Exactly. I saw a meme that said never take advice from someone with **** eyebrows.
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Carl Icahn Asks for Accelerated Stock Repurchase Program in Letter to Apple's Tim Cook
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Exactly. I saw a meme that said never take advice from someone with **** eyebrows.
He's obviously impatient. He doesn't understand that Apple isn't a high growth stock any more since they started paying out dividends and their profits have kind of flattened. It's normal for companies to do this since they can only be in high growth for so long. He should have invested in APPL back in the late '90's and just waited 15 years, then he wouldn't be complaining.
He got in too late to reap the benefits of Apple's high growth rate and now he wants Apple to increase their debt position by selling bonds against the profits in Ireland.
Apple has to make sure they don't rack up too much debt to negate the cash reserves.
But in this time of runaway capitalism, where schools and even TV news shows have to show a profit, he's probably going to be lauded as a minor saint after he's dead. It appears that today's business schools could be radically shortened to about a week if they just focused on the many ways to screw the living poop out of as many people as they can.
It still makes me wonder why Bernie Madoff was dealt with so harshly. They didn't like getting cheated like 'the rest of us'?
Yes, it will allow them to ride out a rocky patch. But we are now talking about $166 billion. And there is every indication that lots more profit is coming. At some point the rainy day concern becomes ridiculous. Apple is well past that point. The only product that it makes in sufficient scale to even be material at the $100 billion level is the iPhone. And it is selling those as fast as it can have them made. And it sells them at a huge margin. Even if demand for the iPhone dropped by 70%, Apple would still be a profitable company and would NOT have to dip into its cash reserves to ride out this "rocky patch". And 70% demand drop is inconceivable judging by the iPhone 6 launch.
We've been having these debates for years. Apple needed a $40 billion cash pile to "ride out the rocky patches". Then it needed a $70 billion hord. Then a $100 billion. Then $150 billion is suggested as prudent.
Really, I'm curious. Where do you draw the line? Is it $200 billion in cash reserves? At that point to do you say, "Apple can ride out a rocky patch, no more cushion is necessary."
Except, they don't. That's why it's a pile of cash, not a pile of investments. It's literally doing nothing to create new sources of profit.
I posted this on page 7 but this is a great article on buybacks written by one of the top authorities on valuation. I strongly encourage you to read it - it might make you think about buybacks vs dividends a little differently:
http://aswathdamodaran.blogspot.com/2014/09/stock-buybacks-they-are-big-they-are.html
Anyone who would like to actually understand the relevant issue here should read the above. I am more than willing to explain anything you don't understand or address any disagreements as the Professor's thoughts on the subject are consistent with mine.
I don't think you know how this works. You made the assertion that what he's doing would have been illegal - back it up. I don't think you'll be able to.
Quite right. What a number of people seem to miss it that if the money is sitting as a pile of cash, then it is being used to do nothing (well, maybe drawing short term interest, but that's it). That's just how financial accounting works. This is not a matter of opinion.
Please explain how Icahn's proposal screws the living poop out of Apple's shareholders.
Sorry, he had it right. The current value IS the market value, which is based on the share price times the number of shares outstanding. "Undervalued" or "overvalued" is an individual opinion, based (one hopes) on an individual's estimate of future discounted cash flows being different from the market consensus.
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Yes, your statement is accurate.
No, he's a vulture. And vultures are good for the ecology. They recycled underutilized dead flesh, which eventually gives rise to new life. Vulture capitalists do the same. That pile of idle cash could be returned to the stockholders, who will then reinvest in other companies that actually need the capital to make productive investments.
You don't have to be a nice person, or an unselfish one, to make a positive contribution to the economy. Sometimes it takes a creep to kick sloppy managers into doing the right thing, like recycling idle cash.
The only good thing that can be said about this picture is that it looks like he just stroked out.
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These posts have been some of the most annoying I've read on Mac Rumors.
Ha, I think maybe 2 posters on this thread have any type of fundamental understanding of investing and markets.
Always entertaining to read these fools post here.
iCon overstates things pretty seriously. Buybacks don't typically affect stock price the way he pretends they do, and AAPL is absolutely not "dramatically undervalued."
I can see it going up another 30% after profits come in, and yes, we all know they're going to be colossal and blow analyst predictions out of the water (I mean, really, this is going to be insane), but $200? Please.
You know how I *know* it's not undervalued though? Because it's selling at what it's selling at. Everything in this world, and that includes stock prices, are worth precisely what people are willing to pay, and nothing more.
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Good move.
