For all of those that bemoaned the fact that they believed Apple shares were underpriced even at 700 because it was carrying a low multiple, remember that cash has no premium.
The reality is that if money was brought back to the US the shares would likely o higher in share value. Regardless, should shareholders should actually be agnostic as to whether taxes are paid or not.
Instead, shareholders should be incensed that the "problem" still remains and the money sits idly and instead necessitated the taking of debt.
In the meantime, Apple could have undertaken any number of actions with its cash hoard, including spin offs, special dividends, acquisitions etc. It wouldn't take very much imagination to find corporate deductions that are in keeping with the spirit of the tax code and that would result in tangible benefits to shareholders, rather than subjugating them to a new class of stakeholders, those who purchased bonds.
What you and many others neglect is the actual drag that cash has on share price. Cash typically carries a very low multiple, especially when it sits dormant. When everyone was clamoring for Apple's share price to go higher because it was carrying a low P/E what they were neglecting to realize was that its P/E was low because of all of the idle cash.
There was a nice article a few months ago that discusses the paradox of having too much cash http://nyti.ms/13lLjbv
This move did nothing to address their issue. Instead they took on debt at a time that there is concern about decreasing revenues and the activists will be back, still eying the cash hoard. In the meantime, shareholders have been subjugated to bondholders.
Part of the paradox is that for shareholders if Apple pays its taxes upon repatriation there really would be little downside to share price, in fact, it might paradoxically increase if Apple were then freed to put it to work in meaningful ways, including special dividends, spin-offs etc..
Street ball? That's the difference between East and West. Is that the west coast version of stick ball? Something else Walter O'Malley stole from Brooklyn.
On days like today, the East coast is spectacular, but unfortunately the past week has probably given us our quota for the year. I think I'm willing to take fires, earthquakes, mudslides, drive-bys and other assorted natural and non-natural disasters for a few more of those perfect weather days.
Unfortunately, Newport Beach was actually a much better bargain just 4 months ago that it is right now, but we're still 12-24 months away from making the final move.
I do agree that at these levels and especially if you're not one to get apoplectic if prices gyrate wildly, Apple can be a cash cow both in terms of sales revenue and in terms of spinning off dividend income to investors. Ultimately, Apple is a good example of how much more healthy it is to see shares appreciate slowly, taking 3 steps forward and maybe two steps backward as opposed to a straight line higher and a straight line lower.
By reports the demand was 3 to 1. That certainly is a sign of confidence and is one of the reasons that I suggested that Apple should be congratulated.
It is, however, also a sign, particularly based on the incredible demand from Europe that there is a great deal of desire to look for alternate investments that offer some degree of safety.
The mere presence of $150 B makes the company rock solid even if the brand may lose a little luster temporarily.
However, the interests of bond and stock holders aren't always aligned. If cash flow from operations falters and there is still reluctance to move overseas cash back to the US, shareholders may be more likely to feel the initial downside, including the risk of the dividend being cut.
Likely? Not very, but still part of the new equation now that Apple has sold bonds and taken on the obligation of interest payments in what may become a changing cash flow environment.
With so many people reflexively spouting "fiduciary responsibility" I somewhat amazed that they don't see the parking of cash offshore, essentially sitting dormant as being anything other than a lapse of fiduciary responsibility, even if they can't perceive the concept of corporate "social responsibility."
You are right in that there's really not much the cash can do beyond what a local economy can absorb. In essence it becomes a game of wills. The CEO knows that the money has to stay in suspended animation, but they would rather do that and lose most utility of the funds, than to put the money to work back home and pay a small tax.
And yes, the tax would be small if the money was put to some meaningful use, as they could they use what so many others are erroneously referring to as "loopholes" in the tax code by exercising their right well defined tax credits associated with R&D, acquisitions, certain spin-offs, expansion etc..
It's hard to take you or others very seriously, or to even get beyond the first few words when you equate items like deductions, which are clearly specified in the tax code, with loopholes.
Then to try and remind me that all deductions are loopholes is suggestive of someone who is either very poorly informed or is reaching very, very hard to make a very, very tenuous argument.
For your own education:
"A loophole is an ambiguity in a system, such as a law or security, which can be used to circumvent or otherwise avoid the intent, implied or explicitly stated, of the system. Loopholes are searched for and used strategically in a variety of circumstances, including taxes, elections, politics, the criminal justice system, or in breaches of security."
Please tell me which of the explicitly mentioned deductions in our tax code is a loophole.
