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Old Apr 24, 2013, 08:42 PM   #51
lk400
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Originally Posted by Apple Corps View Post
Not sure your analysis is correct. My point is that $50,000,000 in CASH is gone - money that could have been given to the owners - $51 per share. An increase in shareholder equity gets distributed how?
I think I understand your point. The future capital raising was to do with why a buy back at depressed share price is good for the company (i.e. a better scenario than sitting on a pile of cash, with the option to raise more capital down the track if needed), not necessarily the shareholder.

From the shareholders point of view if you take the buyback, you get above market value for the shares you sell, and in either case, the real value of the shares you retain (as in your share of the company, not necessarily the market price of the shares) should (theoretically) stay constant, even though the net assets on the balance sheet has decreased, your share of those net assets has increased. People who know these things will also say that the market price of the shares should increase (at least for some time) after a buy back as its generally seen as a positive indication in the market.

The dividend alternative also wipes the cash from the balance sheet, but the number of shares stay the same, so you keep the same share of fewer net assets and (theoretically) your shares become worth less (particularly given the size of the distribution).

A share buyback can also good for shareholders in countries where capital gains are taxed more lightly than revenue (not sure what happens in the US).

I am not an expert or a shareholder, so have no opinion either way - I just don't think that a buyback is necessarily a bad thing as it can benefit both shareholder and company, whereas I think a dividend really benefits only the shareholder.

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Originally Posted by FluJunkie View Post
Shares they buy back don't get dividends paid. If they can manage to borrow money for less than the dividends they'd pay out on those shares, they've made money with the loan.

Governments and large corporations don't work like your checkbook does.
I don't think the company works out dividends on a per share basis. I think it will work out the amount of the dividend and then divide it by the number of outstanding shares. Sure after a buy back the dividends per share will be bigger, but I don't think that having fewer shares outstanding directly affects the value of future dividend declarations.
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Old Apr 24, 2013, 09:06 PM   #52
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Originally Posted by Apple Corps View Post
You sure about that are you? Why is he named on over 300 patents and has been inducted into National Inventors Hall of Fame in 2012?

Also - http://patft.uspto.gov/netacgi/nph-P...bs%2C+Steve%22
Yes, I am sure about it. Do some real research and you'll be sure too. Even the original Apple computer was invented by Woz. Of course without Steve nothing would have come of it and there would be no Apple. Did you know that Johnny Carson is listed as one of the writers of the Tonight show theme song? He never wrote a note of music in his life. Thomas Edison didn't invent most of his patents either. His team of inventors came up with ideas and he took credit. If you want to know about a real genius inventor read up on Tesla. He worked for Edison and quit when he realized how dispicable and power crazed Edison was.
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Old Apr 24, 2013, 09:20 PM   #53
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YOU may be sure but there are many citations for inventions that Steve did.

I doubt that all 338 were co-invented or done by someone else.

My documentation came from the U.S. Patent Office search - so....
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Old Apr 24, 2013, 11:12 PM   #54
MacDav
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Originally Posted by Apple Corps View Post
YOU may be sure but there are many citations for inventions that Steve did.

I doubt that all 338 were co-invented or done by someone else.

My documentation came from the U.S. Patent Office search - so....
Well... Steve may have come up with some ideas and patented them, but can you name even one of them that is completely original, well known, or ground breaking in any way?
Yeah...I didn't think so. Just about any one can get a patent. Doesn't mean it's
worth the paper it's written on, and surely doesn't mean they are a genius inventor.
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Old Apr 25, 2013, 12:51 AM   #55
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Hey MacDay - you are popping off that he did not invent anything. I provide proof that he is listed as an inventor on over 300 inventions by the U S Patent Office. I backed up my contention with proof.

The burden is on you to prove your inaccurate and broad sweeping statement that he invented nothing.

I'll go with the patent office over you any day of this topic.
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Old Apr 25, 2013, 09:15 AM   #56
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It's really humorous to see how many financial "experts" we have here that are condemning Apple and Tim Cook for this move.

Warren Buffet told Steve Jobs on numerous occasions to buy back stock when it was low and he never did. Time Cook has his flaws but he does have more financial sense than Jobs.

If Buffet and Cook are both for this move then I would be more inclined to believe them that anyone else on this entire board saying otherwise.
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Old Apr 25, 2013, 12:47 PM   #57
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Leverage is a bitch!!! Especially when you don't pay her back!

You are also playing with 2 separate tax codes you DO NOT control. In short its dangerous form a corporate stand point. Apple has $40 Billion in CASH liquid and they want to buy stock back. WTF They are telling you they are out of ideas that will move.

