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Warren Buffett Says Apple Should Buy Back Stock, Ignore Einhorn's Calls for Preferred Stock

MacRumors

macrumors bot
Original poster
Apr 12, 2001
50,441
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Barron's reports on a couple of Apple-related comments made by Berkshire Hathaway chairman Warren Buffett during a three-hour appearance on CNBC's Squawk Box show this morning. Buffett, known as America's most famous investor, suggests that Apple ignore all of the recent controversy surrounding a recent proposal from Greenlight Capital's David Einhorn to issue new dividend-paying preferred stock and instead simply continue focusing on creating value for the company's existing stock.
I would ignore him. I would run the business in such a manner as to create the most value over the next five to ten years. You can't run a business to push the stock price up on a daily basis. Berkshire has gone down 50% four times in its history. When that happens, if you've got money you buy it. You just keep working on building the value. I heard from people each time [Berkshire shares went down], saying why don't you do this or that.
Buffett suggests that increasing Apple's stock buyback would be the most prudent use of the company's cash and notes that he had previously discussed the possibility with Steve Jobs.
I don't own any Apple and I haven't, though I did talk with Steve Jobs a few years ago about what they might do with the cash. [...]

When Steve called me, I said, Is your stock cheap? He said, yes. I said, Do you have more cash than you need? He said, a little. [laughs] I said, then buy back your stock. He didn't. Now, when our stock went from $90,000 to $40,000 to $45,000, I wrote about, we wanted to buy the stock. We didn't quite manage to. But if you could buy dollar bills for 80 cents, it's a very good thing to do.
Apple last year initiated a relatively small share repurchase program primarily designed to offset the issuance of new stock as employee compensation. The program was authorized to buy back approximately $10 billion in stock over three years and accompanied a dividend program to distribute cash back to investors.

But with Apple's share price having moved from approximately $600 at the time of the program's announcement to a peak of $700 and now back down to roughly $425, many are calling for Apple to accelerate its share repurchasing plans while the stock is at its lowest levels in 15 months.

Article Link: Warren Buffett Says Apple Should Buy Back Stock, Ignore Einhorn's Calls for Preferred Stock
 

lucasfer899

macrumors 6502
Sep 23, 2012
432
2
London
And the share will go back up because of this.
If they do it at the correct pace, they'll be able to keep the share price up.
 
Comment

basesloaded190

macrumors 68030
Oct 16, 2007
2,693
5
Wisconsin
He also said that they need to make an acquisition,something like Netflix. Now that would interesting and show a sign of life from Apple.
 
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4TheLoveOfTech

macrumors 6502
Feb 27, 2013
432
0
New Lows Everyday

Apple needs to introduce something very quick in order to stop this continual slide of their stock. Everyday it seems they hit a new low including today.

Tim Cook said he was concerned about the stock price but did nothing more than say they had great stuff in the works.

Buffet is an amazing investor and Apple had all time sales increase but the market is looking for future growth and without a new product I just don't see it happening.

Google is at another all time high today for their stock and Apple is at another 52 week low today. Seems to be the norm for the last 6 months.

Not looking to invest in a tanking stock with nothing but rumors to look at for the future quarter.
 
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LagunaSol

macrumors 601
Apr 3, 2003
4,798
0
Google is at another all time high today for their stock and Apple is at another 52 week low today. Seems to be the norm for the last 6 months.

Not looking to invest in a tanking stock.

AAPL is greatly oversold and Amazon/Google's stock bubbles are filling rapidly (AMZN is insane). At some point they will pop and the smart money comes back to AAPL.

It's just a waiting game right now. We've been here before. AAPL always bounces back.
 
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Hastings101

macrumors 68020
Jun 22, 2010
2,191
893
K
He's probably a reliable source of advice considering he's one of the richest people in the world :p
 
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meboy

macrumors 6502
Apr 12, 2012
305
235
Apple will not listen. They did not before. It's unlike them.

