The USSR. Cuba. Communism is crap, and the countries stuck with it end up sucking for obvious reasons.
EDIT: Oh wait, just noticed your "location". Eewww.... goodbye. Sorry, the USSR fell a while ago. Good riddance.
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Carl Icahn's Stake in Apple Passes $3 Billion Amid Continued Stock Buyback Pressure
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The USSR. Cuba. Communism is crap, and the countries stuck with it end up sucking for obvious reasons.
EDIT: Oh wait, just noticed your "location". Eewww.... goodbye. Sorry, the USSR fell a while ago. Good riddance.
Because the US is adamantly against Communism and does its best to screw over said Communist countries? Is that your obvious reason?
Hey, Cuba effectively embargoes the US too. I wonder why the US doesn't take heavy losses from that (rhetorical question).
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No we aren't. You are once again showing your ignorance. Dividends/buybacks come from Apple's US cash, which has already been largely depleted by previous buybacks. As a result, they have had to borrow money to finance their more recent ones, which means paying interest to the banks which means less money available in the future, which means more borrowing, etc. Alternatively, Apple could repatriate foreign income paying huge tax bills of up to 30%. Either way, the shareholders lose badly when Apple starts throwing around more money than their US operations can support.
So it WOULD be productive to just give the money away to investors with a buyback? I don't see how a buyback solves the problem you've described. And if proline is right, which I think he is, they've gotta pay interest to do that too. Besides, dividends incur less of a tax penalty to major investors, right? And they reward long-term shareholders, not day traders.
I know it's a rhetorical question, but I simply have to point out how stupid of one it is. We're a country that is massively larger, has more people, and is gifted with resources that would have propelled any other country to where we are. It wasn't some capitalist miracle, it was a very good set of circumstances.
AAPL's projected growth goes down if they don't use the money to improve growth. Then your stock goes down. Look at the P/E of Amazon. THAT's a company with high projected growth. Then look at Apple. As much as the people here rejoice at the "Apple is selling record numbers of X" articles, they don't mean anything unless they're higher than expected. To see AAPL hit $700 again, there would have to be some concrete changes, not financial manipulation.
Or if you're a short-term investor, yeah the buyback helps. You dump your stuck at the peak and leave. I sold mine at $570 after all that hype about a buyback pushed it up, and I'd go back in if it weren't for my discovery of a more stable strategy.
You're close, but not quite there. Icahn isn't going to make his money from the increase in profit per share resulting from the buyback. That would take too much time and commitment. Rather, the day the buyback is announced share price will shoot up in anticipation, likely overshooting the true increase in revenue per share. It is at that instant that he will sell and make his money. This approach gives him a big return over the course of a very short period of time. Of course everyone else will be left with a company with mounting debts and eventually crippling interest payments, but this is of no concern to a short-term thinker like Icahn.
I wonder if that would work on Google.
1. Get donations from YouTube users to buy a big chunk of Google.
2. Make Google worth less somehow, or decrease its shares with a buyback.
3. Gain enough influence to reward those donors by deleting Google+ forever.
4. Pay back the donors whatever their stock is worth.
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Same with Russia and the earlier China. We know how that went. Or do you think you'd still have that shiny new MacBook Pro in a country where the government makes all the laptops? Well, maybe if you buy one from America... or one of those capitalist countries that don't have tons of people and resources (say Germany or anything else in western Europe).
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And I can't believe that somebody actually sided with a billionaire in a post above...
Typical. I applaud you for at least being honest about your prejudice. I tend to evaluate ideas on their merit rather than who is manning the loudspeaker, however.
No, it isn't. It's not a question of money because Apple has had a growing cash position for years. They just haven't thought it worth it.
Ownership of a business = roulette? Uhh..ok.
I'd rather a company run lean, return cash to the shareholder that they can't invest at a suitable ROI, and then liquidate if they are no longer successful in the market rather than holding onto cash earning 0% for years and then burning through all of it clinging to optimism.
so many shootings in the US every year and none to target this cockroach
Classy.
Hilarious. Who do you think elects the Board?
This is the problem with having too much cash - it starts to burn a hole in the pockets of management. I don't want Apple to spend my money (yes, mine) building a jet just because they have the money.
Because it's the shareholders' money and Apple has more than they can use. That's it. When I purchase $550 of Apple I want to buy part of a great technology company, not $350 of a great company and $200 in cash.
They already do. And the cash still grows...
Growth at Apple died with Steve. Cook's collaborative mediocrity does not foster growth. Dividends and buybacks are the only return now without cashing out.
If you can't see how borrowing cash with interest will make you lose long term, there is nothing more to talk about. Apple simply doesn't have the US cash to pay for any further increases in dividends/buybacks.
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Nope, you've been trolled. That's what MacRumors is about these days.
It does have the U.S. cash to do it, but that doesn't mean it would be a wise move. There's nothing wrong with Icahn's (now lower) proposal, on paper, but AAPL management knows where it wants to go and what it might need. Icahn doesn't. I'm with AAPL.
It doesn't need to be a "growth stock" to be at a much better P/E than it currently has. The S&P average is 15. Apple is below that, and is clearly a better company than 90% of the other S&P companies.
That's not totally accurate, as you can see if you look at AAPL during and after Steve Jobs... it hit the $700 mark with lower earnings than it has now well after his death. Though probably because of his plans he left behind.
If growth is dead at Apple, it's because they're giving away their money or letting it sit instead of using it for growth. It doesn't take Steve Jobs to make a company with some monopoly power such as Apple grow. If Microsoft was in this position, oh my.
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Well, you mean that they aren't, but they could be.
Microsoft pulled incredible growth over 10 years despite making nothing new during that time. Not by good products but by better business management. Apple should be way ahead of where it is right now.
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Check the P/E ratio; it's nothing to laugh at.
So you don't like Tim Cook? Good, me neither. But I don't see what was wrong with Steve Jobs.
That is the most classic example of a logical fallacy. Like, it could be in a textbook under "false analogy" or simply "A => B means B => A". Plus you contradict what you said earlier. Oh, and the stock market is not a gamble.
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And you already know this, but it's not actually "money" until the shares are sold.
The nuance here that the MR peanut gallery exaggerates, but that you seem to completely sidestep - is that Icahn is not likely in this for the long term. Just as there may have been stock price benefits with all his tweeting today, there will be consequences when he goes to cash in on the raised share price after his proposed buy-back.
I am a shareholder, and I have made money from AAPL. But I do not support Icahn's motives of making money - at least, not in the way that he proposes. The value of my shares tripled long before any dividend or buy-back program, and I'm fine with that. Icahn wants to profit, at the possible expense of others - perhaps many of us. Not interested. He has no fiduciary responsibilities to me like the Apple Board does, and if Apple is damaged after he is liquidated, I'm sure he could care less. So, while his motives are understandable and completely legal - surely you can comprehend why I distrust his manipulative behavior, to the extent that it may impact me outside of my best interests.
As to the scale of Apple's cash hoard, you are totally correct that I (and most people) can't even begin to fathom it. But I also can't fathom what Apple could do in the next 20 years. When it comes to Mars, iColony has a nice ring to it, actually.