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Apple (AAPL +1.5%) has shot higher in afternoon trading. Rumors about a special dividend appear...
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Monday, March 11, 3:54 PM ETApple (AAPL +1.5%) has shot higher in afternoon trading. Rumors about a special dividend appear to be the trigger. (earlier: I, II)
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1. Increase the quarterly dividend 50% to $4.00/share.
2. Split the stock shares 10:1 to allow for an increase in
the number of investors who can afford to buy 100 shares.
3. Announce a New Buy Back of $100 Million worth of shares to
effect immediately upon the successful conclusion of the
previous Share Buy Back. ~220,000 sahres.
You shouldn't want Apple to just do anything ASAP, i'd rather they took their time and make a good judgement rather than do something quickly just to please some disgruntled investors which might have long term bad effects.
Whether or not Apple increases its dividend sooner or later doesn't matter in the grand scheme of things.
If the shares seem low to you, you either 1. came late to the party 2. are a trader 3. should buy more shares now.
Since Apple management knows best what their business plans are for the future, if you are annoyed with them you should: 1. write a letter 2. vote your proxy 3. sell your shares of AAPL.
In investing, sometimes patience is a virtue.
They've been ruminating on this for months! For example, it was last September that it was leaked that they had approached bankers to look into a 10-1 stock split.
It was a year ago next Monday that they announced a dividend and stock buyback so not long to wait now.
Look at the day chart, you'll see a 1 million share spike after the close.
Edited: Just checked again. E-Trade is showing a huge trade after the close, but I can't find it showing up anywhere else. Either E-Trade data is messed up or it was an execution within E-Trade.
I have a feeling someone is getting some priveleged treatment. And it's not me.
I've tossed out the idea that it was a data glitch. I'm in the 'someone is getting some special treatment'.
I've seen that happen with some ETFs I've traded. Sudden blips of large volume before or after market, well under last quote and then a return to normal. I would like it if a broker would scratch my back like that one day.
Just increase regular div is better for share holders.
But iPhone business has continue to deteriate and APPL is going to have a very difficult april to june quarter
I like the way you think.
Just like what needs to happen to Apple for stealing then repackaging as their own many of the "innovations" that they sold at hyper-inflated prices.
The following quote from Anthony Wing Kosner's article titled "Napster Was the Hawk and Apple the Opportunistic Eagle" [Forbes. November 30, 2011) aptly describes Apple's means to an end:
"The eagle, [Ben] Franklin points out, is ‘a bird of bad moral character. He does not get his living honestly. . . . He watches the labor of the fishing hawk; and when that diligent bird has at length taken a fish, and is bearing it to his nest for the support of his mate and young ones, the bald eagle pursues him, and takes it from him.’ Truly, a one-per-cent kind of bird."
Without Jobs around to bully the global supply chain to follow his every whim, it seems that reality has partially struck. The true genius of Apple has been their accounting and marketing. It's cool though, that's business and Apple and Samsung played it to the hilt.
Regards.
http://exm.nr/ZwQf9h
The point is that all that cash and liquidatable assets are attractive to corporate vultures. Allows them to borrow and to use the company's cash to pay back the lenders. Don't think it can't happen. At the least, all they need is the proxy of a large number of disgruntled stockholders plus the support of some large blocks.
Evil is forever busy !
2. What is the logic behind buying back shares? To effectively increase the PE? With a ridiculously low PE already nearly half of many huge and successful corporations, and one tenth of Amazon's--how could buybacks possibly elevate Apple's share price? Currently, the investment community is manifestly PE-blind!
3. I want to be proven wrong....Show me vast increases in share price demonstrated by other corporations--even outside of forward-looking cultural spear-tip growth-type names--consequent to buyback programs. Help me understand how it will help by pointing out successful programs that have benefited shareholders in this last 5 year period.
And a huge AAPL buyback program is theoretically ALREADY in force, and should be logically supporting the stock all through this period of sagging stock price--or AAPL's internal financial management is asleep/flat stupid.
4. Apple is the prime breakthrough innovator on the planet--it must launch an innovation in order to re-spark investor excitement. Anytime would be a good time--but sooner would definitely be better!
Anything that gets the share rising will be welcome..whether it is a special dividend or a buyback...after all the analysts who were down grading today will be rushing to upgrade tomorrow, singing the praises of Apple and the short sellers will cover and the squeeze will push it high and for once we will enter a virtuous circle which hopefully will continue as long as this irrational sell off has done. Like a broken watch the market will be right eventually.
So much for the million $12 lower!!!
Not to worry, it's down $6.50 as of 10:46, but if you want to quote the price at a different time, I'm sure you can come up with a different price.
I'm watching for money to start leaving AMZN and GOOG and hoping that money flows back into Apple.
Best option in my mind would be simply using it for R&D, if you believe in the company buy it if you think its too cheap
Alternatively, a stock buy back from AAPL will signal to the market it thinks the shares are cheap and will put a floor on the shares.
Apple sure can spare a few ten billion to do something for shareholders without jeopardizing any business outlook.
But I do strongly feel that AApl Management should not have waited this long to allow more than $250 drop in price. Many seasoned Chairmen/CEOs make it a point to "manage" the stock price to the extent possible in a legal and decent manner through appropriate action. Steve Jobs gave scant respect for stock prices in the market, but he was not right . He would have been a greater CEO had he respected the market movements.