The stock will continue to slide for the next three or more months based on investors lack of seeing any upward change for apple in the next 3-6 months or even longer.
 
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4TheLoveOfTech

macrumors 6502
Feb 27, 2013
432
0
AAPL is greatly oversold and Amazon/Google's stock bubbles are filling rapidly (AMZN is insane). At some point they will pop and the smart money comes back to AAPL.

It's just a waiting game right now. We've been here before. AAPL always bounces back.

Apple may have "been here before" but they didn't have the competition that is in the market today.
 
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meboy

macrumors 6502
Apr 12, 2012
305
235
You can still invest.
Put 10k in a broker account which will give you a good bit of margin to play with. Then short it day after day for the foreseeable future.
Then send me 10% ;)


Apple needs to introduce something very quick in order to stop this continual slide of their stock. Everyday it seems they hit a new low including today.

Tim Cook said he was concerned about the stock price but did nothing more than say they had great stuff in the works.

Buffet is an amazing investor and Apple had all time sales increase but the market is looking for future growth and without a new product I just don't see it happening.

Google is at another all time high today for their stock and Apple is at another 52 week low today. Seems to be the norm for the last 6 months.

Not looking to invest in a tanking stock with nothing but rumors to look at for the future quarter.
 
Comment

Nightarchaon

macrumors 65816
Sep 1, 2010
1,393
29
Way to drive stock up... think ill wait for it to go up again off the back of this "advice" (not stock manipulation at all , honest) and sell when it gets high again, time to dump Apple stock i think, Sony and M$ stock in the run up to new console launches are the short term place to be
 
Comment

3N16MA

macrumors 65816
Jul 23, 2009
1,011
177
Space
Apple needs to introduce something very quick in order to stop this continual slide of their stock. Everyday it seems they hit a new low including today.

Tim Cook said he was concerned about the stock price but did nothing more than say they had great stuff in the works.

Buffet is an amazing investor and Apple had all time sales increase but the market is looking for future growth and without a new product I just don't see it happening.

Google is at another all time high today for their stock and Apple is at another 52 week low today. Seems to be the norm for the last 6 months.

Not looking to invest in a tanking stock with nothing but rumors to look at for the future quarter.

Good thing you are not in charge. Your answer is to "introduce something very quick."
 
Comment

Gordy

macrumors 6502a
May 22, 2005
663
0
Bristol, UK
What most of the people moaning that apple should do this or that don't seem to realise is that Apple are not like most large companies.

The don't make stupid large purchases of other companies that just destroy value. EG Compaq, AOl, Skype etc.

They don't really care about short term stock price and in particular short term investors.

They base their entire company around making a small number great products that will fly off the shelves. It's a simple plan and has been working very well for them.
 
Comment

LagunaSol

macrumors 601
Apr 3, 2003
4,798
0
Apple may have "been here before" but they didn't have the competition that is in the market today.

Dell, Microsoft, HP, Motorola, RIM, Palm...you're right, Apple has never had to deal with competitive threats before. :rolleyes:

----------

Sony and M$ stock in the run up to new console launches are the short term place to be

New consoles are huge money losers.
 
Comment

Rogifan

macrumors Core
Nov 14, 2011
22,080
27,662
Apple needs to introduce something very quick in order to stop this continual slide of their stock. Everyday it seems they hit a new low including today.

Tim Cook said he was concerned about the stock price but did nothing more than say they had great stuff in the works.

Buffet is an amazing investor and Apple had all time sales increase but the market is looking for future growth and without a new product I just don't see it happening.

Google is at another all time high today for their stock and Apple is at another 52 week low today. Seems to be the norm for the last 6 months.

Not looking to invest in a tanking stock with nothing but rumors to look at for the future quarter.

Apple's dammed no matter what they do. Go to the watch rumor thread. Most of the comments there are sh***g all over it. Apple buys back more stock and it might pump the stock for a day and then it will come back down again when the analysts and tech media spin it as Apple being out of ideas, out of innovation and not knowing what else to do with their cash.
 
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