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Sava

 
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  • Apple Does Not Have $137 Billion In Cash [View article]
    You know issuing 1 preferred for every outstanding share of common with a par value of $50 and a annual yield of 4% would not require Apple to use any cash that is currently on the balance sheet right? It would just take a small fraction of their future cash-flow. This is David Einhorn's idea and your article has absolutely to relevance to it.
    Mar 5 12:52 AM | Likes Like |Link to Comment
  • Apple Does Not Have $137 Billion In Cash [View article]
    I have a hard time imagining Seeking Alpha rejects any articles after reading this..........Yes David Einhorn must have dropped his suit against Apple once one of his young analysts pointed out to him that Apple does not really have $137 billion in cash but rather it is a mix of cash and highly liquid securities. How could he have missed it? Never mind the fact that iPrefs would literally not touch the cash hoard.

    and please....total assets are $196 billion.
    Mar 5 12:25 AM | 3 Likes Like |Link to Comment
  • Why Apple Is A Short-Term Sell Based On David Einhorn's Plan [View article]
    Thank you Illuminati Investments but in Apple's case this is entirely irrelevant. The cash is just sitting there. Do you have a plan for how they will reinvest $137 billion? Apple does not seem to. They could continue to grow as much as they might desire simply from future cash flow. More importantly to Daugherty's point, I originally said, "all things else being equal" which would include growth rates.
    Feb 28 04:22 PM | Likes Like |Link to Comment
  • Why Apple Is A Short-Term Sell Based On David Einhorn's Plan [View article]
    Daugherty,

    Thanks for the correction on #1.

    You are wrong on #2. Consider an abstract example: You have two inital investments of 1000 shares in identical companies valued at 20x earnings which are $10 per share. Each investment at the beginning of the decade is woth $200,000. Both companies grow at a 10% annual rate of the decade. If the only difference between the companies was that one paid a consistent annual 5% dividend and you reinvested that dividend at the price it was issued at, then your investment in the company with the 5% dividend would be worth more than $260,000 more than the investment without a dividend. Apple could return wealth to investors it currently isn't using and will not use in the foreseeable future by issuing preferreds.

    With regards to your third point, it is much easier to crash on secure income and buy more stock with said income than to just sit on a stock price that is detached from the economic reality of the underlying stock because the company will not reward its owners.
    Feb 27 09:00 PM | Likes Like |Link to Comment
  • Why Apple Is A Short-Term Sell Based On David Einhorn's Plan [View article]
    If the dividend or buyback required bringing cash back from over seas, he is right. The preferred he was talking about did not have a required dividend that would accrue if missed. Further, you are concerned about the ability of Apple to pay a dividend.....

    That is funny to me. It is actually laughable. Do you know how many years of 4% dividends on 1 preferred for every share outstanding Apple's current cash-pile would cover? About 73 years worth. And the preferred's would not even touch that. Apple can make any move it wants, while continuing to actually put more cash on the balance sheet. If they issued the preferreds they would still be putting billions in cash on the balance sheet every year.

    Here's the math: $137 billion divided by (.04*50*939060516) (annual return on preferred times shares outstanding) = 72.9
    Feb 27 01:54 AM | Likes Like |Link to Comment
  • Why Apple Is A Short-Term Sell Based On David Einhorn's Plan [View article]
    Almost none of what you say is incriminating. Yes dividends make EPS lower than they would be without them (on common stock or iprefs). If you are long term investor who reinvests dividends on common or preferred your investment will grow much larger over time than sans dividend all things else being equal. Do you have information on the duration of Einhorn's calls? For all you know they are two years in length. He has owned shares for over 3 years.

    The phrase "raiding the coffers" seems to refer to the cash-hoard, which would be left alone under the iPrefs scheme. It wouldn't under massive share-buybacks or a special dividend.