And eeks, his nails are longer than mine and I'm a woman who does sometimes wear nail polish. I wouldn't be surprised to see claws like that around a poisoned apple.
LOL. Oh Lord, that was not imagery I needed floating around my pretty little head.
Mine too; there's just something about seeing an entitled, bullying, whiny infant get what it wants that's simply distasteful.
That presupposes, of course, the extent of the rocky patch. And many, many many falls of corporate giants are "inconceivable" until they happen.
Apple was also growing that whole time. As the company gets larger, in order to sustain it through a downturn, the necessary reserve also gets larger.
Where do I draw the line? Personally, I'd prefer they not go scampering after Ichan's favor until after Campus 2 is finished. Ambitious corporate HQs have a very bad track record.
This is pretty silly.
Hedge funds by and large make money for hedge funds, investors, at least small investors, tend to break even at best due to premiums. If you want a fund that makes you money, get an index fund.
I don't know if Icahn is an exception, I doubt it, but he's an asshat and even if he was (an exception) I wouldn't invest.
Also, clearly he couldn't purchase 51% controlling shares of the company. He doesn't have $306b sitting around.
That's pure BS. It's only his money because he gets massive tax breaks (translation: he's a welfare queen, paying at most 15% on money he DID NOT EARN) for playing a game that hurts Americans who work for a living.
His point is to make a quick buck at the expense of future profits (Apple would need to borrow more or pay taxes on money it brought back into the country) and therefore future investors. This is the same tired Wall Street attitude that's been destroying the US for the last 30+ years. This guy would turn Apple into the next Enron, jacking up share prices while gutting the real value of the company. He would of course be shorting the stock well before the bad news became public.
By the way, Apple isn't undervalued just because other tech companies are over valued!
Can you imagine if what happened to the BlackBerry had happened to the iPhone? Or if the #bendgate thing had actually been widespread? SERIOUS, SERIOUS problem.
People seem to forget this. Having cash on hand is damned important, and many companies get screwed when they run on reserves/cashflow/debt.
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This is my very favorite post from this thread
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Unfortunately he's only 77. Looks like crap for his age, though. *Fingers crossed*
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No they don't.
Listen, I get it, ok? If you are an investor, and you follow Icahn's lead, you stand to make a tidy profit on whatever you have in APPL stock.
But you do realise that it is all stock market manuevering and manipulation, of course. No actual value is being created, and the end result after all the sell offs for profit is APPL stock trading right back where it started or lower, and the market's confidence in the stock will have been damaged on the long term.
You of all people should know that this is precisely how "the greatest investor of all time" has made his billions. The guy hasn't created anything or done anything producing actual value his entire life.
Apple as a company produces actual value, real products people around the globe use to produce and create things. The only connection that a guy like Icahn, and all other career financial instrument traders for that matter, have to Apple or any other company as far as "ownership" goes, is a few 1's and 0's in a master database that gives them a legally binding piece of the Apple pie, until they decide to sell it.
"Owners" of these companies' are so completely detached from them that they have no regard whatsoever for what actually happens to them or what business they are in, or even if they will actually exist tomorrow. All that matters is the personal ROI, and in most cases these days, it is for the highest ROI in the shortest possible timeframe.
That analogy made earlier about the TV and the box of money is also ridiculous. Not accurate in the least.
First of all, "Management" would not charge $2250 for the TV, because they wouldn't set the price. You would not even be buying the "TV" from the "store", but through a broker on the open market where you pay a price you thought it was worth buying at that point in time. AND, unless you were there at the initial IPO, there is no locked box with $750 in it, and the "TV" you bought wouldn't even be brand new, but used, probably with many thousands of previous owners. Even then, since it is a free open market, there are people buying the same model TV at the fluctuating asking price every day. People are paying what the "TV" is worth to them at that given moment.
A stable, consistent buyback scheme like the one they are doing now, with moderately increased dividends over time will be a much better strategy long term for Apple the company, because it will encourage longer term rises in the stock price for the shareholder, while not artificially spiking the stock, which would inevitably have a whiplash effect that could easy do more harm to the stock value over time than good.
All of you advocating Icahn's wishes and actions are just similarly opportunistic and in it for yourselves, don't care what the long term effects could be, want to make a quick return.
Now...whether or not that is a good thing or not is another debate altogether.
Whoa whoa whoa... Who do you think you are making all types of sense in a forum?? THANK YOU.
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Too many people on these forums are quick to call this guy names and hate him because he's rich. Ever think that just MAYBE he got rich because he's smart and actually knows what he's talking about?