Apple’s financial engineering in one chart

[ghanwani]

Came across this tweet today

https://twitter.com/i/web/status/1784721452203155956

Beautifully demonstrates Apple’s financial engineering in one chart.

If you look at Apple stock price, the time they started this circus is when the stock price took off.

Also note the circus started after Jobs.

 

[apostolosdt]

A bit of explanation for those “illiterate”?

 

[ghanwani]

There’s a detailed explanation in the article linked within the tweet.

Essentially, they started using leverage which is taking on long term debt and using that to buy back stock (which reduces the number of outstanding shares in the market). This increases earnings per share without an actual increase in total earnings which allowed the stock to appreciate without any substantial earnings growth.

 

[JustAnExpat]

There’s a detailed explanation in the article linked within the tweet.

Essentially, they started using leverage which is taking on long term debt and using that to buy back stock (which reduces the number of outstanding shares in the market). This increases earnings per share without an actual increase in total earnings which allowed the stock to appreciate without any substantial earnings growth.

But Apple's earnings have been growing.

https://www.apple.com/newsroom/2024/02/apple-reports-first-quarter-results/

Are you saying they are lying to the government?

 

[ghanwani]

But Apple's earnings have been growing.

https://www.apple.com/newsroom/2024/02/apple-reports-first-quarter-results/

Are you saying they are lying to the government?

Look at the green bars in the attached chart. Aside from the most recent quarter, their net earnings have been more or less flat for the last several years. Earnings per share has been going up because number of shares is going down.

(Chart from https://applescoop.org/story/apple-reports-record-breaking-q1-2021-earnings)

 

[dmccloud]

Look at the green bars in the attached chart. Aside from the most recent quarter, their net earnings have been more or less flat for the last several years. Earnings per share has been going up because number of shares is going down.

(Chart from https://applescoop.org/story/apple-reports-record-breaking-q1-2021-earnings)

That chart ends in Q1 2021 - that's not even remotely the most recent quarter. In fact, the chart in the first post in this thread also ends in 2021, yet the author of that chart misrepresents that as current (2024) data to drive people to her website and services. Sorry, but using information with a cutoff date of three years ago and ignoring everything since does NOT equate to accurate analysis, and opens one up to questions regarding the motivations behind such selective analysis.