Investor Carl Icahn Dumps Apple Shares Over China Concerns

[kdarling]

I find it disappointing to hear Carl Icahn refer to Tim Cook as "doing a great job" because Icahn places zero value on the concepts that made Apple great in the first place, like engineering and innovation. I realize that Cook was caught between a rock and a hard place in dealing with someone like him, but one has to believe (IMO, at least) that there was still enough money to both meet the short-term needs of noisy shareholders (to put it as nicely as I can) and maintain proper R&D.

You're right not to worry. They're not related. Apple has plenty of money for the relatively low amount of R&D that they pay for.

As for acquisitions and stock related purchases/dividends, Apple has borrowed about $47 billion so far in the US to help cover such.

(Apple has to go into "debt" for that because they can't use the overwhelming majority of their cash hoard in the US, since most of it is kept "outside" the US. I put "outside" in quotes, because ironically their Irish shill company actually keeps almost all that money invested in US banks and Treasury notes, taken care of by a shill investment firm in Nevada.)

 

[colbertnation]

Yeah, so your perceived "mismanagement of the company" has absolutely NOTHING to do with any of Icahn's reasoning. I happen to think he's nothing more than an opportunist who is anything but genuine, but "mismanagement of the company" is not listed anywhere in his statements. Probably because that's simply not what's happening.

Yeah, so I never mentioned that Icahn said that there was mismanagement of the company.

That's great what you think and all; that's your opinion and right. Unfortunately, reality is in numbers. If you look at AAPL stock and analyze it, you'll see that investors think that AAPL's brightest days are in the past. I, among many other traders and investors, call that mismanagement.

 

[procksa49er]

Point out where Trump as ever said he would stop all trade with china. Waiting. Being spoon fed is always better than investigating, right?



I'm not even in the us or a voter and I am smart enough not to fall for the taking points from those that will lie to promote their agenda.

I'm not a trump fan but I don't fall for the moveon.org talking points either. I do think the us needs a more level playing field with china. I also do not think clinton or sanders would provide that.

You are the one that brought politics into it.

I was responding to what my reply was replying to in supporting Trump sticking it to the Chinese. He hasn't said anything about "sticking it to China on behest of Apple, or at all. But this is the same man that wants to build a million foot tall/long (exaggeration in case you missed it) wall on Mexico's dime. I am not saying I agree with the wall or not, just saying he's known for his loose tongue, regardless of the ramifications of his tongue (or actions should they come to light).

Also, China like Trump doesn't really follow the rules, and when they don't not many people stop them due to their economic weight class they've established. No matter how falsely propped up it is.

I didn't bring politics up either btw, and am done talking about them

 

[Larry-K]

Trump says he wants Apple to start making it's products in the U.S.A. perhaps Carl Icahn believes the same idea should happen. This is major major news that he has sold his interest in Apple.

And Trump knows so much about manufacturing.

I don't recall the president (Cough), being able to mandate where private industry makes anything.

 

[procksa49er]

Debt doesn't get called that way. It is due when the bonds are due, not whenever you feel like it. China can stop buying new US debt, but they will still have huge amounts of US dollars from their trade surplus and they have to put those dollars somewhere. And the US is not dependent on foreigners buying US debt because the U.S. has the ability to issue as many US dollars as it wants. Issuing more US dollars would cause inflation (but that has been low for decades) and would weaken the US dollar abroad (but the US dollar is really strong and weakening it would make the US products more competitive internationally which is not something China wants).
[doublepost=1461944183][/doublepost]

I'm not saying that. I'm liberal and believe the US government should do more for the little guy and the middle class. I'd like to see more inflation and better returns in savings banks and such. So I think we are on the same page there.

Was not aware of the exact process, but thanks (sincerely) for the lesson. Though China doesn't exactly follow all economic rules, nor are they stopped by other Global World Economies due to M.A.D (economically) fears most have about "hurting their feelings"

 

[HiRez]

Apple should move China manufacturing to U.S. and India, hit them back where it's hurts and maybe they will get the message.

I agree it would be great to see them move some manufacturing out of China. They do assemble the Mac Pro in the US, but that is a very low-volume product.

