IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
Sure they are. Retiring outstanding shares increases the value per share and increases EPS. Although, they never retire all the shares since they use some of these shares to issue to employees.
I think you're incorrect. To the best of my knowledge not a single repurchased share is retained for redistribution. Not one. They no longer exist, so using my "burned" analogy is apt. POOF! If you're going to find fault with my opinion you should first make sure your own understanding is correct.
As far as the repurchase program not having significant value I'm certainly not saying that. At the same time there is no proof that it has, even if "in theory" it should all things being equal, so neither you nor I can be absolutely certain of the dollar value. With a check in hand you would have your proof.
EDIT: Personally I get the impression the stock repurchase deals are intended to benefit the largest investors, increasing their voting power. Small guys are in it at the whim and fancy of the big market investment forces far beyond anything you have any control over. You have no voice in it.
There is often no rational reason for certain stock moves. If/when things crash and burn the largest investors will get along just fine IMO.
Reducing the float benefits even the investor with 1 share , it’s first grade math
Only $6.5 Billion? Heck, another tech announced this week they've authorized $50 Billion in stock repurchases this year. Makes no real sense to me but with SO much cash held by the big tech companies and nothing worth spending it on, or that the regulators would approve anyway, I suppose buying back their own stock is essentially all they have left.
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
I find that terrifying.
These are some of the world's greatest companies in business to build and create products and services -- and they can't find a productive use for capital. Capitalists who can't find a productive use for capital. That does not bode well for the U.S.
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
The theory of capital in a capitalist nation is that capital gets invested in order to create goods and services which produce more capital to produce more and better goods and services.
Stock buybacks produce nothing of value. It is simply giving away money.
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
Sure they are. Retiring outstanding shares increases the value per share and increases EPS. Although, they never retire all the shares since they use some of these shares to issue to employees.
The real question for you and George is: Why do you think that the world's most valuable company and inarguably an incredibly successful, profitable, and savvy company does this if the net effect ranges from having no positive effect to harming the company? Could it be that those many thousands of brilliant people working in finance understand something you don't?
The answer is capitalism: Companies like Apple use capital to produce products and services. That's what capitalism is. Giving away that capital detracts from their purpose as a company -- and the future of that company.
The scary part is that this is a capitalist company who is declaring that they have no productive use for capital. As a capitalist nation we have put our faith and our future in their ability to productively use capital. But, with every dollar of stock buybacks they are saying that they are failing at their job of allocating capital in productive ways.
In the early 1980's the U.S. Steel companies did the similar: They were operating mills using 100 year old technology. Japan stepped in with their modern technology and started selling better steel at lower prices. Did the U.S. Steel companies use their piles of capital to upgrade their mills so they could compete? No, they invested in things like Marathon Oil. My own steel company bought a drug distribution business. The result was the demise of the U.S. Steel industry -- which we, of course, blamed on Japan.
But they at least invested their capital in what they believed was a good investment. Stock buybacks are not investments, they are give-aways. But, like those steel companies are saying: "My business, my corporation, is a bad investment".
I’m not understanding the debt angle. They tend to maintain around 200 million in cash, so why pay interest on debt. Unless it provides tax savings somehow.
Cash is worthless due to the rate the FED is printing currency. Buying back their own shares using debt mitigates that problem along with tax advantages
Bingo, I was wondering why all these people here seems like they have no understanding of the concept using cheap money to create wealth
You think capitalism is simply to "Create Wealth".
Since the demise of our industry 40 years ago we as a nation have been running primarily on financial engineering schemes to, as you say, "create wealth".
We have lost sight of the fact that capitalism depends on allocating capital for productive purposes -- the efficient use of capital. That is, in fact, the claim to fame of capitalism over socialism: That private enterprise can allocate capital better than the government can.
I fail to see how giving away money is allocating capital for productive purposes. It is not as we say "an efficient use of capital". It is squandering the future of that company and the nation that depends on it.
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
And it's totally ignorant to say that buy backs are a total waste of money.
We are both 100% in agreement on that point. It's also something no one in this thread claimed. Market experts do however disagree on the wisdom of buybacks. You mentioned Warren Buffett. Do you also know who Larry Fink is or the company he manages?
"Larry Fink, who runs BlackRock, a huge money-management firm, has argued that buybacks are bad for companies and even bad for democracy. “Society is demanding that companies, both public and private, serve a social purpose,” he wrote. “To prosper over time, every company must not only deliver financial performance but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”
So what to do with these high levels of excessive cash lanquishing? When some of these companies claim they simply cannot afford to pay their employees more and stay profitable is it actually true, or the claim that US companies cannot afford to invest in plant and equipment for producing essential products in the US and thus must search out cheap manufacturing in countries with less respect for personal freedoms? https://www.theatlantic.com/ideas/archive/2018/07/are-stock-buybacks-starving-the-economy/566387/
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
Sure they are. Retiring outstanding shares increases the value per share and increases EPS. Although, they never retire all the shares since they use some of these shares to issue to employees.
The real question for you and George is: Why do you think that the world's most valuable company and inarguably an incredibly successful, profitable, and savvy company does this if the net effect ranges from having no positive effect to harming the company? Could it be that those many thousands of brilliant people working in finance understand something you don't?
The answer is capitalism: Companies like Apple use capital to produce products and services. That's what capitalism is. Giving away that capital detracts from their purpose as a company -- and the future of that company.
The scary part is that this is a capitalist company who is declaring that they have no productive use for capital. As a capitalist nation we have put our faith and our future in their ability to productively use capital. But, with every dollar of stock buybacks they are saying that they are failing at their job of allocating capital in productive ways.
In the early 1980's the U.S. Steel companies did the similar: They were operating mills using 100 year old technology. Japan stepped in with their modern technology and started selling better steel at lower prices. Did the U.S. Steel companies use their piles of capital to upgrade their mills so they could compete? No, they invested in things like Marathon Oil. My own steel company bought a drug distribution business. The result was the demise of the U.S. Steel industry -- which we, of course, blamed on Japan.
But they at least invested their capital in what they believed was a good investment. Stock buybacks are not investments, they are give-aways. But, like those steel companies are saying: "My business, my corporation, is a bad investment".
George, everyone once in awhile you drop jewels in amongst the trash.
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
And it's totally ignorant to say that buy backs are a total waste of money.
We are both 100% in agreement on that point. It's also something no one in this thread claimed. Market experts do however disagree on the wisdom of buybacks. You mentioned Warren Buffett. Do you also know who Larry Fink is or the company he manages?
"Larry Fink, who runs BlackRock, a huge money-management firm, has argued that buybacks are bad for companies and even bad for democracy. “Society is demanding that companies, both public and private, serve a social purpose,” he wrote. “To prosper over time, every company must not only deliver financial performance but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”
So what to do with these high levels of excessive cash lanquishing? When some of these companies claim they simply cannot afford to pay their employees more and stay profitable is it actually true, or the claim that US companies cannot afford to invest in plant and equipment for producing essential products in the US and thus must search out cheap manufacturing in countries with less respect for personal freedoms? https://www.theatlantic.com/ideas/archive/2018/07/are-stock-buybacks-starving-the-economy/566387/
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
Sure they are. Retiring outstanding shares increases the value per share and increases EPS. Although, they never retire all the shares since they use some of these shares to issue to employees.
The real question for you and George is: Why do you think that the world's most valuable company and inarguably an incredibly successful, profitable, and savvy company does this if the net effect ranges from having no positive effect to harming the company? Could it be that those many thousands of brilliant people working in finance understand something you don't?
