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Carl Icahn Presses for Apple Shareholder Vote on Increased Stock Buyback
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Indeed. It's worth noting though that Apple - the company - cares about exactly the same thing.
Without any doubt he is out for himself.
He's a Stock shark and has broken up companies left and right.
I do think apple should be doing Dividends but He is basically looking for a quick win.
He's a Stock shark and has broken up companies left and right.
I do think apple should be doing Dividends but He is basically looking for a quick win.
Not necessarily, not by a long shot. I've been an investor in this company for over 15 years now, so I think that counts as long-sighted. Apple is not a bank and is not in the business of accumulating cash and investments. Icahn is perfectly correct, and I would have to say so if only because I've arguing the exact same thing since Apple's cash hoard was a measly $25b.
One problem, correct me if I'm wrong, is that most of that money is not in the US. Meaning they would either have to deplete their US reserves (not smart) or pay a significant tax bill on repatriating the money to purchase the shares.
What is this guy talking about? They're obviously not concerned about market share and just like Ferrari makes luxury cars apple makes premium phones while the guys who hold all the market share make cheap phones which is why they have their precious no money making market share. Also who says they aren't researching new technologies?? I see new patents damn near weekly. Bottom line is Carl wants more money to hoard himself. Apple should keep focusing on churning out great products. Period.. They'll always make money as long as they keep making quality products. Funny how people always say apple doesn't innovate anymore.. Can anybody name another company that has made 3 revolutionary products that changed and upended industries in the last 12yrs?? I can't.. iPod, iPhone, iPad... nuff said! Oh Macbook Air also started a new ultra thin laptop industry. All these companies need to thank Apple for giving them a blueprint on how to make great products.
Actually, despite their secretive nature, if you are a satisfied customer/fan, and an investor, their actions become more predictable the closer you observe.
If nothing else, you can count on them wanting to make the best product on their own schedule. When they take chances into new ventures, more often than not it works out; which is more than I can say for Sony and Microsoft.
I wish that one day Apple goes private.
This shareholder nonsense is so tiring. People just hoping to make a buck off of Apple's hard work and success. Are some shareholders really that delusional to think that somehow their investment in the company is helping them succeed, so they are entitled to the profits? Yes, they are entitled to profits from their investment, but their investment is not contributing to Apple's success. When it comes to Apple, shareholders are simply slimy slugs slowing the company down from what they really exist for... making great products and services!
This shareholder nonsense is so tiring. People just hoping to make a buck off of Apple's hard work and success. Are some shareholders really that delusional to think that somehow their investment in the company is helping them succeed, so they are entitled to the profits? Yes, they are entitled to profits from their investment, but their investment is not contributing to Apple's success. When it comes to Apple, shareholders are simply slimy slugs slowing the company down from what they really exist for... making great products and services!
Or float short term bonds, as they have done already. In any case the additional $50b buyback Icahn is proposing doesn't have to take place all in one year.
Either way, at some point Apple will have to address all of the overseas cash. It doesn't make any better sense to stash cash offshore than in the U.S. -- either way, it's money not doing anything useful for the company or the stockholders. The excuse that repatriating it produces a tax liability is going to wear pretty thin. It has already really. They can't keep kicking that can down the road forever.
You are correct. But my understanding is that they are taking on US debt to support the share buyback program. There's a healthy amount of debt that companies should/could keep on their balance sheets and that's what Apple has decided to do in this case.
ICan go away!!!
these greedy money grabbing characters make me sick, they're slowly turning every company in a tool to make money for them selves, look around, everywhere they get their greedy paws on, all soul disappears, all life goes out, these companies turn in to lifeless corporate organisations with substandard products and even slower innovation, and apple is an innovation company, they make great products, and they should continue to do so, these guys have absolutely nothing what so ever to add to the value of Apple. Apple doesn't need investors or more money, they have plenty, so go away!!!
DON'T fall for it Apple, stay true to your values, be a rebel, be a misfit, be 'the crazy ones', because those who believe they can change the world, are the ones who do! Remember?
(and yes I know Apple is a publicly trading company, perhaps it's time they went private again, I've got nothing against Apple making a healthy profit on it's products, but making great products that make money for them should be their focus, turning into a corporation governed by people like this guy, will only divert the focus away to what they should be working on, with these guys around all the board will ever spend their time on is how to make money for these guys to keep them quiet, while they should be focusing on running the company to make great products that turn them a profit)
these greedy money grabbing characters make me sick, they're slowly turning every company in a tool to make money for them selves, look around, everywhere they get their greedy paws on, all soul disappears, all life goes out, these companies turn in to lifeless corporate organisations with substandard products and even slower innovation, and apple is an innovation company, they make great products, and they should continue to do so, these guys have absolutely nothing what so ever to add to the value of Apple. Apple doesn't need investors or more money, they have plenty, so go away!!!
