It has nothing to do with supply and demand. Reducing the number of shares outstanding raises the EPS.
A 0.5% holding in AAPL may get you dinner with Tim Cook, but it doesn't give you any leverage.
It's because you haven't looked. Example A: Dell shareholders.
So you're saying it has nothing to do with supply and demand, since price is affected because EPS is raised by... reducing the share supply. Okey doke.
I just figured it would be easier to explain using concepts that most people are already familiar with.
One would hope. But in that case, I'd think he wouldn't need to have dinner with Icahn to discuss this topic in the first place.
Making a profit is not the issue. How he is doing this is in question And the ethics of it all. Asking the CEO of a company for what is basically insider information is not really the right thing to do.
I'm not against making a profit, but manipulating the price as this guy has is something I don't like. You can either destroy the market price Apple has or make one.
Depending on your goal you can deal a hard blow on anyone using the stock market. Lets assume that Icahn would have stated that Apple is overvalued... market reacts to one phrase and bam.
That's what I'm against. Price manipulation and this dude has done it so seemingly simple people aren't noticing or refuse to take notice.
I said long term and for the company. Is Dell as a company doing better or worse since he got involved.
So you're saying it has nothing to do with supply and demand, since price is affected because EPS is raised by... reducing the share supply. Okey doke.
I just figured it would be easier to explain using concepts that most people are already familiar with.
One would hope. But in that case, I'd think he wouldn't need to have dinner with Icahn to discuss this topic in the first place.
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Since you're the second guy to say this, I doubted myself for a moment and did a Google search. I hope those sites I came up with aren't all wrong because they all agree.
Does anyone else think that the picture of Carl Icahn gives him a sort of retarded look? I look at it and all I see is Ben Stiller in Simple Jack.
Huh ? How is he asking Apple to raise the price ?
A lot of seemingly simple people certainly have noticed something. The problem is, they're wrong.
How is this not market manipulation?
You'd be surprised to know the last time things went the way investors like, we get stuff like the 2008 market crash. Too much fake money in the market.
That isn't exactly what I was saying. Sure you can invent a supply and demand model for the stock market but it's an unconventional one, since the supply of stock is essentially fixed. More current stockholders will be induced to sell if the price goes up, but companies don't make more stock to satisfy an increased demand. Nor do they buy back shares for the purpose of constraining supply; they do it to concentrate earnings. The factors that cause investors to be buyers and sellers is what they forecast for future earnings per share, so this is why investors like stock buybacks.
The shareholders will get a much better deal because of Icahn's involvement. You know, you could inform yourself of these things before making broad accusations.
The shareholders will get a much better deal because of Icahn's involvement. You know, you could inform yourself of these things before making broad accusations.
It's not exactly what you were saying, but it's a perfectly valid way to look at it. No need for anyone to strain themselves inventing an unconventional model; it's still the same undergrad micro 101 model as for any other liquid asset. You've got a downward-sloping demand curve (which accounts for EPS) and an upward-sloping supply curve (in this case, vertical), with a buyback shifting the supply curve left.
I've no problem with stock buybacks as a concept, but I'm not entirely sure I trust Carl Icahn to have long-term Apple investors' interests in mind.
It might be valid if it wasn't being used to describe the effect of buying back shares, since the available supply of shares at any given moment is dependent on the willingness of sellers to sell, not the total number of shares owned. I think it's useful to keep the ultimate purpose of buybacks clear.
You are dodging the question. I asked if Dell the company was in better shape after Icahn (not the shareholders). The shareholders will get a better deal in the short run but what was his affect on the company Dell (i.e. accelerating it towards oblivion) ?
As an Apple user I care about long term prosperity of the platform, not short term gains for shareholders or the thickness of Icahn's wallet if it happens to be a conflicting goal.
How is this not insider trading/information? He has a total conflict of interest.
Apple is a business and it is their job to increase the value of that business. If Icahn's proposal increases the value of Apple then it's good. It's "funny" how the discussion on this forum never actually talks about whether the proposed capital structure changes will be better for the shareholders, but usually centers around the irrelevant ramblings of Apple apologists and non sequiturs.
It might be valid if it wasn't being used to describe the effect of buying back shares, since the available supply of shares at any given moment is dependent on the willingness of sellers to sell, not the total number of shares owned. I think it's useful to keep the ultimate purpose of buybacks clear.
You'd be surprised to know the last time things went the way investors like, we get stuff like the 2008 market crash. Too much fake money in the market.