The answer is capitalism: Companies like Apple use capital to produce products and services. That's what capitalism is. Giving away that capital detracts from their purpose as a company -- and the future of that company.
The scary part is that this is a capitalist company who is declaring that they have no productive use for capital. As a capitalist nation we have put our faith and our future in their ability to productively use capital. But, with every dollar of stock buybacks they are saying that they are failing at their job of allocating capital in productive ways.
In the early 1980's the U.S. Steel companies did the similar: They were operating mills using 100 year old technology. Japan stepped in with their modern technology and started selling better steel at lower prices. Did the U.S. Steel companies use their piles of capital to upgrade their mills so they could compete? No, they invested in things like Marathon Oil. My own steel company bought a drug distribution business. The result was the demise of the U.S. Steel industry -- which we, of course, blamed on Japan.
But they at least invested their capital in what they believed was a good investment. Stock buybacks are not investments, they are give-aways. But, like those steel companies are saying: "My business, my corporation, is a bad investment".
George, everyone once in awhile you drop jewels in amongst the trash.
I would say the same. Occasionally you make sense.
But, while I agree with it, there are questions about what Fink said.
The U.S. didn't gain its industrial might by taking care of all stakeholders. Carnegie's workers worked long hard hours (12 hour days, 6 days a week) for low wages and in uncomfortable and highly dangerous conditions. And, when they objected, he didn't appease them. He shot them. Later, in the 1950's-1970's or 1980's, they adopted Fink's philosophy and we uneducated had fork lift drivers making $100K a year (in 70's money!) with 13 weeks vacation. It's one of the factors that contributed to the demise of the U.S. Steel industry.
As in all things, there is a balance.
The beauty of both capitalism and democracy is that they have self correcting features built in. It doesn't mean that they always do the right thing but that, eventually, mistakes are corrected.
... The U.S. Steel industry made mistakes, so it went through "a correction".
...... You can't work people to death with slave wages. But neither can you pay them so much the business becomes uncompetitive.
I’m not understanding the debt angle. They tend to maintain around 200 million in cash, so why pay interest on debt. Unless it provides tax savings somehow.
I hold plenty of debt that I could pay off with right now without affecting how I live my life, but I don't do that because the interest I pay on that debt is considerably lower than the what I earn per year on my investments.
That nasty sh*t that's going on here is that by doing this, Apple avoids corporate taxes AND manages to concentrate wealth in both the corporation itself and the shareholders. Of course, you have to be well-off enough to be able to put money into stocks in the first place. Those living paycheck to paycheck can neither avoid taxes this way and do not get any benefits to moves like this.
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
And it's totally ignorant to say that buy backs are a total waste of money.
We are both 100% in agreement on that point. It's also something no one in this thread claimed. Market experts do however disagree on the wisdom of buybacks. You mentioned Warren Buffett. Do you also know who Larry Fink is or the company he manages?
"Larry Fink, who runs BlackRock, a huge money-management firm, has argued that buybacks are bad for companies and even bad for democracy. “Society is demanding that companies, both public and private, serve a social purpose,” he wrote. “To prosper over time, every company must not only deliver financial performance but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”
So what to do with these high levels of excessive cash lanquishing? When some of these companies claim they simply cannot afford to pay their employees more and stay profitable is it actually true, or the claim that US companies cannot afford to invest in plant and equipment for producing essential products in the US and thus must search out cheap manufacturing in countries with less respect for personal freedoms? https://www.theatlantic.com/ideas/archive/2018/07/are-stock-buybacks-starving-the-economy/566387/
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
Sure they are. Retiring outstanding shares increases the value per share and increases EPS. Although, they never retire all the shares since they use some of these shares to issue to employees.
The real question for you and George is: Why do you think that the world's most valuable company and inarguably an incredibly successful, profitable, and savvy company does this if the net effect ranges from having no positive effect to harming the company? Could it be that those many thousands of brilliant people working in finance understand something you don't?
The answer is capitalism: Companies like Apple use capital to produce products and services. That's what capitalism is. Giving away that capital detracts from their purpose as a company -- and the future of that company.
The scary part is that this is a capitalist company who is declaring that they have no productive use for capital. As a capitalist nation we have put our faith and our future in their ability to productively use capital. But, with every dollar of stock buybacks they are saying that they are failing at their job of allocating capital in productive ways.
In the early 1980's the U.S. Steel companies did the similar: They were operating mills using 100 year old technology. Japan stepped in with their modern technology and started selling better steel at lower prices. Did the U.S. Steel companies use their piles of capital to upgrade their mills so they could compete? No, they invested in things like Marathon Oil. My own steel company bought a drug distribution business. The result was the demise of the U.S. Steel industry -- which we, of course, blamed on Japan.
But they at least invested their capital in what they believed was a good investment. Stock buybacks are not investments, they are give-aways. But, like those steel companies are saying: "My business, my corporation, is a bad investment".
George, everyone once in awhile you drop jewels in amongst the trash.
I would say the same. Occasionally you make sense..
...... You can't work people to death with slave wages. But neither can you pay them so much the business becomes uncompetitive.
Um, yeah obviously. See your mention of things averaging themselves out in an economy, barring artificially-created constraints perhaps requiring political changes. Keeping a firm thumb on a society won't survive in the long-haul.
But the current social giveaways in the US for example are introducing a level of inflation not seen in a while, and if unchecked will eventually negate many of the benefits of increased average consumer financial resources. Putting more money in your pocket is not the simple endgame answer. IMO we need to seize back some of our own manufacturing prowess, particularly for essential services and products. Don't be dependent on the whims of another. Renew and rebuild our factories left in disrepair or abandonment, install new and more efficient equipment without resorting to near slave-level wages to run it as some Asian countries have decided is most helpful to their society's economics (as tho they asked). Recreating the infrastructure and educational systems to go along with it ensures the wages will continue to outpace the eating away from inflation for a very long time. It's a multi-faceted process that simply moving money from one wealthy overflowing bank account to another hoarding it doesn't assist at all. "Working capital" is more than a phrase, and can take many forms. Investing in your own society is one of them.
IMO no one should be forced to work just to survive, we should be past that. People often don't have the choice of where to live or the circumstances surrounding it. .But there need to be obvious advantages to making the extra effort, pushing when your mind and body are telling you not to, and a few thousand people hoarding the majority of the wealth with sticky grimy hands unless you are serving their selfish purposes ain't it. I've been around a few decades now and see with my own eyes and experience that being a business success today is not as easy as "anyone can put in the hard work and do it" as it used to be.
BTW, your pushing of people's buttons for no reason other than imaginary winning isn't helpful or informative at all. Perhaps consider retiring the frequent and more often than not dishonest "hater/Trumper'' tag you put on people meant to only get a rise out of them. It's just as unseemly as another here who often falls back on "liar!", both of you perhaps not realizing it reflects poorly on the forum and our members in general. You know exactly what I'm referring to, 'nuff said.
If we can't have at least begrudgingly courteous discussions we shouldn't take part in them at all.
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
And it's totally ignorant to say that buy backs are a total waste of money.
We are both 100% in agreement on that point. It's also something no one in this thread claimed. Market experts do however disagree on the wisdom of buybacks. You mentioned Warren Buffett. Do you also know who Larry Fink is or the company he manages?