DON'T fall for it Apple, stay true to your values, be a rebel, be a misfit, be 'the crazy ones', because those who believe they can change the world, are the ones who do! Remember?
(and yes I know Apple is a publicly trading company, perhaps it's time they went private again, I've got nothing against Apple making a healthy profit on it's products, but making great products that make money for them should be their focus, turning into a corporation governed by people like this guy, will only divert the focus away to what they should be working on, with these guys around all the board will ever spend their time on is how to make money for these guys to keep them quiet, while they should be focusing on running the company to make great products that turn them a profit)
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Wrong. The overseas cash is being used to support their overseas operations. Why bring overseas money that was earned overseas back to the US (it's not owned by the US!), pay a high tax rate to the US government, and then spend the remaining money again on overseas operations? That would be illogical. Apple may be a US company, but they are a multi-national company, too.
(I could say something about the American entitlement issue, but I will refrain... oops, maybe I just did!
)
Wouldn't you rather they invest the money in ... well ... something that improves the iPhone or iPad or even OS X?
As an Apple shareholder I too would like to see this. I fully support what Carl Icahn is trying to achieve here. The desired outcome would actually be great news for consumers too who would benefit from greater shareholder confidence.
Not to sound rude, but how does "greater shareholder confidence" do anything for the consumers? Would their confidence mystically make the iPhone/iPad better or cheaper? Would it make Macs faster or cheaper, OS X less buggy? Would iOS suddenly be more efficient or gain more features?
How would the confidence of a bunch of people actually help anyone?
Wrong. The overseas cash is being used to support their overseas operations. Why bring overseas money that was earned overseas back to the US (it's not owned by the US!), pay a high tax rate to the US government, and then spend the remaining money again on overseas operations? That would be illogical. Apple may be a US company, but they are a multi-national company, too.
(I could say something about the American entitlement issue, but I will refrain... oops, maybe I just did!
Wrong. The overseas cash, just like the accumulated cash held in accounts in the U.S., it isn't supporting operations. The cash, by definition, is in excess of operations. Apple's free cash generation (meaning, what is left over after paying for operations) is about $1b a week, and rising. Maybe Apple is saving for its retirement.
If they could drive earnings with the cash, sure. But the curve of accumulation just keeps accelerating. They simply cannot spend this amount of free cash on growing the business, at least not responsibly.
Call me naive but you just can't go into your company's safe and take money. You'd go to jail. Stockholders can't just ask Tim to fork over money. If they want money let them liquidate their effing stock.
Also, why would Apple even consider borrowing 150 billion to buy back their own fu**** stock?
1) Apple would have to pay back, with interest, 150 billion to the banks.
How's that possible. Oh, because of the hype surrounding the iwatch and the Apple branded tv! Two rumored products!
But Apple makes over half its money from the iPhone. One goddamn, disposable product.
And how long would that elevated stock price stay up? A few days? Hours? Just enough time for Carl to cash out!!!
Also, why would Apple even consider borrowing 150 billion to buy back their own fu**** stock?
1) Apple would have to pay back, with interest, 150 billion to the banks.
How's that possible. Oh, because of the hype surrounding the iwatch and the Apple branded tv! Two rumored products!
But Apple makes over half its money from the iPhone. One goddamn, disposable product.
And how long would that elevated stock price stay up? A few days? Hours? Just enough time for Carl to cash out!!!
When Apple eventually tells him the answer is NO, he will sue and waste a bunch of Apple's money and management's time on a frivolous lawsuit. Tim Cook is wisely stalling him for as long as possible because it is cheaper / easier that way. Eventually he will realize he is being given the runaround...
Me too. By the time this motion is voted on, Apple may hold $150 billion in cash. Spending 1/3 of that on buy back and destroy the shares will be a tremendous boost for the stock. Apple would still be left with $100 billion that it really doesn't know what to spend on. Their acquisitions hardly amount to $1 billion per year, and even their new spaceship campus is only going to cost $10-$15 billion. By the time it's completed, Apple will be sitting on another $60-70 billion or may even reach $200 billion on cash reserves. Apple loses billions due to inflation by keeping this much cash in the bank.
When all is said and done, Apple is a corporation, and its only purpose is increase the value of its shares for the benefit of shareholders.
Here's the real difference between Apple and Google. Apple is buying back shares and destroying them, thus deflating the pool of outstanding shares, whereas Google keeps issuing more shares, thus inflating the pool of outstanding shares. Additionally, Apple pays dividend, and Google doesn't. Therefore, those who are trying to benefit on GOOG must engage in market speculations to be able to extract any value out of their stock holdings, whereas AAPL shareholders can hold onto the existing shares and keep buying more because the value of their holdings is increasing as the time goes on, and the more shares they hold, the higher is their dividend yield. This pretty much covers the major difference in philosophies between the two companies. Apple is there to benefit both its customers and its shareholders, and Google is there to screw everyone.
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