One problem with India though is, like China, they also have some very protectionist policies that are hostile to foreign businesses. They want their citizens buying phones from Indian companies and will make things tough on any foreign entity who wants to compete there.

 

[Toltepeceno]

I was responding to what my reply was replying to in supporting Trump sticking it to the Chinese. He hasn't said anything about "sticking it to China on behest of Apple, or at all. But this is the same man that wants to build a million foot tall/long (exaggeration in case you missed it) wall on Mexico's dime. I am not saying I agree with the wall or not, just saying he's known for his loose tongue, regardless of the ramifications of his tongue (or actions should they come to light).

Also, China like Trump doesn't really follow the rules, and when they don't not many people stop them due to their economic weight class they've established. No matter how falsely propped up it is.

I didn't bring politics up either btw, and am done talking about them

Yes you brought it up with trump stopping trade with china and china calling in thenus debts.

I hope he wins and builds a huge wall even on our dime then less people will be killed, held hostage, raped, etc. trying to get there to clean your toilets and pick your tomatoes. That would be far more humitarian than the status quo. The us would have to allow people there legally to do the jobs that people there are too lazy to do.

And Trump knows so much about manufacturing.

I don't recall the president (Cough), being able to mandate where private industry makes anything.

(Cough). Trade agreements are what allowed it and do you really think taxes on us companies bringing foreign made goods to where its not beneficial to do so would not work? Doing away with them certainly sent them out of the country without mandating anything. Who brought up the president mandating anything anyway?

So far its been clinton and obama signing big trade agreements and sending usbmanufacturing out of the country, I don't see the left's geriatric candidates stopping it. Sanders that has never owned a business or held a private job?

 

[spiderman0616]

Yeah, so I never mentioned that Icahn said that there was mismanagement of the company.

That's great what you think and all; that's your opinion and right. Unfortunately, reality is in numbers. If you look at AAPL stock and analyze it, you'll see that investors think that AAPL's brightest days are in the past. I, among many other traders and investors, call that mismanagement.

Yes, and you investors, as well as the hyperbolic tech media, are ridiculous with all your doom and gloom. Apple will be just fine. Stop being a child.

 

[Toltepeceno]

Yes, and you investors, as well as the hyperbolic tech media, are ridiculous with all your doom and gloom. Apple will be just fine. Stop being a child.

Apple will be just fine. They would regroup and get more competitive before they got remotely close to real problems and as a consumer that would be great.

I don't see myself wringing my hands for a billion dollar company anyway, they are a company ans I am a consumer. Competition only makes things better and if they drop they will get more competitive. They are not going anywhere, in the worst scenario they get better.

 

[SusanK]

So big bad Carl Icahn too advantage of poor little Timmy, huh?

Icahn has been around a long time. Why do you think he never took Steve on?

Get real. The problem is not investors.

 

[icehockey77]

it takes a special level of ******* to pound your fists on the table begging someone to do something, then, once they do it, sell at enormous profit and screw other shareholders.

 

[BenTrovato]

So big bad Carl Icahn too advantage of poor little Timmy, huh?

Icahn has been around a long time. Why do you think he never took Steve on?

Get real. The problem is not investors.

Haha no kidding. Plain to see.

 

[Junior117]

The companies are in business to make money and they would go private if they thought it was in their benefit.

Yes, but the main benefit for leaving is to allow them to focus on making money instead of pleasing shareholders. If shareholders just straight up don't like someone, they can vote them out.

The main goal for most shareholders is to make money off of the companies that are in the stock market, not because they care (like Icahn here). They look for short-term gains and if they can't do that, they'll either try to vote them out or try to encourage other shareholders to sell their stock.

Look at how some Facebook shareholders want an "equal vote" instead of Zuckerberg having the controlling vote. It doesn't sound like they're investing because they really truly believe in the company. Same with Dell, although, they've successfully left the market and I certainly hope they don't come back. (Now, their products are better than before. Not perfect, but they're better.)

I have always been in the position that if the CEO of a company isn't doing well, then the only ones that have a right to fire them is the Board of Directors, not the shareholders.