"Larry Fink, who runs BlackRock, a huge money-management firm, has argued that buybacks are bad for companies and even bad for democracy. “Society is demanding that companies, both public and private, serve a social purpose,” he wrote. “To prosper over time, every company must not only deliver financial performance but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”
So what to do with these high levels of excessive cash lanquishing? When some of these companies claim they simply cannot afford to pay their employees more and stay profitable is it actually true, or the claim that US companies cannot afford to invest in plant and equipment for producing essential products in the US and thus must search out cheap manufacturing in countries with less respect for personal freedoms? https://www.theatlantic.com/ideas/archive/2018/07/are-stock-buybacks-starving-the-economy/566387/
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
Sure they are. Retiring outstanding shares increases the value per share and increases EPS. Although, they never retire all the shares since they use some of these shares to issue to employees.
The real question for you and George is: Why do you think that the world's most valuable company and inarguably an incredibly successful, profitable, and savvy company does this if the net effect ranges from having no positive effect to harming the company? Could it be that those many thousands of brilliant people working in finance understand something you don't?
The answer is capitalism: Companies like Apple use capital to produce products and services. That's what capitalism is. Giving away that capital detracts from their purpose as a company -- and the future of that company.
The scary part is that this is a capitalist company who is declaring that they have no productive use for capital. As a capitalist nation we have put our faith and our future in their ability to productively use capital. But, with every dollar of stock buybacks they are saying that they are failing at their job of allocating capital in productive ways.
In the early 1980's the U.S. Steel companies did the similar: They were operating mills using 100 year old technology. Japan stepped in with their modern technology and started selling better steel at lower prices. Did the U.S. Steel companies use their piles of capital to upgrade their mills so they could compete? No, they invested in things like Marathon Oil. My own steel company bought a drug distribution business. The result was the demise of the U.S. Steel industry -- which we, of course, blamed on Japan.
But they at least invested their capital in what they believed was a good investment. Stock buybacks are not investments, they are give-aways. But, like those steel companies are saying: "My business, my corporation, is a bad investment".
George, everyone once in awhile you drop jewels in amongst the trash.
I would say the same. Occasionally you make sense..
...... You can't work people to death with slave wages. But neither can you pay them so much the business becomes uncompetitive.
Um, yeah obviously. See your mention of things averaging themselves out in an economy, barring artificially-created constraints perhaps requiring political changes. Keeping a firm thumb on a society won't survive in the long-haul.
But the current social giveaways in the US for example are introducing a level of inflation not seen in a while, and if unchecked will eventually negate many of the benefits of increased average consumer financial resources. Putting more money in your pocket is not the simple endgame answer. IMO we need to seize back some of our own manufacturing prowess, particularly for essential services and products. Don't be dependent on the whims of another. Renew and rebuild our factories left in disrepair or abandonment, install new and more efficient equipment without resorting to near slave-level wages to run it as some Asian countries have decided is most helpful to their society's economics (as tho they asked). Recreating the infrastructure and educational systems to go along with it ensures the wages will continue to outpace the eating away from inflation for a very long time. It's a multi-faceted process that simply moving money from one wealthy overflowing bank account to another hoarding it doesn't assist at all. "Working capital" is more than a phrase, and can take many forms. Investing in your own society is one of them.
IMO no one should be forced to work just to survive, we should be past that. People often don't have the choice of where to live or the circumstances surrounding it. .But there need to be obvious advantages to making the extra effort, pushing when your mind and body are telling you not to, and a few thousand people hoarding the majority of the wealth with sticky grimy hands unless you are serving their selfish purposes ain't it. I've been around a few decades now and see with my own eyes and experience that being a business success today is not as easy as "anyone can put in the hard work and do it" as it used to be.
BTW, your pushing of people's buttons for no reason other than imaginary winning isn't helpful or informative at all. Perhaps consider retiring the frequent and more often than not dishonest "hater/Trumper'' tag you put on people meant to only get a rise out of them. It's just as unseemly as another here who often falls back on "liar!", both of you perhaps not realizing it reflects poorly on the forum and our members in general. You know exactly what I'm referring to, 'nuff said.
If we can't have at least begrudgingly courteous discussions we shouldn't take part in them at all.
First, I didn't say "average" I said "balance". They aren't the same. The social inequality where we've been headed averages out to a comfortable middle class income -- even though increasingly there is only rich and poor. Balance is a balance between forces to keep things even -- and is far more difficult and complex.
As for the haters and Trumpers: no, I call them as they are without legitimizing their hate and ideologically driven agendas. The trouble is: they start with the hate or ideology or cult worship and then fill in the blanks to justify and legitimize it. There is no truth or logic in that. Faux News has made it an art form. Start with the agenda and find "facts" that support it. In our current discussion I could just as easily argue that American workers need massive pay cuts as to argue that they need massive pay increases -- and prove either with "facts". But starting from the conclusion and backing into the facts is not the way you get to the right answer.
... There is only only one way to deal with them: call bull to their bull and expose them for what they are.
From my own experience: in one of my first jobs out of college I was working in the budget & analysis area of a major electronic firm. The division typically lost money in July of each year and, one May an executive stopped by and asked my boss if we could be able to hold the loss to under $1m. His response was: "It'll be a $1M -- we already decided". So, in that case, they start with the bottom line and work their way up so it adds to a $1M. I have no tolerance for such stuff. I quit soon after.
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
Sure they are. Retiring outstanding shares increases the value per share and increases EPS. Although, they never retire all the shares since they use some of these shares to issue to employees.
The real question for you and George is: Why do you think that the world's most valuable company and inarguably an incredibly successful, profitable, and savvy company does this if the net effect ranges from having no positive effect to harming the company? Could it be that those many thousands of brilliant people working in finance understand something you don't?
He just doesn’t get it. Most people don’t. I have given up on trying to explain the mechanics of stock buybacks to these kinds of people. I know they have worked tremendously well for my own interests and therefore I will continue to hold my AAPL shares, which each day represent a larger percentage of ownership of the company compared to the last, with the same earnings concentrated amongst a fewer number of outstanding shares, reducing the price-to-earnings multiple of the stock, thus making it even cheaper if the share price stays constant, etc. The share price rise since the buybacks started (when adjusted for splits) has been nothing short of enormous. The buyback is also far superior to a dividend, because I get to decide when I recognize the capital gain and pay the taxes, and such gain compounds pre-tax.
I have friends constantly messaging me to bash Apple every time they announce more buybacks. It’s lunacy, and the amount of rage is likely correlated to the FOMO they are feeling from not having invested. They ask me how I’m going to feel once there are no longer any shares for Apple to buy back. I tell them “if that ever were the case, it would mean I am the last remaining shareholder, and sole owner of the company, the worlds first multi-trillionaire, and I’d find a way to get by! ߤ㦲dquo;
And yes @Xed you are also correct that AAPL does not retire all of the repurchased shares, saving some for issuance to employees. Those that do not believe this can review the quarterly SEC filings and/or listen to the conference calls.
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
Sure they are. Retiring outstanding shares increases the value per share and increases EPS. Although, they never retire all the shares since they use some of these shares to issue to employees.
The real question for you and George is: Why do you think that the world's most valuable company and inarguably an incredibly successful, profitable, and savvy company does this if the net effect ranges from having no positive effect to harming the company? Could it be that those many thousands of brilliant people working in finance understand something you don't?
And yes @Xed you are also correct that AAPL does not retire all of the repurchased shares, saving some for issuance to employees. Those that do not believe this can review the quarterly SEC filings and/or listen to the conference calls.
Here's a better idea. Show us the link and statements that say the shares are not 100% retired after the Apple buyback. Hint: You won't find one. Xed is not correct and neither are you.