You can spare yourself the dilemmas by doing the opposite of whatever thoughts or ideas you may have. Or you could just select to use standardized definitions and not provisionally unique ones that fulfill your specific needs to back up faux logic
My wife used to live in Newport Beach and worked in Laguna. She still can't believe she left that behind. Every single time we drove from Newport to Laguna or back, she said "Do you see why I didn't want to leave this behind?"
Every single time.
I'm not certain, but when returned to a restaurant in Laguna about 30 years after we were last there, I think we had the same bus boy.
He was more of a bus man or bus senior at this point, although I think the same may have happened to me, as well.
Which article are you referring to? I guess you don't have to be told to feel free and project away on any tangent you would like.
Did I mention anything about boycotting Apple products? DId I suggest that anyone's products were superior or a greater value? Did I call for any action at all other than it being my intention to re-purchase recently assigned shares? That intention alone might imply that I would be a proponent of greater Apple sales and revenues.
However, if Apple were to bring money home and put it to work here, rather than sitting dormant in overseas accounts, it would certainly spur a new wave of "Buy American" feelings. Instead, it may be engendering public distaste for its actions, which could lead to people deciding to go elsewhere for their consumer products..
Eric, my wife is a LA native. Valley Girl, no less. She's been exiled on the east coast for 30 years.
We just got back from a couple of weeks in Newport Beach, where we're likely to move in about 2 years.
The problem is the sports. I just couldn't see myself getting excited about any of it. Even Home Shopping Network seemed to be covering the Kobe injury. But at least the market is closed by 1 PM and the rest of the day awaits, leaving plenty of time to shovel the snow.
I tell people that if you grew up in the Broinx, your dream was to move to Westchester or Queens.
Queens people dreamed of Long Island. Brookly? Staten Island, And Staten Island, NJ.
How did you ever get there directly?
Used to live in Queens when first married, but always a Mets fan even from Bronx days which caused me to get beat up incessantly and probably disrupted the sarcastometer.
No, it's not taxed again. It's taxed up to the US limit which takes into account taxes levied by other jurisdictions. In fact, certain fair tax jurisdictions, such as Australia and the UK, are quite straightforward.
For multi-nationals there are many mechanisms to shift costs to higher tax nations and revenues to lower tax nations.
Those strategies were clearly not the intent of the US Tax Code and are detrimental to all of us.
Do I blame Apple and others? No, that's precisely why I said that congratulations are in order. However, there is just something inherently wrong about manipulating a system and essentially spreading the burden of tax shortfall to others.
Well, JD in NJ, at least you confirm for me, why when growing up in The Bronx, we were justified in looking down upon some segments of the NJ population.
Is it really a stereotype if it's accurate?
Although, out of curiosity, I'd like to read your hyperbole powered point of view.
Shame On You, Apple [View article]
http://nyti.ms/13lLjbv
For all of those that bemoaned the fact that they believed Apple shares were underpriced even at 700 because it was carrying a low multiple, remember that cash has no premium.
The reality is that if money was brought back to the US the shares would likely o higher in share value. Regardless, should shareholders should actually be agnostic as to whether taxes are paid or not.
Instead, shareholders should be incensed that the "problem" still remains and the money sits idly and instead necessitated the taking of debt.
In the meantime, Apple could have undertaken any number of actions with its cash hoard, including spin offs, special dividends, acquisitions etc. It wouldn't take very much imagination to find corporate deductions that are in keeping with the spirit of the tax code and that would result in tangible benefits to shareholders, rather than subjugating them to a new class of stakeholders, those who purchased bonds.
Shame On You, Apple [View article]
There was a nice article a few months ago that discusses the paradox of having too much cash http://nyti.ms/13lLjbv
This move did nothing to address their issue. Instead they took on debt at a time that there is concern about decreasing revenues and the activists will be back, still eying the cash hoard. In the meantime, shareholders have been subjugated to bondholders.
Part of the paradox is that for shareholders if Apple pays its taxes upon repatriation there really would be little downside to share price, in fact, it might paradoxically increase if Apple were then freed to put it to work in meaningful ways, including special dividends, spin-offs etc..
Shame On You, Apple [View article]
On days like today, the East coast is spectacular, but unfortunately the past week has probably given us our quota for the year. I think I'm willing to take fires, earthquakes, mudslides, drive-bys and other assorted natural and non-natural disasters for a few more of those perfect weather days.
Unfortunately, Newport Beach was actually a much better bargain just 4 months ago that it is right now, but we're still 12-24 months away from making the final move.
