stock repurchase.
From Apple's point of view, the shares aren't an asset they can ever own; instead, it's the cash from the original sale of the equities that are the asset for Apple. Later when they buyback some of those equities, they reduce their cash assets.
While Apple can't "invest in itself" by holding its own stock, Apple can generate net positive cash flow over time by buying low and selling high. For example, if it issued 1 million shares at $100 each, then later repurchased all those shares at $60 each, it will have a net positive cash flow of $40 million. The buyback is the closing transaction, not the opening transaction. The $60 million they spent on the buyback is not held in any asset by Apple, but disbursed as cash to the former shareholders. If Apple later wants to buy Time Warner, they have to use cash or else raise more cash by issuing new securities.
It wouldn't happen and there'd probably be a lot of anticompetitive laws and such. But if it did, then we'd have the mother of all Superhero movies - The Justice League of America vs. The Avengers!