My suggestion is the same I gave @Xed : Before chastising someone else claiming they "don't get it" make sure you actually DO get it. In this case I don't think you do, so here's a helpful link to an informative article authored by a very reliable and trusted source explaining why it's NOT meant to increase Apple's stock price despite you being convinced otherwise. To some degree it might... or might not... but that's not the reason for the buybacks anyway if the source is to be believed.
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
Sure they are. Retiring outstanding shares increases the value per share and increases EPS. Although, they never retire all the shares since they use some of these shares to issue to employees.
The real question for you and George is: Why do you think that the world's most valuable company and inarguably an incredibly successful, profitable, and savvy company does this if the net effect ranges from having no positive effect to harming the company? Could it be that those many thousands of brilliant people working in finance understand something you don't?
And yes @Xed you are also correct that AAPL does not retire all of the repurchased shares, saving some for issuance to employees. Those that do not believe this can review the quarterly SEC filings and/or listen to the conference calls.
Here's a better idea. Show us the link and statements that say the shares are not 100% retired after the Apple buyback. Hint: You won't find one. Xed is not correct and neither are you.
My suggestion is the same I gave @Xed : Before chastising someone else claiming they "don't get it" make sure you actually DO get it. In this case I don't think you do, so here's a helpful link to an informative article authored by a very reliable and trusted source explaining why it's NOT meant to increase Apple's stock price despite you being convinced otherwise. To some degree it might... or might not... but that's not the reason for the buybacks anyway if the source is to be believed.
Great article! I’ve always loved Neil’s work. I don’t think you read it, because it proves my point. “In the process, a wealth transfer event is possible as ownership is shifted from shareholders willing to sell shares back to the company to those shareholders not selling shares.”
Like I said in my last post, I am done having lengthy educational sessions with people who either just want to bash my wildly successful investment in AAPL or who don’t understand terms like EPS, outstanding share count, RSUs, etc.
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
Sure they are. Retiring outstanding shares increases the value per share and increases EPS. Although, they never retire all the shares since they use some of these shares to issue to employees.
The real question for you and George is: Why do you think that the world's most valuable company and inarguably an incredibly successful, profitable, and savvy company does this if the net effect ranges from having no positive effect to harming the company? Could it be that those many thousands of brilliant people working in finance understand something you don't?
And yes @Xed you are also correct that AAPL does not retire all of the repurchased shares, saving some for issuance to employees. Those that do not believe this can review the quarterly SEC filings and/or listen to the conference calls.
Here's a better idea. Show us the link and statements that say the shares are not 100% retired after the Apple buyback. Hint: You won't find one. Xed is not correct and neither are you.
My suggestion is the same I gave @Xed : Before chastising someone else claiming they "don't get it" make sure you actually DO get it. In this case I don't think you do, so here's a helpful link to an informative article authored by a very reliable and trusted source explaining why it's NOT meant to increase Apple's stock price despite you being convinced otherwise. To some degree it might... or might not... but that's not the reason for the buybacks anyway if the source is to be believed.
Great article! I’ve always loved Neil’s work. I don’t think you read it, because it proves my point. “In the process, a wealth transfer event is possible as ownership is shifted from shareholders willing to sell shares back to the company to those shareholders not selling shares.”
Like I said in my last post, I am done having lengthy educational sessions with people who either just want to bash my wildly successful investment in AAPL or who don’t understand terms like EPS, outstanding share count, RSUs, etc.
Have a wonderful week!
You should read it twice since you may have missed a couple points that would have cleared up some misunderstandings of yours. But if you want to go away making believe you were right all along, Apple keeps buyback shares to give to the execs, and the program is intended to increase future stock prices then feel to do so. Life's too short not to live happy and content.
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
Sure they are. Retiring outstanding shares increases the value per share and increases EPS. Although, they never retire all the shares since they use some of these shares to issue to employees.
The real question for you and George is: Why do you think that the world's most valuable company and inarguably an incredibly successful, profitable, and savvy company does this if the net effect ranges from having no positive effect to harming the company? Could it be that those many thousands of brilliant people working in finance understand something you don't?
And yes @Xed you are also correct that AAPL does not retire all of the repurchased shares, saving some for issuance to employees. Those that do not believe this can review the quarterly SEC filings and/or listen to the conference calls.
Here's a better idea. Show us the link and statements that say the shares are not 100% retired after the Apple buyback. Hint: You won't find one. Xed is not correct and neither are you.
My suggestion is the same I gave @Xed : Before chastising someone else claiming they "don't get it" make sure you actually DO get it. In this case I don't think you do, so here's a helpful link to an informative article authored by a very reliable and trusted source explaining why it's NOT meant to increase Apple's stock price despite you being convinced otherwise. To some degree it might... or might not... but that's not the reason for the buybacks anyway if the source is to be believed.
Great article! I’ve always loved Neil’s work. I don’t think you read it, because it proves my point. “In the process, a wealth transfer event is possible as ownership is shifted from shareholders willing to sell shares back to the company to those shareholders not selling shares.”
Like I said in my last post, I am done having lengthy educational sessions with people who either just want to bash my wildly successful investment in AAPL or who don’t understand terms like EPS, outstanding share count, RSUs, etc.
Have a wonderful week!
You should read it twice since you may have missed a couple points that would have cleared up some misunderstandings of yours. But if you want to go away making believe you were right all along, Apple keeps buyback shares to give to the execs, and the program is intended to increase future stock prices then feel to do so. Life's too short not to live happy and content.
You too have a great week, sincerely.
Here's a thought experiment.
So far Apple has repurchased over 5B shares of AAPL (split adjusted) with their buy back program, over the last 8 years. Apple now has about 16.5B shares outstanding.
If Apple had not repurchased those over 5B shares, there would be 22B shares of AAPL outstanding today.
Following me so far?
So if you want to think that Apple buy backs program had not help increase the share price of AAPL, then AAPL would still be at $145 a share today.
Would that be your thinking?
If so, then Apple would have a market cap of over $3T today. And actually hit that mark back in in Jan 2021, when AAPL hit $140 a share.
And instead of EPS of $1.30, EPS would had came in at $.99. ($21.7B net income / 16.5B shares vs $21.7B / 22B shares) Apple buy backs has increased EPS by 30%.
Now if one want to argue that Apple would still have a market cap of $2.5T, even without the buy backs, then AAPL share price should be at about $1.15. ($1.15 x 22B shares)
One could reasonability argue that buying back shares every once in awhile, might not benefit future share price, even over the long term. But when a company buy back as much as Apple has bought back, over the last 8 years (and will continue to do so at the same or greater pace), no reasonable argument can be made that AAPL future share price did not and will not, benefit from buy backs.
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
Sure they are. Retiring outstanding shares increases the value per share and increases EPS. Although, they never retire all the shares since they use some of these shares to issue to employees.
The real question for you and George is: Why do you think that the world's most valuable company and inarguably an incredibly successful, profitable, and savvy company does this if the net effect ranges from having no positive effect to harming the company? Could it be that those many thousands of brilliant people working in finance understand something you don't?
And yes @Xed you are also correct that AAPL does not retire all of the repurchased shares, saving some for issuance to employees. Those that do not believe this can review the quarterly SEC filings and/or listen to the conference calls.
Here's a better idea. Show us the link and statements that say the shares are not 100% retired after the Apple buyback. Hint: You won't find one. Xed is not correct and neither are you.