But like I said before, dropping out of the stock market is a bit extreme, however, unless there's a better solution to this, I think it's probably for the best.

 

[TallManNY]

Was not aware of the exact process, but thanks (sincerely) for the lesson. Though China doesn't exactly follow all economic rules, nor are they stopped by other Global World Economies due to M.A.D (economically) fears most have about "hurting their feelings"

Happy to help. Here is another way to look at it. Sometimes being the Debtor actually gives you the leverage. China has a bunch of U.S. bonds that are promises that the U.S. will in the future pay them a certain specific number of U.S. dollars. One estimate is $1.3 trillion of it. That is very valuable to China, but only as long as the U.S. dollar is strong. These bonds do not adjust for inflation. But the U.S. controls how much a U.S. dollar is worth because the U.S. has a dollar printing press. The U.S. can make those bonds worth a whole lot less if it wants to. This will hurt all the holders of U.S. debt and would destabilize the entire global economy. But it would also decrease or basically eradicate the U.S. debt.

We are in an economic M.A.D. situation with China. But our country doesn't have a dictatorship ruling party which is getting very rich while legitimately being terrified of its billion plus oppressed working class citizens. China's ruling party wants to keep the good times going for it. But their workers won't stay quiet if China hits a serious recession. Or at least that is the fear. China's memory is long and they've had peasant revolts that end up very badly for the then current rulers. They are a country with many fabulously rich people (mainly living on the coast) but also hundreds of millions (mainly living in the center of Chine) who live in abject poverty.
[doublepost=1461964648][/doublepost]

Yes, but the main benefit for leaving is to allow them to focus on making money instead of pleasing shareholders. If shareholders just straight up don't like someone, they can vote them out.

. . . .

But like I said before, dropping out of the stock market is a bit extreme, however, unless there's a better solution to this, I think it's probably for the best.

Going private isn't possible. Apple is just too large. Its market cap is $600 billion. But that is a cap just based on the current price of one share. It is the price that the small fraction of the shareholders who want to sell today match up with the buyers who want to buy today. Most of the owners of the shares do not want to sell at today's price.

To buy a controlling interest you have to offer the entire shareholder pool a high enough price that most of them agree to sell you their shares. It is called a tender offer. So when offering to buy a public company the "private entity" (lets say some private equity fund), has to make an offer to all the shareholders and that is usually significantly above what the shares are currently trading for. So to convince the market (you have to get 90% to tender their shares and that allows you to squeeze the rest out in that they have to take the price whether they want to or not), you'd have to bring something closer to a trillion dollars to the table. And that cash has to be all available to settle on the day you buy all the shares.

No private entity can amass that type of money. No bank has anything close to that amount of cash. It would take a collection of dozens of the biggest banks in the world funding that to amass that amount of cash. The banks would have to lend the private entity, so they'd have to be comfortable with a trillion dollars lent against Apple's assets. (Side note, then instead of dealing with shareholders, Apple would have to answer to a consortium of banks, which would probably be a lot worse.) Frankly no country short of the U.S. could come up with that type of cash without basically making their economy dependent on Apple.

 

[Rocketman]

Read message #289.

 

[colbertnation]

Yes, and you investors, as well as the hyperbolic tech media, are ridiculous with all your doom and gloom. Apple will be just fine. Stop being a child.

lol, I'm not sure who the child is here if you think only your opinion matters, or if you simply can't grasp how the stock market works.

Just because it is your opinion (or however many think like you, but clearly not in the majority here) that Apple as a company will be fine, etc, does not mean that its stock price cannot fluctuate in the short term to what the current investor sentiments are, especially based on the official public knowledge about the company.

 

[Apple Corps]

And Trump knows so much about manufacturing.

I don't recall the president (Cough), being able to mandate where private industry makes anything.

Cough Cough - you can't mandate where they make it but you can do a number of other things that will make them think twice about the consequences.
[doublepost=1461967444][/doublepost]

Yes, but the main benefit for leaving is to allow them to focus on making money instead of pleasing shareholders. If shareholders just straight up don't like someone, they can vote them out.