    Just because a stock pays out a dividend does not mean it is crippled. Right now, Apple seems like a crippled stock. iPrefs would put the pep back in Apple's step.
    Feb 27 01:18 AM | Likes Like |Link to Comment
  • Why Apple Is A Short-Term Sell Based On David Einhorn's Plan [View article]
    If "he is simply using the preferred idea as a decoy to flush out more dividend or buybacks" he would be trying to flush out things he has stated he doesn't think are effective. http://bit.ly/YyIXRd
    Feb 26 11:07 PM | Likes Like |Link to Comment
  • Why Apple Is A Short-Term Sell Based On David Einhorn's Plan [View article]
    He has owned Apple for over 3 years. He is looking out for Greenlight's interest, but based off his own presentation it is difficult to say what he is proposing would be bad for Apple. He thinks, rightly I believe, that Apple is perceived as a company that does not really care about it's shareholders. He thinks iPrefs would change that in a big way because it would be such a great reward to current shareholders. It also would not affect their current cash-hoard at all and should they want to stop paying the dividends there wouldn't be an issue.
    Feb 26 09:25 PM | Likes Like |Link to Comment
  • Why Apple Is A Short-Term Sell Based On David Einhorn's Plan [View article]
    Einhorn has publicly come out against raising the dividend or increasing share buybacks. In fact he has come out against every method of returning the cash hoard to shareholders. His preferred plan would only require a small portion of future cash flow to enact. He doesn't want Apple to have to pay large taxes to bring cash back to the US. Go read Einhorn's actual presentation before you bash the guy without even understanding him: http://bit.ly/YyIXRd

    As Albert B. said in a comment above, Apple has a shareholder perception problem. If Apple treated its shareholders like Texas Instruments or IBM have it would trade at a higher premium.
    Feb 26 08:35 PM | Likes Like |Link to Comment
  • Why Apple Is A Short-Term Sell Based On David Einhorn's Plan [View article]
    "Einhorn is trying to make a quick buck?" - Einhorn has own Apple for more than 3 years. He has already made over $78 million in realized gains on it. He sold some of his position near the top and has bought more since the price has gone down. If Apple were perceived as a company that wants to reward its shareholders, he probably never would have sold any shares.
    Feb 26 08:29 PM | Likes Like |Link to Comment
  • Apple (AAPL) has withdrawn proposal #2, preferred stock shareholder voting requirement and all, in response to the injunction placed earlier today at Greenlight Capital/David Einhorn's request. Apple: "We are disappointed with the court’s ruling. Proposal #2 is part of our efforts to further enhance corporate governance and serve our shareholders’ best interests." Greenlight on the injunction: "This is a significant win for all Apple shareholders and for good corporate governance." (court ruling[View news story]
    I am so fed up at the way the media has handled Einhorn and Apple. It is ridiculous. I'm going to go write an article about it.
    Feb 23 03:09 PM | 2 Likes Like |Link to Comment
  • Why Apple Will Continue To Climb [View article]
    Some errors in your article. You refer to David Einhorn as Mark Einhorn. Also, his lawsuit is not "claiming that Apple needs to distribute some of the $137 billion or so of its cash on hand to investors," it claims Apple needs to unbundle the items set forth in proposal 2 for its upcoming shareholder vote in order to be in compliance with SEC rules, a fact that even people who disagree with his preferred shares idea recognize as accurate.
    Feb 11 01:31 PM | Likes Like |Link to Comment
  • Nasdaq OMX Lacks Sustainable High Returns [View article]
    First, thank you for the compliment.

    So basically you think we are beginning an equity bull-market and bond bear market? I think you are right that near term that would help them. Long-term it might bring out more competitors more quickly. I would rather not hinge my investing success on timing that switch, but I agree with you, just not sure when it will happen (maybe it already is, but that isn't reflected in NDAQ's 2012 financial statements).
    Jan 15 05:04 AM | Likes Like |Link to Comment
  • StealthGas: Hungry For A Buyback [View article]
    Or start paying a dividend.
    Nov 8 04:44 PM | Likes Like |Link to Comment
  • StealthGas: Hungry For A Buyback [View article]
    I for a long time was a believer in this net asset value/book value argument, but I am not totally anymore. It would be more clear cut if LPG carriers were a very liquid market, but its very illiquid. I don't think, that the book value will ever be realized because cash-flow is ultimately a more important measure of worth if there is never any prospect of a buy-out or massive asset sales. As it makes economic sense to sale the oldest vessels, the newest non-depreciated ships that make up the majority of the fleet value just produce cash flow and are probably never going to be sold (and if you tried to sell them, good luck selling them at full price). Unless the chartering market globally continues to improve (more people start using LPG products) which should happen gradually, the fundamentals really don't support a stock value above $8-$10.
    Nov 7 03:10 PM | Likes Like |Link to Comment
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