My suggestion is the same I gave @Xed : Before chastising someone else claiming they "don't get it" make sure you actually DO get it. In this case I don't think you do, so here's a helpful link to an informative article authored by a very reliable and trusted source explaining why it's NOT meant to increase Apple's stock price despite you being convinced otherwise. To some degree it might... or might not... but that's not the reason for the buybacks anyway if the source is to be believed.
Great article! I’ve always loved Neil’s work. I don’t think you read it, because it proves my point. “In the process, a wealth transfer event is possible as ownership is shifted from shareholders willing to sell shares back to the company to those shareholders not selling shares.”
Like I said in my last post, I am done having lengthy educational sessions with people who either just want to bash my wildly successful investment in AAPL or who don’t understand terms like EPS, outstanding share count, RSUs, etc.
Have a wonderful week!
You should read it twice since you may have missed a couple points that would have cleared up some misunderstandings of yours. But if you want to go away making believe you were right all along, Apple keeps buyback shares to give to the execs, and the program is intended to increase future stock prices then feel to do so. Life's too short not to live happy and content.
You too have a great week, sincerely.
Here's a thought experiment.
So far Apple has repurchased over 5B shares of AAPL (split adjusted) with their buy back program, over the last 8 years. Apple now has about 16.5B shares outstanding.
If Apple had not repurchased those over 5B shares, there would be 22B shares of AAPL outstanding today.
Following me so far?
So if you want to think that Apple buy backs program had not help increase the share price of AAPL, then AAPL would still be at $145 a share today.
Would that be your thinking?
One could reasonability argue that buying back shares every once in awhile, might not benefit future share price, even over the long term. But when a company buy back as much as Apple has bought back, over the last 8 years (and will continue to do so at the same or greater pace), no reasonable argument can be made that AAPL future share price did not and will not, benefit from buy backs.
I've never believed, much less opined, that the buybacks had no positive effect at all. That final paragraph is more my thinking. That indicates we're more in agreement than you might have thought.
I believe there has been some undefinable effect on the stock price, but not a single person here can put a dollar number to it. It could be $100, $25, $5 even possible if unlikely it could be none at all and the price today would be just as high without them. That's also more along the lines of Neil Cybart's thinking as far as I can tell. Raising the future stock price is not the goal, tho I would agree with anyone claiming it is a likely side-effect in the case of Apple. I might also agree there may be an identifiable cause and effect immediately surrounding each Apple buyback event, so temporarily bumping the price for those selling today is more likely, and I think you'll see Neil saying pretty much the same thing.
So here's a thought for you. An investor or manager controlling a huge number of Apple shares might benefit from selling when Apple is buying, then repurchasing at the price drop which inevitably happens. Maybe that's why the big guys like the buybacks. Truly I have no idea. I personally invest in tangible equipment, plant, and people rather than stocks. When those things go south I can usually understand why and if there was anything I could have done to prevent it. When they work it becomes a repeatable and dependable business plan within my control (for the most part) rather than at the whim of "the market" who may not have the same interests as me.
What I do not agree with is anyone claiming they know for a fact what the buyback effect on current and future stock price has been and will be and would challenge them to specifically define it if they find fault in that statement. It is entirely within the realm of possibility that you may get no more for your stock when you decide to sell than you would have had the buybacks never happened. Your faith that it will is what you have, and having faith is a wonderful and positive human trait, but that is not tangible proof you got your cut of the Apple cash.
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
Sure they are. Retiring outstanding shares increases the value per share and increases EPS. Although, they never retire all the shares since they use some of these shares to issue to employees.
The real question for you and George is: Why do you think that the world's most valuable company and inarguably an incredibly successful, profitable, and savvy company does this if the net effect ranges from having no positive effect to harming the company? Could it be that those many thousands of brilliant people working in finance understand something you don't?
And yes @Xed you are also correct that AAPL does not retire all of the repurchased shares, saving some for issuance to employees. Those that do not believe this can review the quarterly SEC filings and/or listen to the conference calls.
Here's a better idea. Show us the link and statements that say the shares are not 100% retired after the Apple buyback. Hint: You won't find one. Xed is not correct and neither are you.
My suggestion is the same I gave @Xed : Before chastising someone else claiming they "don't get it" make sure you actually DO get it. In this case I don't think you do, so here's a helpful link to an informative article authored by a very reliable and trusted source explaining why it's NOT meant to increase Apple's stock price despite you being convinced otherwise. To some degree it might... or might not... but that's not the reason for the buybacks anyway if the source is to be believed.
Great article! I’ve always loved Neil’s work. I don’t think you read it, because it proves my point. “In the process, a wealth transfer event is possible as ownership is shifted from shareholders willing to sell shares back to the company to those shareholders not selling shares.”
Like I said in my last post, I am done having lengthy educational sessions with people who either just want to bash my wildly successful investment in AAPL or who don’t understand terms like EPS, outstanding share count, RSUs, etc.
Have a wonderful week!
You should read it twice since you may have missed a couple points that would have cleared up some misunderstandings of yours. But if you want to go away making believe you were right all along, Apple keeps buyback shares to give to the execs, and the program is intended to increase future stock prices then feel to do so. Life's too short not to live happy and content.
You too have a great week, sincerely.
Here's a thought experiment.
So far Apple has repurchased over 5B shares of AAPL (split adjusted) with their buy back program, over the last 8 years. Apple now has about 16.5B shares outstanding.
If Apple had not repurchased those over 5B shares, there would be 22B shares of AAPL outstanding today.
Following me so far?
So if you want to think that Apple buy backs program had not help increase the share price of AAPL, then AAPL would still be at $145 a share today.
Would that be your thinking?
One could reasonability argue that buying back shares every once in awhile, might not benefit future share price, even over the long term. But when a company buy back as much as Apple has bought back, over the last 8 years (and will continue to do so at the same or greater pace), no reasonable argument can be made that AAPL future share price did not and will not, benefit from buy backs.
I've never believed, much less opined, that the buybacks had no positive effect at all. That final paragraph is more my thinking. That indicates we're more in agreement than you might have thought.
I believe there has been some undefinable effect on the stock price, but not a single person here can put a dollar number to it. It could be $100, $25, $5 even possible if unlikely it could be none at all and the price today would be just as high without them. That's also more along the lines of Neil Cybart's thinking as far as I can tell. Raising the future stock price is not the goal, tho I would agree with anyone claiming it is a likely side-effect in the case of Apple. I might also agree there may be an identifiable cause and effect immediately surrounding each Apple buyback event, so temporarily bumping the price for those selling today is more likely, and I think you'll see Neil saying pretty much the same thing.
So here's a thought for you. An investor or manager controlling a huge number of Apple shares might benefit from selling when Apple is buying, then repurchasing at the price drop which inevitably happens. Maybe that's why the big guys like the buybacks. Truly I have no idea. I personally invest in tangible equipment, plant, and people rather than stocks. When those things go south I can usually understand why and if there was anything I could have done to prevent it. When they work it becomes a repeatable and dependable business plan within my control (for the most part) rather than at the whim of "the market" who may not have the same interests as me.
What I do not agree with is anyone claiming they know for a fact what the buyback effect on current and future stock price has been and will be and would challenge them to specifically define it if they find fault in that statement. It is entirely within the realm of possibility that you may get no more for your stock when you decide to sell than you would have had the buybacks never happened. Your faith that it will is what you have, and having faith is a wonderful and positive human trait, but that is not tangible proof you got your cut of the Apple cash.
I have heard analysts claim that the increases in the stock market (of which Apple is just one) over the past dozen years are almost entirely due to:
1) Low interest rates combined with a flood of liquidity from QE -- all courtesy of the Fed
2) Stock buybacks.
