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Carl Icahn Posts Response to Apple On Proxy Proposal for Share Buyback, Buys $500 Million More in Stock
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The stock market revolves around short term thinking, what he wants is the price to double so he can sell his stock and double his billions. He cares nothing about the company itself.
Here he goes again......
No stockholder should even acknowledge his presence until he Shaves !!
You're a greedy Corporate Bully Carl, and you aint join anywhere on this train baby.
No stockholder should even acknowledge his presence until he Shaves !!
You're a greedy Corporate Bully Carl, and you aint join anywhere on this train baby.
Reckless if he wants a decent chunk of that cash reserve to go to share buyback.
That money is better spent either buying companies that can help Apple expand their business, take a risk on a product( imagine developing the iPhone during the 90's and it failed. You probably wouldn't have Apple today), and keeping a rainy day jar.
All I have to look for an advantage of having a huge cash reserve like Apple does right now is look at what happened with GM. GM went from profitable to bankrupt in 3 years. Why? Because they didn't have the cash reserve to weather a downturn like what happened after Katrina and $3-$4 gas. It takes more than 3 years to develop new vehicles. While what happened to GM is their own fault, they didn't have time to right the ship once it began taking on water.
Apple can take the $150 billion cash reserve and survive for years while they scramble to right themselves if they hit hard times and start bleeding like they did in the 90's.
$150 Billion is nowhere near enough to build a global consumer network, for example.
Shareholder wealth is an artificial construct, and doesn't have to mean dividends. Shareholders are becoming wealthy through stock price rises. You don't need dividends at all. It's like the value of anything else - completely arbitrary and based on market psychology instead. Maybe one day people will decide gold is worthless?
Wikipedia article describes him as a ruthless corporate raider and I can see why. He has killed more than one company to up his profit and he has tried to kill more.
Steve Jobs was right when he said shareholders don't contribute.
Also, I like that picture of Icahn. He kind of looks like my 8-month old nephew.
Steve Jobs was right when he said shareholders don't contribute.
Also, I like that picture of Icahn. He kind of looks like my 8-month old nephew.
He mistakenly thinks profit is going to come easy forever. it's not. Apple will have to spend money to make money.
I read the letter and as far as I can tell it boils down to 'company is overvalued, buy back our shares to benefit shareholders!'. So basically everyone saying that Icahn is being greedy is right as far as I can tell.
Also, for all that they're blathering about the shares being overvalued, when Apple *was* higher people kept saying that it would have to come down sometime - and it did.
Sorry, for a person as wealthy as Icahn I just cannot believe that his motives are for any other reason except greed.
Yep.
Going back to GM, a few months ago someone said that GM should take the $25 billion they have in reserve right now and do a dividend or buyback(forgot which of the two). And I laughed at how short sighted that guy was. $25 billion in terms of reserves is nothing for GM. If GM started to lose money like they did back in '05-'08, they would be back in bankruptcy within 1-2 years. And to reduce that reserve even more by using it for a dividend or buyback, that would be a boneheaded business decision.
So you didn't read the letter.
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Apparently you didn't read the letter either.
Try decades not years. $150B is more money than you think. And Apple's business would need radical almost unthinkable changes to become unprofitable. iPhone sales dropping by 50% in one year wouldn't even be close to making Apple unprofitable because that would still be enough sales to make supply order changes and still be profitable. And iPhone sales aren't dropping by 50% in a year.
"Given the degree to which Apple appears undervalued to us, we almost feel that it’s a waste of time to debate the point. As we believe it to be the preeminent and most innovative consumer products company in the world, with the greatest brand, hardware, software, and services in the world, Apple has had tremendous growth to date, and we fail to see why this growth would not continue moving forward. The industry (smartphones and tablets) is expected to grow volume at a 15% compounded annual growth rate from 2013 through 2017 according to IDC. We believe Apple should continue to benefit from this secular growth, as last year, 85% of Apple’s revenues came from smartphones, tablets, and related software, services, and accessories. "
I'm pretty sure that's saying that he thinks that profit is going to come easy for quite awhile.
You know, it is possible for two people to read a block of text and have different opinions. That's what's going on here so maybe you could contribute more than 'you didn't read the letter' to this conversation.
It looks like you didn't read the same letter I did.
Go read the Carl Icahn letter. It's linked from the first post. He says he thinks profit is going to come easy. That is his mistaken thinking.
I've contributed plenty to the many, many threads on this subject. This one comes with a mandatory reading assignment, so it's fair to ask that anyone who wants to discuss Icahn's views take a few minutes to read what he is actually saying. It's possible to come to different conclusions, but some who have read the letter (or claim to) don't seem to understand what he is saying. Saying as you did that Icahn is calling Apple "overvalued" suggests you either didn't read or didn't understand, since he said nothing of the kind, but more the opposite, in fact.
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No, he did not say that at all.
But it's interesting that this so called villain is more optimistic about Apple's future then this random grouping of its so called fans.
That's if you're not spending any more to strengthen your position.
Again, there are a lot of things Apple can do to grow as a business.
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Did you even read the letter?
So, now they could make 75 bad $2B investments and still be solvent. Any company incompetent enough to do that would better serve the world by going out of business. I agree in having a cushion, but this is ridiculous.
Obviously the poster meant undervalued but typed overvalued. Anyone would understand that. Anyone who is actually trying to have a conversation that is.
How big of a cushion is appropriate for you then? Google also has over 50 billion cash, isn't that too big either? I don't see anyone blaming Google for not spending their pile of cash.