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Apple Reports Q3 2013 Quarterly Results: $6.9 Billion Profit on $35.3 Billion in Revenue [Call Concluded]
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If you think I clearly don't, then you clearly don't. I feel bad for your maths teacher.
I can only judge by what you have said, none of which indicates an understanding of the concept of market cap. I am not the only one here who has picked up on this and tried to explain it to you. What this might have to do with my "maths teacher" will have to remain a mystery as I am sure it defies explanation.
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Financial results are always released after the regular markets close.
AAPL was trading down during the day of the announcement, as investors were seemingly betting on lower than expected results. When the results were better than expected, the shares rallied on the after hours market, and the pop held into the start of regular trading this morning. Not that they always do. After hours trading is much lower volume than the regular market so changes can be exaggerated.
That doesn't really make sense to me. Where I live the iPad costs something like 400-500 euros, iPhone 5 is at 679 euros.
You do realize that if you got an off-contract phone you could probably save the actual cost of the device during those 2 years? (I think).
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To tell you the truth I don't know a single person that has updated from any iPad to a newer one. Even amongst tech enthusiast the iPads seem to have a considerably longer lifetime than the phones (avg 18 months).
Even when Apple's growth was absolutely destroying Amazon, it was still valued at around 10-15 P/E.
In fact AAPL was valued at more than 100 time earnings during the mid-2000s. Because it isn't about growth, it's about expectations of growth.
And how long has Wall Street been expecting growth for Amazon? It seems they get a pass every quarter as people excuse results away by saying its about "future growth". At what point does that future growth have to become reality? Never?
I assume the idea is to scoot by on minimal profits until they have a large enough share to control key markets. As long as they can avoid the Justice Department until it's too late.
Beats me. A lot of people asked the same question about AAPL in the mid-2000s when it was sailing along with PEs north of 50 for a few years. If they hadn't eventually delivered on those anticipated earnings then the market would have punished them. Not that I am buying into the AMZN story, but it isn't unique or even very unusual for the markets to play that sort of momentum. Maybe it's all smoke and mirrors in the case of AMZN. I really don't know.
i sure except apple's revenue to significantly increase in the next quarter, new products will play a major role.
I went back and checked and you are correct. I'm not sure why I misremembered that. The excessive P/E compression is a very recent phenomenon starting in 2010 or so. By then the growth was still crazy but the expectations for FUTURE growth were low, as there has been nothing revolutionary since the iPad.
I've been an AAPL investor for almost 16 years now, so I've seen it all. I don't know if the PE compression is necessarily excessive as I think the markets correctly anticipated a reduction in earnings growth rates. What you get typically from the markets is overreaction in both directions. The run past $700 was optimism writ large for no real reason, and just as much now the markets have written too much pessimism into the narrative. Apple needs to change the storyline, and they can only do that by releasing new products that make people excited.
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Stock buybacks is used to raise share price if it isn't going up naturally or as a method of transferring money to shareholders. This is advantageous because dividends are taxed as ordinary income while gains on the stock can be capital gains which is taxed at a lower rate.
# of shares outstanding decreases, but per share value increases and vice versa, probably a wash like you said.
I would say that share price is defined by supply/demand. A share of stock is only worth what someone is willing to pay, after all.
Someone like Bill Gates dumping all their MS shares at once on the market would wreck havok on the price. There would be a glut of supply as well as a bunch of people wondering why Bill G. would dump all their stock. This would be fun to watch if it actually happened.
Share price is a function of supply and demand.
Market Cap is a function of share price though. A company can control the # of shares and to an extent, the share price through buy backs, increase dividends, etc.
I can't agree with distilling market cap down to supply/demand. If that were a valid explanation, I could have aced my econ class by writing supply/demand as the answer to everything.
Supply/Demand would be 43.
Supply and demand is a function of a lot of factors like forecasts, perceived value, macro/micro economic conditions, passed/expired regulations, press releases, earnings calls, and thousands of other factors all dependent on what industry/geopolitical area you operate in, even human emotion.
Edit: 42, not 43. I better hand in my nerd card.
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Buybacks are mainly used to reverse dilution. This occurs in most companies over time because they are constantly issuing new shares and options to top executives. Apple has also bought back shares when the price was rising. They are being more aggressive now obviously, but buying back isn't a new policy at Apple or anywhere else.
Any time shares are sold buyers have to be found for those shares, but this is a very different matter than increasing or decreasing the number of shares in the float. One is a transitory effect; the other is a structural change.
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Wrong, again. At some point you might demonstrate that you know something about anything, but I am not going to hold my breath.