But all of that has become normalized and investors simply assume that stock values are based on fundamentals rather than artificial stimuli.
But, what happens when those stimuli are withdrawn? Can they be?
-- In 2013 Bernanke used the "T word" and we found out. In 2016-18 Yellen tried the same and Trump's hair turned grey before he replaced her.
-- In 2017 Trump transferred $1T+ from government coffers to corporate -- which mostly got passed to the rich through stock buybacks in a very slick (but legal) money laundering scheme. But, as a result some are proposing rules to limit stock buybacks.
In any event: stock prices and PE ratios are 50-100% higher than they would otherwise be.
As to your question whether buybacks increase stock prices, they do so in two ways: 1) If a corporation is worth $100 and has 10 shares issued each share is worth $10. If they retire 1 share the corporation is still worth #100 but each share is then worth $11.11. It's just math (assuming that the stock market passed grade school arithmetic)
2) Buying shares increases demand which increases prices.
So, there is increased pressure to drive up stock prices. But, as you point out, it's anybody's guess as to precisely how much -- if, for no other reason, than the stock market has multiple factors going into prices -- investor emotion, optimism/pessimism among others.
But I think it's reasonable to say that buybacks increase stock prices.
It's also reasonable to say they make stock holders richer at the expense of the company that has fewer assets to invest in productive ways.
1) If a corporation is worth $100 and has 10 shares issued each share is worth $10. If they retire 1 share the corporation is still worth #100 but each share is then worth $11.11. It's just math (assuming that the stock market passed grade school arithmetic)
No.
If a $100 corporation uses $10 of its equity to retire a share then it is now worth $90. You can't spend money and still be worth the same amount, that is literally having your cake and eating it. The remaining shares are still worth $10; they have a greater share of a smaller pie, with the same worth per share as it did the day before the buy back. You can't just create wealth for shareholders the way you describe.
A corporation can realise greater value in the form of future profits that exceed expectations, and therefore cause the values of the remaining 9 shares to increase at a higher rate than 10 shares would have. That's the way that buybacks theoretically make money for shareholders, by concentrating earnings per share in a smaller pool.
Of course, in practice, share trading is all about expectations, and every action has a reaction, so it gets more complicated.
IMO actually distributing it to the stockholders in a special dividend would be more direct, assurance of truly getting something tangible instead of simply having faith it made your investment more valuable, but I guess they don't want to get hopes up of an ongoing thing.
Buying back the stock is a clear indicator that Apple thinks the stock price is low and/or that they expect something to move the stock higher in the future to make the buyback a lucrative endeavor.
How would it be a "lucrative endeavor"? That would imply Apple could profit from a higher price later, which they won't.
No one understands the health of the company better than its senior managers. No one is in a better position to judge what will happen to the future performance of the company. So if a company decides to buy back stock (i.e., decides to invest in its own stock), these managers must believe that the stock price is undervalued and will rise (or so most observers would believe).
Apple is not investing in its own stock tho. There is no retained value, the stock gets burned in effect.
As far as these repurchases driving up the value of the remaining stock I perfectly understand the theory. The proof is lacking, therefore it's somewhat a leap of faith that you will benefit more from an increased share price later on directly due to a buyback this quarter compared to an identifiable and tangible check distributing those funds directly to you.
Sure they are. Retiring outstanding shares increases the value per share and increases EPS. Although, they never retire all the shares since they use some of these shares to issue to employees.
The real question for you and George is: Why do you think that the world's most valuable company and inarguably an incredibly successful, profitable, and savvy company does this if the net effect ranges from having no positive effect to harming the company? Could it be that those many thousands of brilliant people working in finance understand something you don't?
And yes @Xed you are also correct that AAPL does not retire all of the repurchased shares, saving some for issuance to employees. Those that do not believe this can review the quarterly SEC filings and/or listen to the conference calls.
Here's a better idea. Show us the link and statements that say the shares are not 100% retired after the Apple buyback. Hint: You won't find one. Xed is not correct and neither are you.
My suggestion is the same I gave @Xed : Before chastising someone else claiming they "don't get it" make sure you actually DO get it. In this case I don't think you do, so here's a helpful link to an informative article authored by a very reliable and trusted source explaining why it's NOT meant to increase Apple's stock price despite you being convinced otherwise. To some degree it might... or might not... but that's not the reason for the buybacks anyway if the source is to be believed.
Great article! I’ve always loved Neil’s work. I don’t think you read it, because it proves my point. “In the process, a wealth transfer event is possible as ownership is shifted from shareholders willing to sell shares back to the company to those shareholders not selling shares.”
Like I said in my last post, I am done having lengthy educational sessions with people who either just want to bash my wildly successful investment in AAPL or who don’t understand terms like EPS, outstanding share count, RSUs, etc.
Have a wonderful week!
You should read it twice since you may have missed a couple points that would have cleared up some misunderstandings of yours. But if you want to go away making believe you were right all along, Apple keeps buyback shares to give to the execs, and the program is intended to increase future stock prices then feel to do so. Life's too short not to live happy and content.
You too have a great week, sincerely.
Here's a thought experiment.
So far Apple has repurchased over 5B shares of AAPL (split adjusted) with their buy back program, over the last 8 years. Apple now has about 16.5B shares outstanding.
If Apple had not repurchased those over 5B shares, there would be 22B shares of AAPL outstanding today.
Following me so far?
So if you want to think that Apple buy backs program had not help increase the share price of AAPL, then AAPL would still be at $145 a share today.
Would that be your thinking?
One could reasonability argue that buying back shares every once in awhile, might not benefit future share price, even over the long term. But when a company buy back as much as Apple has bought back, over the last 8 years (and will continue to do so at the same or greater pace), no reasonable argument can be made that AAPL future share price did not and will not, benefit from buy backs.
I've never believed, much less opined, that the buybacks had no positive effect at all. That final paragraph is more my thinking. That indicates we're more in agreement than you might have thought.
I believe there has been some undefinable effect on the stock price, but not a single person here can put a dollar number to it. It could be $100, $25, $5 even possible if unlikely it could be none at all and the price today would be just as high without them. That's also more along the lines of Neil Cybart's thinking as far as I can tell. Raising the future stock price is not the goal, tho I would agree with anyone claiming it is a likely side-effect in the case of Apple. I might also agree there may be an identifiable cause and effect immediately surrounding each Apple buyback event, so temporarily bumping the price for those selling today is more likely, and I think you'll see Neil saying pretty much the same thing.
So here's a thought for you. An investor or manager controlling a huge number of Apple shares might benefit from selling when Apple is buying, then repurchasing at the price drop which inevitably happens. Maybe that's why the big guys like the buybacks. Truly I have no idea. I personally invest in tangible equipment, plant, and people rather than stocks. When those things go south I can usually understand why and if there was anything I could have done to prevent it. When they work it becomes a repeatable and dependable business plan within my control (for the most part) rather than at the whim of "the market" who may not have the same interests as me.
What I do not agree with is anyone claiming they know for a fact what the buyback effect on current and future stock price has been and will be and would challenge them to specifically define it if they find fault in that statement. It is entirely within the realm of possibility that you may get no more for your stock when you decide to sell than you would have had the buybacks never happened. Your faith that it will is what you have, and having faith is a wonderful and positive human trait, but that is not tangible proof you got your cut of the Apple cash.
I have heard analysts claim that the increases in the stock market (of which Apple is just one) over the past dozen years are almost entirely due to:
1) Low interest rates combined with a flood of liquidity from QE -- all courtesy of the Fed
2) Stock buybacks.
