Seeking Alpha
View as an RSS Feed

Robert McDonald  

View Robert McDonald's Comments BY TICKER:
Latest  |  Highest rated
  • What Will Apple Do With Its $81.6 Billion Cash Stockpile? [View article]
    Apple has no need for Netflix. It is a slam dunk to build the same capability into their new iCloud at a much cheaper price. They will enable an even stickier ecosystem in the process and provide a new business area that will couple nicely with the new Apple entertainment/HDTV system that is inevitable. As I keep saying sell Netflix before it drops further and buy Apple.
    Oct 18, 2011. 09:59 PM | Likes Like |Link to Comment
  • After Hours: Going Long Intuitive Surgical, Short On Apple [View article]
    Anybody who is recommending shorting Apple at this juncture just wiped out any credibility they might have had otherwise.
    Oct 18, 2011. 09:47 PM | Likes Like |Link to Comment
  • Earnings Disappoint, But Apple Adds $5 Billion To Its Coffers [View article]
    I am suggesting a dividend of about $0.25 quarterly which is equivalent to $1 yearly. I know many would see this as a low ball number but it breaks the no dividend at all barrier and the company will be seen as more mature by some..
    Oct 18, 2011. 07:19 PM | Likes Like |Link to Comment
  • What Will Apple Do With Its $81.6 Billion Cash Stockpile? [View article]
    I have no problem with Apple keeping most of its cash. They have lots of high return investment opportunities in which to put the cash to work. This includes supply chain lock-ins as they have so successfully done (blocked the competition in more than one way), new products like the HDTV home entertainment center and the addition of a movie streaming business which would not only add revenue but increase the stickiness of their overall ecosystem.

    I do not think they will do large scale acquisitions, nor should they, but a few strategic start up or small company investments, including outright purchases, may be in order. It is hard to grow all of your own seed corn and some outside innovators advancing the mobile web and other Apple business areas could produce some valuable enhancements or new products. Given the recent loss of Steve Jobs, one of the world's greatest innovators, this strategy may be much more important now.

    A $1/share dividend, or something like this, is a good idea at this point and is not out of line where companies like Intel, Oracle and Microsoft started paying dividends. Given that Apple has about a billion shares outstanding this would only amount to a billion dollars, or a little over 1% of the current liquid asset holdings. Even in a severe business slump this amount of spending will still be below the noise level.

    This same comment was also published here:
    http://bit.ly/n2bzFz
    Oct 18, 2011. 07:13 PM | 1 Like Like |Link to Comment
  • Earnings Disappoint, But Apple Adds $5 Billion To Its Coffers [View article]
    I have no problem with Apple keeping most of its cash. They have lots of high return investment opportunities in which to put the cash to work. This includes supply chain lock-ins as they have so successfully done (blocked the competition in more than one way), new products like the HDTV home entertainment center and the addition of a movie streaming business which would not only add revenue but increase the stickiness of their overall ecosystem.

    I do not think they will do large scale acquisitions, nor should they, but a few strategic start up or small company investments, including outright purchases, may be in order. It is hard to grow all of your own seed corn and some outside innovators advancing the mobile web and other Apple business areas could produce some valuable enhancements or new products. Given the recent loss of Steve Jobs, one of the worlds greatest innovators, this strategy may be much more important now.

    A $1/share dividend, or something like this, is a good idea at this point and is not out of line where companies like Intel, Oracle and Microsoft started paying dividends. Given that Apple has about a billion shares outstanding this would only amount to a billion dollars, or a little over 1% of the current liquid asset holdings. Even in a severe business slump this amount of spending will still be below the noise level.
    Oct 18, 2011. 07:07 PM | Likes Like |Link to Comment
  • Yahoo Set In Earnings-Driven Pattern That Favors Shorts [View article]
    Your comments are ignorant of the Yahoo acquisition activity that is in progress. This will dominate Yahoo's stock performance in the near term vs. historical post earnings data. If you are going to make judgments about a company's stock performance you cannot hope to be very accurate if you ignore real time business activity and trends. Articles without appropriate homework just become one more misleading talking head article with limited merit. We see way too many of these go by everyday.
    Oct 18, 2011. 02:00 PM | 1 Like Like |Link to Comment
  • Alibaba's Jack Ma Starts Yahoo Bidding At $20 Billion [View article]
    Jack Ma's posturing here is real and there is every reason to believe that a bid is on the way. Alibaba and other China internet players are gradually buying footholds in the U.S. and there are many Chinese investors looking for more reliable places to put their money.

    Alibaba has a very functional business presence selling Chinese products worldwide and the addition of Yahoo will enable them to expand their core businesses while also entering ones using the Yahoo resource and web presence. Alibaba has the management skills sorely lacking in earlier management teams to identify and successfully implement new businesses areas for Yahoo while improving existing ones. The product of the merger will make better use of Yahoo talent, resources and existing web presence and finally put an end to the negative trajectory.

    Jack Ma and Alibaba have been chaffing at the bit with the Yahoo 40% ownership and want to end the situation. A Yahoo takeover will improve Alibaba's worldwide positioning and deal with the 40% problem all at the same time.

    Jerry Yang's earlier attempts to turn Yahoo around led to failure and Carol Bartz as the new CEO. Anyone financing his takeout effort would not be a good investor. His inability to keep Alibaba from secretly spinning off Alipay by using his position on the Alibaba board to prevent it is just one more example of a problem . Of course he did get some help in that disasterous loss for Yahoo from Carol Bartz who was also on the Alibaba board at the same time.

    Microsoft might be the wild card. They have the bucks but do they have the desire to own Yahoo at this point?