The main goal for most shareholders is to make money off of the companies that are in the stock market, not because they care (like Icahn here). They look for short-term gains and if they can't do that, they'll either try to vote them out or try to encourage other shareholders to sell their stock.

Look at how some Facebook shareholders want an "equal vote" instead of Zuckerberg having the controlling vote. It doesn't sound like they're investing because they really truly believe in the company. Same with Dell, although, they've successfully left the market and I certainly hope they don't come back. (Now, their products are better than before. Not perfect, but they're better.)

I have always been in the position that if the CEO of a company isn't doing well, then the only ones that have a right to fire them is the Board of Directors, not the shareholders.

But like I said before, dropping out of the stock market is a bit extreme, however, unless there's a better solution to this, I think it's probably for the best.

And who do you think elects the Board of Directors? Who do you think OWNS the Corporation?

SHAREHOLDERS

 

[kdarling]

And who do you think elects the Board of Directors? Who do you think OWNS the Corporation?

SHAREHOLDERS

First off, shareholders do NOT own a corporation or any part of it (unless it goes belly up, and then they might get a piece of the final sale of property). Shareholders cannot sell a part of the corporation, or use its buildings, or do anything that an actual owner of something can do.

Secondly, public corporations' director nominations are mostly controlled by the current Board of Directors. Shareholders might get a director elected, but it'd be rare indeed to get more than a couple of seats, much less take over the whole board.

 

[Larry-K]

Cough Cough - you can't mandate where they make it but you can do a number of other things that will make them think twice about the consequences.

The consequences of moving production to the U.S. would be sacrificing those fat profit margins,
something Apple will never do.

 

[macdragonfl]

Interesting taken on Tesla. I think that would be a great move. But, I don't understand your comments on Tim Cook. If Apple "depends on a visionary", why do you think "a master of inventory and production efficiency" assuming the role as CEO "was the best choice"?

I meant that Tim should go on in his old position, His skills in his old position as Chief Operating Officer, Tesla seems to need now. He was really the only person that could fill in at the time and the product schedule was set by Jobs up until recently. He was trusted and stable. It also gave time to see if Jon Ives would step up he didn't .

 

[thomasguide]

did you know they offer larger storage sizes?

Did you know it only costs them pennies for that additional 48GB and they charge $100 for it? Did you know that 16GB starter model is complete joke? So a 64GB 6s plus is $850 plus tax, meanwhile a Moto x 32GB with SD card option is $450 plus tax, Nexus 6P 64GB is $550, but mostly on sale for $475. What is the justification for that additional $400? Brand? Ecosystem? Quality? Apps? Hint, there is not much different except price.

Apple never has a sale they just stubbornly price their gadgets at obscene profits, but things are changing. We are at the breaking point. Even the mac's are just overpriced pc's, Apple doesn't make anything they just source all the parts from pc manufacturers. Realtek nic, AMD graphics, Intel CPU, Kingston memory, they just slap an Apple logo on it and mark it up 1000%. If you like OSX so much, you can throw together all the pc parts and build your own mac for half what Apple charges.
[doublepost=1461971058][/doublepost]

This.
What's the next big thing for the iPhone besides "thinner / worse battery"?
What's the roadmap for the iPad besides "treat it like a big iPhone with a pencil"? They refuse to do a proper tablet OS. Tim Cook has gone on record saying the iPad is the future of personal computing – okay, then why are you still doing Mac OS? Where are your balls to commit? Steve Jobs killed other product lines for less. I would hate if they did this, but it just goes to show they don't any direction and are afraid to commit – which is killing us slowly with mediocrity.

Wow! You really want them to dump Mac OS? For what? The playskool IOS? That is a joke right? Mac OS is about as refined and polished as it's going to get. While IOS feels like it's written for third graders to be able to use. If they need to commit to anything it's Mac OS, the ipad pro should be running that as it's OS not IOS. If they would stick a usb port on it and run Mac OS it would be a true pro computer. Right now it's just big ipad.
[doublepost=1461971296][/doublepost]

I think he has it wrong, now is the time to buy while prices are lower, this is Apple, they will rebound. And really, I don't think China is going to be that important in the long run.