But all of that has become normalized and investors simply assume that stock values are based on fundamentals rather than artificial stimuli.
But, what happens when those stimuli are withdrawn? Can they be?
-- In 2013 Bernanke used the "T word" and we found out. In 2016-18 Yellen tried the same and Trump's hair turned grey before he replaced her.
-- In 2017 Trump transferred $1T+ from government coffers to corporate -- which mostly got passed to the rich through stock buybacks in a very slick (but legal) money laundering scheme. But, as a result some are proposing rules to limit stock buybacks.
In any event: stock prices and PE ratios are 50-100% higher than they would otherwise be.
As to your question whether buybacks increase stock prices, they do so in two ways: 1) If a corporation is worth $100 and has 10 shares issued each share is worth $10. If they retire 1 share the corporation is still worth #100 but each share is then worth $11.11. It's just math (assuming that the stock market passed grade school arithmetic)
2) Buying shares increases demand which increases prices.
So, there is increased pressure to drive up stock prices. But, as you point out, it's anybody's guess as to precisely how much -- if, for no other reason, than the stock market has multiple factors going into prices -- investor emotion, optimism/pessimism among others.
But I think it's reasonable to say that buybacks increase stock prices.
It's also reasonable to say they make stock holders richer at the expense of the company that has fewer assets to invest in productive ways.
Crowley, that would be fine if the stock price were directly tied to the company's equity. It is not. The stock price is more of an imagined number without any direct collelation to Apple's cash or property or product inventory. That's why people are so confused when a stock price goes down when they thing it should be going up and vice-versa., or a company that has never made a profit and owns few resources can be worth $Billions. When you sell your stock you won't be getting a piece of Apple's actual equity if everything were to be liquidated which is a somewhat clear number, but rather what some other investor is willing to sell their share for which may having nothing to do with anything going on at Apple. Hopefully that won't become eminently clear later this year as many of the investment hourse are now warning. It may just be another game they're playing and only the very largest biggest investors and management companies might know.
TBH, there's nothing that says Apple current stock price would not be the same today, maybe even higher, if the buybacks never occured as far as I can tell. There is no definable measuring stick as there's no direct correlation between the two. According to Neil Cybart there have been times a stock's price has dropped following a buyback, which based on your admittedly over-simpllified example would not make mathematic sense.
Crowley, that would be fine if the stock price were directly tied to the company's equity. It is not. The stock price is more of an imagined number without any direct collelation to Apple's cash or property or product inventory.
As I said, the stock market is about expectation and judgement, but it is at least theoretically supposed to be a representation of a company's potential to return value, which equates to companies current equity plus its expected lifetime profit. The expectation and judgement is the human interpretation of the current and future situation. As is the flaw with most all economics, information is imperfect and subject to human bias and the corrosive element of speculation and second guessing about confidence in a stock.
But the point remains, a company cannot just create shareholder value by buying stock. That should stand to reason, any way that value could be created from nothing would be a surefire hit. Let's take GeorgeBMac's idea to its extreme. A $100 company buys back 9 of its 10 shares. It's still worth $100 according to George, and the 1 remaining share is worth $100, but $90, 9 tenths of the value of the company has been spent, with no accountability or repercussion. It literally would not make sense for the world to work that way. Everyone and his mother would be taking out loans to buy back shares, because the market value would stay the same. No, it doesn't work that way.
TBH, there's nothing that says Apple current stock price would not be the same today, maybe even higher, if the buybacks never occured as far as I can tell. There is no definable measuring stick as there's no direct correlation between the two. According to Neil Cybart there have been times a stock's price has droppedfollowing a buyback, which based on your admittedly over-simpllified example would not make mathematic sense.
Maybe I didn't explain well enough, but it makes perfect sense. Buying back shares does not create value for shareholders. Not at all. What it does it concentrate future earnings in a smaller shareholder pool. If future earnings are more than the stock price has previously valued them at, then the market value goes up and the remaining shareholders benefit even more than they would have before the buy out. If it is less, then the loss is also concentrated and the stock price goes down by even more than it would have before the buyout. Stock buyouts do not deliver value, then just concentrate increases or decreases in value amongst a smaller pool.
And of course, all this is compounded by speculation. The stock price may dip after a buy back because some people believe it's time to jump ship because they're expecting bad results. Buy backs are generally thought to be a company expressing confidence in the value of its stock, but that belief can be used cynically to attempt an artificial bump. If investors see through it that can backfire. That part is all about confidence, or lack of it in the market's judgement of the company and the actions of the company.
It’s all a casino, or more aptly, it's like a global game of poker. Some players are great at the maths, working out the probabilities, and can make money that way, some others just go on instinct and may or may do well, but generally the best players are those that are good at reading the whole game, understanding the maths and the other players. And the dealer too, you've got to understand the dealer, and if they're dealing a loaded hand.
Buy backs are like the house placing a big bet on their own hand. They might be bluffing.
(and after that the analogy falls over, because it's not really like poker)
Comments
"Larry Fink, who runs BlackRock, a huge money-management firm, has argued that buybacks are bad for companies and even bad for democracy. “Society is demanding that companies, both public and private, serve a social purpose,” he wrote. “To prosper over time, every company must not only deliver financial performance but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.”
Harvard Business Review argues that open-market stock repurchases should be banned altogether:
https://hbr.org/2020/01/why-stock-buybacks-are-dangerous-for-the-economy
So what to do with these high levels of excessive cash lanquishing? When some of these companies claim they simply cannot afford to pay their employees more and stay profitable is it actually true, or the claim that US companies cannot afford to invest in plant and equipment for producing essential products in the US and thus must search out cheap manufacturing in countries with less respect for personal freedoms?
https://www.theatlantic.com/ideas/archive/2018/07/are-stock-buybacks-starving-the-economy/566387/
GeorgeBMac said: George, everyone once in awhile you drop jewels in amongst the trash.
That nasty sh*t that's going on here is that by doing this, Apple avoids corporate taxes AND manages to concentrate wealth in both the corporation itself and the shareholders. Of course, you have to be well-off enough to be able to put money into stocks in the first place. Those living paycheck to paycheck can neither avoid taxes this way and do not get any benefits to moves like this.
Nice job, corporate tax system!
But the current social giveaways in the US for example are introducing a level of inflation not seen in a while, and if unchecked will eventually negate many of the benefits of increased average consumer financial resources. Putting more money in your pocket is not the simple endgame answer. IMO we need to seize back some of our own manufacturing prowess, particularly for essential services and products. Don't be dependent on the whims of another. Renew and rebuild our factories left in disrepair or abandonment, install new and more efficient equipment without resorting to near slave-level wages to run it as some Asian countries have decided is most helpful to their society's economics (as tho they asked). Recreating the infrastructure and educational systems to go along with it ensures the wages will continue to outpace the eating away from inflation for a very long time. It's a multi-faceted process that simply moving money from one wealthy overflowing bank account to another hoarding it doesn't assist at all. "Working capital" is more than a phrase, and can take many forms. Investing in your own society is one of them.
IMO no one should be forced to work just to survive, we should be past that. People often don't have the choice of where to live or the circumstances surrounding it. .But there need to be obvious advantages to making the extra effort, pushing when your mind and body are telling you not to, and a few thousand people hoarding the majority of the wealth with sticky grimy hands unless you are serving their selfish purposes ain't it. I've been around a few decades now and see with my own eyes and experience that being a business success today is not as easy as "anyone can put in the hard work and do it" as it used to be.
