The only bad part for Icahn haters is that he was right.
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That's the only theory that makes any sense, but I can't imagine why Apple would care whether they were part of the DJIA.
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Apple's Stock Price Breaches $600 for First Time in 18 Months
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The only bad part for Icahn haters is that he was right.
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That's the only theory that makes any sense, but I can't imagine why Apple would care whether they were part of the DJIA.
"...revolutionary product innovations every thirty minutes..." - you may have set a new standard for hyperbole.
...I bought AAPL at $12 and sold it at 650, then bought it back at 400 and sold it at 500, and have now bought it back at $520 and am holding.
It was never a question of him being "right" (he wasn't, at the time). It's a question of him being a scumbag.
I am not interested in his character, as I am not planning on having him over for dinner. As a stockholder, the only question that interests me is whether he was right on the money. He was.
...he wasn't. He was trying to drive up interest in the company and get it to go back up again to make money. This failed. The fact that it eventually went back up didn't have anything to do with his claim that buying apple was "a no-brainer," or his reasons for it being so.
It would be like me saying "Buy TSLA, they're going to be coming out with an AMAZING car next year and everyone's going to buy it, the stock will soar!"
The next year, they continue the same Model S, but growth explodes and revenues are enormous, and the stock skyrockets. I was right about the stock trajectory, but completely wrong about the reasons. Which basically makes me wrong, unless you want to count random chance as making me right.
He was, by any definition that actually makes sense. He invested billions in the stock because he felt it was undervalued, and represented an opportunity to make even more billions. The stock bounced up every time he announced another investment, it bounced up some more when the company announced accelerated buybacks and increased dividends, both of which he advocated. He also strongly endorsed the leadership at Apple and expressed the belief that the company's best years were ahead. In fact Carl Icahn was just about the only person of consequence saying anything positive about Apple over the last year or so. As a longtime AAPL holder, I couldn't help but notice. I don't have to like Carl Icahn to understand that he was right.
If you don't think any of this matters, then you don't understand the stock markets.
Here we are Friday morning and AAPL is back down to $583. Billions and billions of dollars squandered on buybacks and long term shareholders have little, if anything, to show for it.
The market is simply NOT responding to the buybacks in a favorable and sustainable fashion.
The market is simply NOT responding to the buybacks in a favorable and sustainable fashion.
Let me put some numbers out to help explain my complaints about the buyback. My view is that of a long term shareholder - NOT anywhere close to a day trader and postulates that I hold 1,000 shares.
Approach 1 - The Buyback - Apple spends $10,000,000,000 to buyback shares. So far there is little, if any, sustainable increase in share price. Apple has 10,000,000,000 fewer $$, somewhere around 17,000,000 fewer shares on the open market, I still own my 1,000 shares and their value is whatever the market gyrations make it out to be. Those gyrations include new product rumors, lack of new product complaints, EPS rumors, Tim Cook is failing, he is succeeding, splits, etc..... As a long term shareholder I've gained zip.
Approach 2 - The Large Dividend - Apple takes that same $10,000,000,000 and issues an extraordinary dividend. That $10,000,000,000 divided by 923,000,000 shares generates a dividend payment of $10.60 per share. For my 1,000 shares I now have $10,600 in my pocket - that is a real ROI and not subject to the whims of the market gyrations. Add to that the announced dividend payout of $ 3.20 and my ROI has increased to around $13,600
As all shareholders are part owners of Apple Inc. and we expect attractive returns and do not want to see the enormous earnings that our corporation has generated being wasted in the buyback program that that has not demonstrated any sustainable gain for us. My belief is that day traders / other very short term shareholders are the only ones gaining - not what we should encourage.
Approach 1 - The Buyback - Apple spends $10,000,000,000 to buyback shares. So far there is little, if any, sustainable increase in share price. Apple has 10,000,000,000 fewer $$, somewhere around 17,000,000 fewer shares on the open market, I still own my 1,000 shares and their value is whatever the market gyrations make it out to be. Those gyrations include new product rumors, lack of new product complaints, EPS rumors, Tim Cook is failing, he is succeeding, splits, etc..... As a long term shareholder I've gained zip.
Approach 2 - The Large Dividend - Apple takes that same $10,000,000,000 and issues an extraordinary dividend. That $10,000,000,000 divided by 923,000,000 shares generates a dividend payment of $10.60 per share. For my 1,000 shares I now have $10,600 in my pocket - that is a real ROI and not subject to the whims of the market gyrations. Add to that the announced dividend payout of $ 3.20 and my ROI has increased to around $13,600
As all shareholders are part owners of Apple Inc. and we expect attractive returns and do not want to see the enormous earnings that our corporation has generated being wasted in the buyback program that that has not demonstrated any sustainable gain for us. My belief is that day traders / other very short term shareholders are the only ones gaining - not what we should encourage.
Let me put some numbers out to help explain my complaints about the buyback. My view is that of a long term shareholder - NOT anywhere close to a day trader and postulates that I hold 1,000 shares.
Approach 1 - The Buyback - Apple spends $10,000,000,000 to buyback shares. So far there is little, if any, sustainable increase in share price. Apple has 10,000,000,000 fewer $$, somewhere around 17,000,000 fewer shares on the open market, I still own my 1,000 shares and their value is whatever the market gyrations make it out to be. Those gyrations include new product rumors, lack of new product complaints, EPS rumors, Tim Cook is failing, he is succeeding, splits, etc..... As a long term shareholder I've gained zip.