    Due disclosure: Added a position in Yahoo yesterday and have been a long term holder of Alibaba.
    Oct 18, 2011. 10:31 AM | Likes Like |Link to Comment
  • Short Yahoo On Acquisition Rumors [View article]
    There are several types of acquisition targets and binning them as if they are all the same is not a relevant analysis method.

    As examples of different types pf acquisitions there is TDC which have been rumored as an acquisition target for Oracle and HPQ over the last year but for which the takeout price would be too high for realistic consideration.

    Then there is the IDCC case where there is more than one possibility under evaluation. In this case that would be patent licensing vs. company sale and the tradeoffs are currently underevaluation.

    Then there is Yahoo. The probability of a Yahoo takeout within couple of month, if not weeks, is quite high . In this case the company is being actively shopped by the BOD and has no CEO. It is more valuable to someone else who can take the good pieces and disposition the rest then its existing shareholders. There are well identified buyers who have the money to followthru including Jack Ma of Alibaba. I would submit that the long lingering Yahoo will be put out of its misery by an acquisition within weeks or months.

    Due disclosure: Just bought Yahoo shares and April 2012 at the money options. I am also holding IDCC stock and options and TDC options.
    Oct 17, 2011. 01:33 PM | Likes Like |Link to Comment
  • Apple's Momentum Is Shifting [View article]
    I think this negative article on Apple has value to the wise investor -- it is yet one more example of how far off they can be.
    Oct 15, 2011. 09:47 AM | 1 Like Like |Link to Comment
  • Apple's Momentum Is Shifting [View article]
    Apple is not a bubble stock, or a dot com stock or just a mobile networking stock. Apple is an under appreciated value stock while also being a growth stock. It is the sophisticated investors gift of a lifetime.

    All it would take to make the stock skyrocket to the plus $500 level is a split and a small dividend in order to attract a wider base of investors.

    I recommend the small dividend as they can use the remaining funds more effectively in continuous locking in their supply chain, as they have done, and in facilitating the start up of the home entertainment business.This business can be expected to make a new system that is much more substantial than the existing Apple TV module and which will be based on HDTV and a better than TIVO storage and programming control. High quality audio, internet streaming and modular upgrade capability can be taken for granted. Video will be streamed ala NETFLIX style from Apple huge server farm.

    My prediction that one should sell NETFLIX and buy Apple has turned out to be more spot on than I realized due to their recent mistakes. Apple has the ecosytem to glue in former Netflix customers.
    Oct 14, 2011. 02:33 PM | Likes Like |Link to Comment
  • Facebook Is Positioned To Take Over The World: Buy The IPO No Matter The Price [View article]
    The government infiltration of Sina's Weibo Twitter equivalent demonstrates why outsiders like Google and Facebook will never be allowed to operate "normally" in China. Home brew versions will have a favored place as they can be controlled locally. There is no way they are going to allow social network facilitation to an "Arab Spring" in China. Take a look at the following Seeking Alpha article:


    "Sina's Weibo Has Become An Essential Chinese Government Tool"

    http://bit.ly/plV8Ey
    Oct 14, 2011. 11:39 AM | Likes Like |Link to Comment
  • Google Offers Slight Edge To Shorts In Post-Earnings After-Hours Trade [View article]
    If you shorted Google before the Q3 earnings report you lost your money. Big mistake.
    Oct 13, 2011. 08:25 PM | Likes Like |Link to Comment
  • Facebook Is Positioned To Take Over The World: Buy The IPO No Matter The Price [View article]
    In addition the break out of users and user activity by age group and country would be helpful. I am sure that each demographic group will have different usage and stickiness characteristics.
    Oct 11, 2011. 11:53 PM | Likes Like |Link to Comment
  • Why Tim Cook Should Announce A Massive AAPL Share Buyback Immediately [View article]
    Stock buybacks just do not work in the tech world -- you can add HP to the list of stocks that fell dramatically after the buyback and there are others where business distress was not a major factor.

    A split and a dividend however would help the stock price enormously as it opens up stock purchase to whole new set of investors. Given the forward P/E of 10, the PEG of < 0.5 and >$80B in cash and secured investments the stock will see $600 early next year if there are no more major Eurozone, congressional or bank disasters.
    Oct 11, 2011. 11:34 AM | 3 Likes Like |Link to Comment
  • Facebook Is Positioned To Take Over The World: Buy The IPO No Matter The Price [View article]
    If the Facebook fanboys here want to do something more useful in the way of giving investment advice vs. the arm waving that is going on, I would recommend that they come back with some data on what those 800M people are really doing on Facebook with emphasis on the economic payback and user retention threats. For example how much shopping and connecting to other links are the users really doing and the utility of that activity. One also needs to know what non-Facebook web surfing users are doing in addition to their Facebook time. How sticky is the Facebook environment vs. the Apple and Google ecosystem for example

    I would attempt to find a measure of user commitment and how easily they might be moved to other web activity or social networking sites. How happy are adult users are with Facebook's features and functionality and the privacy concerns that are being raised? . How easily could users be moved to other sites. A J D Power type survey would be a good start

    Facebook and others fans should also make an attempt to understand the growing threat of parental push back for underage users. This is no small threat and if they do not know it already they soon will.

    There are no givens in the highly competitive mobile web and social networking business or in the fast moving high tech world in general. First mover status and huge user communities with limited moat protection are not sufficient to justify the flag waving that is being done here. I hope there is more to say that has not been said.

    The successful investor who makes the optimum decisions does not do so on the speculations being used in this discussion.
    Oct 11, 2011. 11:11 AM | Likes Like |Link to Comment
COMMENTS STATS
1,273 Comments
2,850 Likes