The idea of owning stock is on expected earnings and performance. You buy because you believe or know that they will perform better year over year. If a company is full of idiots and cant find their ass with both hands then the stock will fall. If a stock is manipulated to cause it to rise when the real core numbers show a firm in the crapper then thats fraud. This has happened at least twice in the last 15 years. .coms, financials and housing bubble.

Look I told you guys when this stock was at 600 not to stand under it because you had a very good chance of getting squashed. There were some saying Apple 1000! It went to 700 and idiots bought in then. WTF. WELL lets see its trading above 410 as of right now. Thats 300 points off the high. 40% decrease, WTF. You might not have gotten flattened into a greasy spot on the floor but there is not a lot of headroom left where your standing.

This is a parabolic blow off.

Learn and live.

This time 2008 will look like a frat party gone bad. THis time you won't be getting head in the bathroom.
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Old Apr 25, 2013, 01:45 PM   #58
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Originally Posted by lk400 View Post
I don't think the company works out dividends on a per share basis. I think it will work out the amount of the dividend and then divide it by the number of outstanding shares. Sure after a buy back the dividends per share will be bigger, but I don't think that having fewer shares outstanding directly affects the value of future dividend declarations.
That's also not what I said.

The company does declare dividends on a per share basis - which means less shares outstanding means less dividends paid. So if the Cost of Borrowing Capital < Cost of the Dividends That Would Have Been Paid On Repurchased Shares, then the company has saved money by taking out the loan.

Intel did this earlier this year or late last year as well. They can, essentially, get free money thanks to the extremely low interest rate environment right now. Admittedly, it was a clearer benefit for Intel, as they pay a larger dividend. I haven't done the math for Apple.

This was just addressing the "They're borrowing money to do this, they must be stupid" types.

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Originally Posted by lk400 View Post
I am not an expert or a shareholder, so have no opinion either way - I just don't think that a buyback is necessarily a bad thing as it can benefit both shareholder and company, whereas I think a dividend really benefits only the shareholder.[COLOR="#808080"]
A buyback is beneficial to the company and the shareholders both assuming the shareholders have room to sell. That's the inherent problem with buybacks - while they increase the value of each share, thus returning money to shareholders, that increase is only realized when you sell the stock.

Dividends, on the other hand, give you money now, without needing to sell the stock.

Honestly, the best approach is probably a mix of both which is...exactly what Apple is doing.
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Old Apr 25, 2013, 03:51 PM   #59
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Hey MacDay - you are popping off that he did not invent anything. I provide proof that he is listed as an inventor on over 300 inventions by the U S Patent Office. I backed up my contention with proof.

The burden is on you to prove your inaccurate and broad sweeping statement that he invented nothing.

I'll go with the patent office over you any day of this topic.
You apparently missed my last post where I stated that he probably did patent some of his own original ideas. If any of those patents were noteworthy you can be sure the media would be all over them. They aren't. If you can show me even one patent he got by himself that is an amazing new innovation, I'll let you off the hook and admit I am wrong. You only have to provide one example. What's that...? You can't even find one?
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Old Apr 25, 2013, 04:11 PM   #60
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You apparently missed my last post where I stated that he probably did patent some of his own original ideas. If any of those patents were noteworthy you can be sure the media would be all over them. They aren't. If you can show me even one patent he got by himself that is an amazing new innovation, I'll let you off the hook and admit I am wrong. You only have to provide one example. What's that...? You can't even find one?
You are the one on the hook, not me. Quoting you:

"If you mean Steve Jobs was their source of innovation, well then you are greatly mistaken. Steve Jobs never invented anything."

The U S Patent Office just proved you wrong. You go sort through those 338 patents that Steve is named on - I'll not waste my time. And BTW - don't try to shift the argument mid stream from your original statement that "Steve Jobs never invented anything" to a transparent face saving position of nothing noteworthy or by himself.

When you have dug yourself into a hole the best course of action is to stop digging.
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Old Apr 25, 2013, 04:46 PM   #61
Apple Corps
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Hey MacDav - read this as well:

http://www.pcmag.com/slideshow_viewe...42&po=1,00.asp

As an FYI:
Attached Thumbnails
Click image for larger version

Name:	Steve's Patents:1.jpg
Views:	11
Size:	306.4 KB
ID:	409617  
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Last edited by Apple Corps; Apr 25, 2013 at 05:42 PM.
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Old Apr 25, 2013, 11:43 PM   #62
MacDav
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You are the one on the hook, not me. Quoting you:

"If you mean Steve Jobs was their source of innovation, well then you are greatly mistaken. Steve Jobs never invented anything."

The U S Patent Office just proved you wrong. You go sort through those 338 patents that Steve is named on - I'll not waste my time. And BTW - don't try to shift the argument mid stream from your original statement that "Steve Jobs never invented anything" to a transparent face saving position of nothing noteworthy or by himself.