I do agree that at these levels and especially if you're not one to get apoplectic if prices gyrate wildly, Apple can be a cash cow both in terms of sales revenue and in terms of spinning off dividend income to investors. Ultimately, Apple is a good example of how much more healthy it is to see shares appreciate slowly, taking 3 steps forward and maybe two steps backward as opposed to a straight line higher and a straight line lower.
Shame On You, Apple [View article]
It is, however, also a sign, particularly based on the incredible demand from Europe that there is a great deal of desire to look for alternate investments that offer some degree of safety.
The mere presence of $150 B makes the company rock solid even if the brand may lose a little luster temporarily.
However, the interests of bond and stock holders aren't always aligned. If cash flow from operations falters and there is still reluctance to move overseas cash back to the US, shareholders may be more likely to feel the initial downside, including the risk of the dividend being cut.
Likely? Not very, but still part of the new equation now that Apple has sold bonds and taken on the obligation of interest payments in what may become a changing cash flow environment.
Shame On You, Apple [View article]
You are right in that there's really not much the cash can do beyond what a local economy can absorb. In essence it becomes a game of wills. The CEO knows that the money has to stay in suspended animation, but they would rather do that and lose most utility of the funds, than to put the money to work back home and pay a small tax.
And yes, the tax would be small if the money was put to some meaningful use, as they could they use what so many others are erroneously referring to as "loopholes" in the tax code by exercising their right well defined tax credits associated with R&D, acquisitions, certain spin-offs, expansion etc..
Shame On You, Apple [View article]
Then to try and remind me that all deductions are loopholes is suggestive of someone who is either very poorly informed or is reaching very, very hard to make a very, very tenuous argument.
For your own education:
"A loophole is an ambiguity in a system, such as a law or security, which can be used to circumvent or otherwise avoid the intent, implied or explicitly stated, of the system. Loopholes are searched for and used strategically in a variety of circumstances, including taxes, elections, politics, the criminal justice system, or in breaches of security."
Please tell me which of the explicitly mentioned deductions in our tax code is a loophole.
You can spare yourself the dilemmas by doing the opposite of whatever thoughts or ideas you may have. Or you could just select to use standardized definitions and not provisionally unique ones that fulfill your specific needs to back up faux logic
Shame On You, Apple [View article]
My wife used to live in Newport Beach and worked in Laguna. She still can't believe she left that behind. Every single time we drove from Newport to Laguna or back, she said "Do you see why I didn't want to leave this behind?"
Every single time.
I'm not certain, but when returned to a restaurant in Laguna about 30 years after we were last there, I think we had the same bus boy.
He was more of a bus man or bus senior at this point, although I think the same may have happened to me, as well.
Shame On You, Apple [View article]
Did I mention anything about boycotting Apple products? DId I suggest that anyone's products were superior or a greater value? Did I call for any action at all other than it being my intention to re-purchase recently assigned shares? That intention alone might imply that I would be a proponent of greater Apple sales and revenues.
However, if Apple were to bring money home and put it to work here, rather than sitting dormant in overseas accounts, it would certainly spur a new wave of "Buy American" feelings. Instead, it may be engendering public distaste for its actions, which could lead to people deciding to go elsewhere for their consumer products..
Shame On You, Apple [View article]
Shame On You, Apple [View article]
We just got back from a couple of weeks in Newport Beach, where we're likely to move in about 2 years.
The problem is the sports. I just couldn't see myself getting excited about any of it. Even Home Shopping Network seemed to be covering the Kobe injury. But at least the market is closed by 1 PM and the rest of the day awaits, leaving plenty of time to shovel the snow.
Wait, the was in Queens.
Shame On You, Apple [View article]
Shame On You, Apple [View article]
Queens people dreamed of Long Island. Brookly? Staten Island, And Staten Island, NJ.
How did you ever get there directly?
Used to live in Queens when first married, but always a Mets fan even from Bronx days which caused me to get beat up incessantly and probably disrupted the sarcastometer.
Shame On You, Apple [View article]
For multi-nationals there are many mechanisms to shift costs to higher tax nations and revenues to lower tax nations.
Those strategies were clearly not the intent of the US Tax Code and are detrimental to all of us.
Do I blame Apple and others? No, that's precisely why I said that congratulations are in order. However, there is just something inherently wrong about manipulating a system and essentially spreading the burden of tax shortfall to others.
Shame On You, Apple [View article]
Is it really a stereotype if it's accurate?
Although, out of curiosity, I'd like to read your hyperbole powered point of view.
Shame On You, Apple [View article]