Really? A billion potential clients are not that important? Who are they going to sell new products to Martians?

 

[Junior117]

Happy to help. Here is another way to look at it. Sometimes being the Debtor actually gives you the leverage. China has a bunch of U.S. bonds that are promises that the U.S. will in the future pay them a certain specific number of U.S. dollars. One estimate is $1.3 trillion of it. That is very valuable to China, but only as long as the U.S. dollar is strong. These bonds do not adjust for inflation. But the U.S. controls how much a U.S. dollar is worth because the U.S. has a dollar printing press. The U.S. can make those bonds worth a whole lot less if it wants to. This will hurt all the holders of U.S. debt and would destabilize the entire global economy. But it would also decrease or basically eradicate the U.S. debt.

We are in an economic M.A.D. situation with China. But our country doesn't have a dictatorship ruling party which is getting very rich while legitimately being terrified of its billion plus oppressed working class citizens. China's ruling party wants to keep the good times going for it. But their workers won't stay quiet if China hits a serious recession. Or at least that is the fear. China's memory is long and they've had peasant revolts that end up very badly for the then current rulers. They are a country with many fabulously rich people (mainly living on the coast) but also hundreds of millions (mainly living in the center of Chine) who live in abject poverty.
[doublepost=1461964648][/doublepost]

Going private isn't possible. Apple is just too large. Its market cap is $600 billion. But that is a cap just based on the current price of one share. It is the price that the small fraction of the shareholders who want to sell today match up with the buyers who want to buy today. Most of the owners of the shares do not want to sell at today's price.

To buy a controlling interest you have to offer the entire shareholder pool a high enough price that most of them agree to sell you their shares. It is called a tender offer. So when offering to buy a public company the "private entity" (lets say some private equity fund), has to make an offer to all the shareholders and that is usually significantly above what the shares are currently trading for. So to convince the market (you have to get 90% to tender their shares and that allows you to squeeze the rest out in that they have to take the price whether they want to or not), you'd have to bring something closer to a trillion dollars to the table. And that cash has to be all available to settle on the day you buy all the shares.

No private entity can amass that type of money. No bank has anything close to that amount of cash. It would take a collection of dozens of the biggest banks in the world funding that to amass that amount of cash. The banks would have to lend the private entity, so they'd have to be comfortable with a trillion dollars lent against Apple's assets. (Side note, then instead of dealing with shareholders, Apple would have to answer to a consortium of banks, which would probably be a lot worse.) Frankly no country short of the U.S. could come up with that type of cash without basically making their economy dependent on Apple.

Yep. You're right, and I'm aware of it. I've read (I don't remember where, but if I do find it, I'll update the post) that if Apple wants to go private, the price of about $1 trillion wouldn't be too off. So I know that it's currently paratactically impossible for that to happen. So that (among other reasons) is why I said that the idea that I'm proposing is extreme.

It's just that I'm sick of things like hostile takeovers and shareholders trying to lower the price and "pump and dumps" and other things like that. I wouldn't want that to happen as a business owner. I wouldn't want that to my company. If I were to be fired from my own Board of Directors (assuming my business has one, which it doesn't, but I'm just being hypothetical here),... well while I'd be angry, it would still be okay, because they should have the right to do that (if the company is structured to have that). However, I don't think that shareholders should be capable of doing so. And Icahn, while he can do whatever he (legally) wants, is a prime example of people who exist to do the things he's doing.

But in any case, I get what you're saying, and you're not wrong.

 

[thomasguide]

Apple will be just fine. They would regroup and get more competitive before they got remotely close to real problems and as a consumer that would be great.

I don't see myself wringing my hands for a billion dollar company anyway, they are a company ans I am a consumer. Competition only makes things better and if they drop they will get more competitive. They are not going anywhere, in the worst scenario they get better.

That's what IBM thought too and look at where they are now.

 

[Razeus]

Bought more shares today. My average price is now a tad over $98.

I'll buy more throughout the year, continuing to average down if I have to. I'm going thermonuclear on this.

 

[^^BIGMac]

Run sheep run. Sell. Sell. Sell.