When you have dug yourself into a hole the best course of action is to stop digging.
Sounds like you have a lot of experiece digging yourself into a hole.
Seriously, I should have said "Steve Jobs never invented anything important".
Then you wouldn't have a leg to stand on. As it is now you keep wiggling out of the hole you dug for yourself. It's quite amusing to watch you grasp at straws.

Apple changed the world thanks to the amazing leadership of Steve Jobs. He is one of my personal hero's. Still, though I much admire him I'm honest enough to say he was not the inventor of any of Apple's products. He was the one who had uncommon vision in knowing which innovations were going to change the world and was able to inspire his many brilliant engineers to greatness. He was not the primary inventor at Apple as you proclaimed in your original post. This was my original point and is the point of my contention. Do you not agree? Don't try to wiggle out now.
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Old Apr 26, 2013, 12:32 AM   #63
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I think you are the only one grasping at straws.

I presented facts from multiple sources - you have presented only your opinion, which is clearly not supported by the facts.
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Old Apr 26, 2013, 02:45 AM   #64
MacDav
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I think you are the only one grasping at straws.

I presented facts from multiple sources - you have presented only your opinion, which is clearly not supported by the facts.
So do you still stand by your original post that Steve Jobs was the primary source of invention at Apple? Oh and by the way none of the patents in your link were invented by Steve Jobs. He might have put his name on the patent but he was not the inventor. In fact Steve talked about the guy who came up with the dock UI. He hired the guy on the spot when he showed him the dock UI. All of the examples in your link are co-patents, none were done by Steve alone. So you failed again, why not just admit defeat.
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Old Apr 26, 2013, 06:42 PM   #65
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Originally Posted by rotorblade69 View Post
Leverage is a bitch!!! Especially when you don't pay her back!

You are also playing with 2 separate tax codes you DO NOT control. In short its dangerous form a corporate stand point. Apple has $40 Billion in CASH liquid and they want to buy stock back. WTF They are telling you they are out of ideas that will move.

The idea of owning stock is on expected earnings and performance. You buy because you believe or know that they will perform better year over year. If a company is full of idiots and cant find their ass with both hands then the stock will fall. If a stock is manipulated to cause it to rise when the real core numbers show a firm in the crapper then thats fraud. This has happened at least twice in the last 15 years. .coms, financials and housing bubble.

Look I told you guys when this stock was at 600 not to stand under it because you had a very good chance of getting squashed. There were some saying Apple 1000! It went to 700 and idiots bought in then. WTF. WELL lets see its trading above 410 as of right now. Thats 300 points off the high. 40% decrease, WTF. You might not have gotten flattened into a greasy spot on the floor but there is not a lot of headroom left where your standing.

This is a parabolic blow off.

Learn and live.

This time 2008 will look like a frat party gone bad. THis time you won't be getting head in the bathroom.
Apple has $145 billion in cash. That's way more than what Apple needs. It's one thing for a company with a a third of that to buy back stock and it's another thing entirely for a company to have the cash hoard of the size Apple has. I don't think any tech company has had that level of cash in recent memory. Microsoft and Intel paid out dividends and bought back stock with even less of a cash pile.

Apple didn't have a choice. They have a fiduciary responsibility to shareholders. What's funny is that people say that Apple is being greedy by refusing to issue a dividend. When Apple does that, people say stuff like, "they've run out of ideas" or "Steve never would have done that." Realize that that $145 billion cash hoard is what's left after Apple has made the required and discretionary outlays. This means that by the time the cash gets added to the growing cash hoard, Apple has invested as much as they need in operations and capital assets. That cash is earning nothing sitting in a bank. Why not pay it out to shareholders and let them generate more of a return.
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Old Apr 26, 2013, 08:48 PM   #66
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Apple has $145 billion in cash.
Then why is Apple borrowing money for the buy-back?
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Old Apr 27, 2013, 01:56 AM   #67
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Then why is Apple borrowing money for the buy-back?
Because they would take a huge tax hit if they were to repatriate the money and buy back stock.
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Old Apr 27, 2013, 11:48 AM   #68
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Because they would take a huge tax hit if they were to repatriate the money and buy back stock.
And interest rates are lower than the dividend so it is a net positive financially.
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Old Apr 29, 2013, 06:35 AM   #69
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"I'd shut it down and give the money back to the shareholders"
-Michael Dell, 1997

I guess they're finally taking his advice.

Rampdown strategy:

1) stop making innovative products and instead start fielding spec-bumped also-rans and competing modestly into segments that others are already dominating

2) start giving cash hoard back to investors rather than using it to invent killer new market segments

3) start buying shares in a company whose stock is a) overvalued due to hype, and b) on a downward trajectory.

A logical approach now that their source of innovation died.

Cheer up Eeyore
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