Approach 2 - The Large Dividend - Apple takes that same $10,000,000,000 and issues an extraordinary dividend. That $10,000,000,000 divided by 923,000,000 shares generates a dividend payment of $10.60 per share. For my 1,000 shares I now have $10,600 in my pocket - that is a real ROI and not subject to the whims of the market gyrations. Add to that the announced dividend payout of $ 3.20 and my ROI has increased to around $13,600
As all shareholders are part owners of Apple Inc. and we expect attractive returns and do not want to see the enormous earnings that our corporation has generated being wasted in the buyback program that that has not demonstrated any sustainable gain for us. My belief is that day traders / other very short term shareholders are the only ones gaining - not what we should encourage.
You don't know what the stock price would be without the buybacks. Also, the tax treatment is better with capital gains as you can continue to defer taxes as long as you want. The extraordinary dividend would result in an extraordinary tax bill in the year of the payout.
No, your tax assumptions are incorrect - most of my holdings are tax sheltered.
Also, I know what the stock price range prior to the buyback over the past year or so - AAPL is now at $580 - dropping back into that pre-buyback range. There are simply too many moving parts in the market's valuation of AAPL to be wasting so much of our $$ in buybacks - the leverage is just not there.
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Adding to my comment above - I am waaaaay better off getting dividend $$$ that I may have to pay some higher taxes on but AT LEAST I HAVE THOSE $$$.
The buyback - not so much.
They bought Beats from Dr.Dre for 3.2 billion $, that is a investment reaction I would say.
If you're in a tax-sheltered plan, then you're right it makes no difference.
But, because of buybacks, EPS is higher than without the buybacks. EPS is one of the most important criteria in evaluating stock price.
If you want the cash, then dividends might work better. But you said you're a long-term investor in a tax-sheltered account?
By "I want the cash" I mean that when the dividend is paid into my tax sheltered holdings I know I have something and no tax impact. When the billions are spent on the buyback I have nothing but short term, gyrating share price that starts to drift down in short order. The higher EPS due to fewer shares on the market sounds great in theory but other market influences / gyrations overwhelm that theoretical gain. Hope that clears up some of my thinking.
I get your thinking and it makes sense. What I'm saying is that all things being equal (including the "market influences / gyrations"), the stock price is higher today than it would be without the buybacks.
For example, AAPL is trading at $583 today. Without the buybacks, EPS would be lower, and it would likely be trading at $560 or less. That is the value to you of the buybacks.
Of course it is. EPS is raised proportionally to the number of shares taken off the table, so the buybacks are baked into the share price. Some people just seem to be relentless negative about everything Apple does or does not do.
But all things are never equal in a highly dynamic setting like we are dealing with. For me, I'd rather be dealing with that lower share price while we all wait for the great pipeline of new category products to open up AND have that extra $10,600 in my account for a few quarters a year - that is a sure thing - cash in hand so to speak.
Other factors will overwhelm the slightly higher EPS due to the buyback.
We are still down $120 per share from 20 months ago and trading at a low multiple.
Lets just hope that there is a real pipeline of new category innovations headed our way and NOT simply a pipe dream Cook has been peddling. We will know soon - 2014 is almost 40% over. It has been over 4 years since the iPad was introduced.....
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IJ - the buyback may be baked in but I don't think it is making the dough rise that much for the expenditure.
Other factors will overwhelm the slightly higher EPS due to the buyback.
We are still down $120 per share from 20 months ago and trading at a low multiple.
Lets just hope that there is a real pipeline of new category innovations headed our way and NOT simply a pipe dream Cook has been peddling. We will know soon - 2014 is almost 40% over. It has been over 4 years since the iPad was introduced.....
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IJ - the buyback may be baked in but I don't think it is making the dough rise that much for the expenditure.
Please read what Apple Corps just wrote two posts (and then another couple) down.
The bottom line; anyone who claims to "understand" how the stock market works is either lying, or deluding themselves. Sure, we all have a basic understanding of how it's supposed to work. And some of us are very successful.
But if any of us think we can accurately predict what stocks are going to do with an even 75% (long term, sustained) accuracy, we are kidding ourselves. There are far too many variables, and many of them are invisible to anyone other than a machine-- and even the machines actually have fairly limited data sets, some of them trading millions of times a second on relatively little information.
To fellow shareholders, are you planning to sell before the split or hold on till end of the year to see what's in store?
I have been seeing his litany of complaints for some time now, and frankly have become weary of the negativity.
I have never tried to predict anything. If you think I have said that, then you should read my posts again.
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The split is a nonevent. It should have absolutely zero affect on whether you decide to buy, sell, or hold.
I've held on this long and will be holding on to see if the touted pipeline really delivers. If it does, the wait will have been worth it. If it turns out to be a pipe dream - yikes...
Nah it'll have an effect on whether you buy. Cuz it's cheaper. No effect on whether you sell or hold.
IJ - you call it negativity - I call it reality. I believe you are a long term investor and not a frequent trader. If so, how can you possibly be satisfied with what has happened to your AAPL portfolio?
From a high of $702 in September 2012 your AAPL investment cratered 40% and after 20 months has still not recovered to the previous high. And no - $702 was not a bubble.
From a high of $702 in September 2012 your AAPL investment cratered 40% and after 20 months has still not recovered to the previous high. And no - $702 was not a bubble.