BTW, your pushing of people's buttons for no reason other than imaginary winning isn't helpful or informative at all. Perhaps consider retiring the frequent and more often than not dishonest "hater/Trumper'' tag you put on people meant to only get a rise out of them. It's just as unseemly as another here who often falls back on "liar!", both of you perhaps not realizing it reflects poorly on the forum and our members in general. You know exactly what I'm referring to, 'nuff said.
If we can't have at least begrudgingly courteous discussions we shouldn't take part in them at all.
I have friends constantly messaging me to bash Apple every time they announce more buybacks. It’s lunacy, and the amount of rage is likely correlated to the FOMO they are feeling from not having invested. They ask me how I’m going to feel once there are no longer any shares for Apple to buy back. I tell them “if that ever were the case, it would mean I am the last remaining shareholder, and sole owner of the company, the worlds first multi-trillionaire, and I’d find a way to get by! ߤ㦲dquo;
And yes @Xed you are also correct that AAPL does not retire all of the repurchased shares, saving some for issuance to employees. Those that do not believe this can review the quarterly SEC filings and/or listen to the conference calls.
My suggestion is the same I gave @Xed : Before chastising someone else claiming they "don't get it" make sure you actually DO get it. In this case I don't think you do, so here's a helpful link to an informative article authored by a very reliable and trusted source explaining why it's NOT meant to increase Apple's stock price despite you being convinced otherwise. To some degree it might... or might not... but that's not the reason for the buybacks anyway if the source is to be believed.
Oh and by the way, Neil Cybart confirms my statement that every single Apple share repurchased is "burned" and no longer exists.
https://www.aboveavalon.com/notes/2021/1/13/apple-won-the-share-buyback-debate
Like I said in my last post, I am done having lengthy educational sessions with people who either just want to bash my wildly successful investment in AAPL or who don’t understand terms like EPS, outstanding share count, RSUs, etc.
Have a wonderful week!
You too have a great week, sincerely.
So far Apple has repurchased over 5B shares of AAPL (split adjusted) with their buy back program, over the last 8 years. Apple now has about 16.5B shares outstanding.
If Apple had not repurchased those over 5B shares, there would be 22B shares of AAPL outstanding today.
Following me so far?
So if you want to think that Apple buy backs program had not help increase the share price of AAPL, then AAPL would still be at $145 a share today.
Would that be your thinking?
If so, then Apple would have a market cap of over $3T today. And actually hit that mark back in in Jan 2021, when AAPL hit $140 a share.
And instead of EPS of $1.30, EPS would had came in at $.99. ($21.7B net income / 16.5B shares vs $21.7B / 22B shares) Apple buy backs has increased EPS by 30%.
Now if one want to argue that Apple would still have a market cap of $2.5T, even without the buy backs, then AAPL share price should be at about $1.15. ($1.15 x 22B shares)
One could reasonability argue that buying back shares every once in awhile, might not benefit future share price, even over the long term. But when a company buy back as much as Apple has bought back, over the last 8 years (and will continue to do so at the same or greater pace), no reasonable argument can be made that AAPL future share price did not and will not, benefit from buy backs.
I believe there has been some undefinable effect on the stock price, but not a single person here can put a dollar number to it. It could be $100, $25, $5 even possible if unlikely it could be none at all and the price today would be just as high without them. That's also more along the lines of Neil Cybart's thinking as far as I can tell. Raising the future stock price is not the goal, tho I would agree with anyone claiming it is a likely side-effect in the case of Apple. I might also agree there may be an identifiable cause and effect immediately surrounding each Apple buyback event, so temporarily bumping the price for those selling today is more likely, and I think you'll see Neil saying pretty much the same thing.
So here's a thought for you. An investor or manager controlling a huge number of Apple shares might benefit from selling when Apple is buying, then repurchasing at the price drop which inevitably happens. Maybe that's why the big guys like the buybacks. Truly I have no idea. I personally invest in tangible equipment, plant, and people rather than stocks. When those things go south I can usually understand why and if there was anything I could have done to prevent it. When they work it becomes a repeatable and dependable business plan within my control (for the most part) rather than at the whim of "the market" who may not have the same interests as me.
What I do not agree with is anyone claiming they know for a fact what the buyback effect on current and future stock price has been and will be and would challenge them to specifically define it if they find fault in that statement. It is entirely within the realm of possibility that you may get no more for your stock when you decide to sell than you would have had the buybacks never happened. Your faith that it will is what you have, and having faith is a wonderful and positive human trait, but that is not tangible proof you got your cut of the Apple cash.
A check is tangible proof.
EDIT: This is timely, an article discussing whether the stock market is operating on faith (there's that word) rather than tied to specific results.
https://www.wsj.com/articles/stock-market-records-rest-more-on-faith-than-corporate-profits-11626609277
If you don't have or want a WSJ subscription you can listen to the podcast:
1) If a corporation is worth $100 and has 10 shares issued each share is worth $10. If they retire 1 share the corporation is still worth #100 but each share is then worth $11.11. It's just math (assuming that the stock market passed grade school arithmetic)
If a $100 corporation uses $10 of its equity to retire a share then it is now worth $90. You can't spend money and still be worth the same amount, that is literally having your cake and eating it. The remaining shares are still worth $10; they have a greater share of a smaller pie, with the same worth per share as it did the day before the buy back. You can't just create wealth for shareholders the way you describe.
A corporation can realise greater value in the form of future profits that exceed expectations, and therefore cause the values of the remaining 9 shares to increase at a higher rate than 10 shares would have. That's the way that buybacks theoretically make money for shareholders, by concentrating earnings per share in a smaller pool.
Of course, in practice, share trading is all about expectations, and every action has a reaction, so it gets more complicated.
But the point remains, a company cannot just create shareholder value by buying stock. That should stand to reason, any way that value could be created from nothing would be a surefire hit. Let's take GeorgeBMac's idea to its extreme. A $100 company buys back 9 of its 10 shares. It's still worth $100 according to George, and the 1 remaining share is worth $100, but $90, 9 tenths of the value of the company has been spent, with no accountability or repercussion. It literally would not make sense for the world to work that way. Everyone and his mother would be taking out loans to buy back shares, because the market value would stay the same. No, it doesn't work that way.
Maybe I didn't explain well enough, but it makes perfect sense. Buying back shares does not create value for shareholders. Not at all. What it does it concentrate future earnings in a smaller shareholder pool. If future earnings are more than the stock price has previously valued them at, then the market value goes up and the remaining shareholders benefit even more than they would have before the buy out. If it is less, then the loss is also concentrated and the stock price goes down by even more than it would have before the buyout. Stock buyouts do not deliver value, then just concentrate increases or decreases in value amongst a smaller pool.
And of course, all this is compounded by speculation. The stock price may dip after a buy back because some people believe it's time to jump ship because they're expecting bad results. Buy backs are generally thought to be a company expressing confidence in the value of its stock, but that belief can be used cynically to attempt an artificial bump. If investors see through it that can backfire. That part is all about confidence, or lack of it in the market's judgement of the company and the actions of the company.
It’s all a casino, or more aptly, it's like a global game of poker. Some players are great at the maths, working out the probabilities, and can make money that way, some others just go on instinct and may or may do well, but generally the best players are those that are good at reading the whole game, understanding the maths and the other players. And the dealer too, you've got to understand the dealer, and if they're dealing a loaded hand.
Buy backs are like the house placing a big bet on their own hand. They might be bluffing.
(and after that the analogy falls over, because it's not really like poker)