I think Tim Cook, who is no SJ, will prove to be adept in managing the business, but in the manner of appreciation of faithful stakeholders, he is GUILTY as being charged.
Patience.
We are talking B shares on BRK, true, AAPL is no BRK. It is the most innovative (See recent Court Decision awarding AAPL $1 B as in billion in copyright infringements from SS) company in my lifetime... so chopchop, even BRK can't claim that and I am a big Warren Buffet kind of guy. Did you bother reading Warren's conversation with SJ telling him not to change anything?
i think they should do absolutely nothing and stick to their announced plan a year ago and just bring that new iPhone, maybe pay out a one off special dividend as they are pressured to do something.
the stock has an unique opportunity to shake-out all weak Longs, the last thing it now needs is to prop-up the share price, so that all who are just a few $ away from giving up are now holding on.
clean the stock, so we can have a long term , gradual uptrend for years to come.
if the stock is now being propped-up, it will go up 50 $ and end up lower.
i'd rather see the stock drop some more , shake the longs, get some shorts in there and see the price going up for the longer term.
it is absolutely frightening to hear that so many are still hanging in there, all looking for a quick fix.
Hard to believe that this came about because of a 4% shortfall in one quarters sales projections after such a knockout record.
the real reason for the drop is that the stock just ran ahead of itself, no company has achieved what Apple did, it went in 5 years from a 70 bio mkt cap to a 700 bio mkt cap and at that level people were yelling for the 1st trillion company ever, hence everybody pilled in to the stock, you want to be in stocks buy Apple, that was the message.
this is the correction is not based on numbers or company performance or company outlook, this is pure punishment for having gone up too fast with far too many people on board.
this is the much needed shake-out, the cleaning and it would be a terrible shame to intervene now artificially this process, please leave the stock alone, let it clean itself.
we will all have a much better and healthier stock, it will stabilize, push out some more Longs and then establish a nice uptrend.
this is a phenomenal company, the best we have ever seen, patience, give it time to heal.
long Apple and buy on dips and may all the mad money men get out.
If the company fundamental can continue to support the price of Apple, why is Apple trading so low?
The obvious reason is that the board and the management of Apple does not really care about shareholders of Apple.
If they really care about the shareholders, they would have acted and at least Apple would not fall all the way down to unreasonable valuation of now.
It says more about the board and the management of Apple, than how many people buying Apple.
but is not fair to blame the Management, they are running a company, the largest in the world, they also need time to adjust, this happened all in 5 years not a 100 and 3 mergers like Exxon, so give them time, the Board has not disappointed, they have kept all their promises, the only thing they have no influence over is the short term price behavior of the stock, but this sell-off , be it big , is just a correction, it's not a reversal of the fortunes of the company.
one must be insane to bet against Apple the company, but yes one can bet against the stock price for a while, that's OK, that's all part of the game.
believe me patience , the company over time will look after the stock price, it will go up and the Management will look after the cash and that will keep on pouring in.
see it this way, we are all blessed that we are able to buy the best company in the world at 430$, this is a hand out of heaven, but you have to see it to take it, by the second half of the year this will all look very different, Apple will have launched some new products, the cash comes in and the stock will be well on it's way to 500.
it is the best buy on the Board by far, i sincerely believe that, share holders will be rewarded very nicely, but it will take time.
Long Apple and adding on dips.
don't look to close at the screen, take a bit of the helicopter-view, if you held on for this long, you can also wait.
the stock is bottoming, be patient and let's also be patient with the Board, these are extremely competent people, the employ the best brains.
Thanks for the long reply.
Apple has more than 100 billion cash on hand. How much does Apple spend on its R&D and Capex? slightly more than 10 billion last year(it was the most in the last few years). In the meantime, Apple was getting more than 40 billion cash from its operation.
Any competent management or board can spare a few ten billion dollar to reward shareholders through higher dividends and share buyback and at the same time, help the share price.
It is not that Apple in great need of cash, but not having it.
My conclusion is simple. The board and the management is not shareholder friendly. I would not be surprise to see lawsuit against the board and the management about their fiduciary duties to Apple shareholders.
Though I respect contrarian's idea, from 700 to 400, the market knows better than contrarian.
i also think we have no clue of what is brewing in Apple's " think-tank", i think they have a 5 year strategy that will blow Samsung and GoogLe away, but they will not be pushed and that might come across as arrogant, but it is not, it is strategy and that will require so much cash and they have it !
Apple will dominate and develop so many different products to simplify and improve quality of life, we can't even imagine what is coming at us in the coming years, Apple will diversify, but all and this is the beauty and a super strength in affordable products, it's selling iPads and iPhones not Ferrari's, everybody can own it and afford it.
this company is so bullish, it's a question of timing, not of price.
anyway that's my view.
with all due respect, from what you have said, I feel that Apple management is not good at capital allocation at all.
How could competent management not be able to manage their cash flow to match their spending, instead, they need hold hundreds of billions in cash? I haven't seen a worse capital allocator than this.
It's not about product, or operation. It's purely capital management.
- most of the cash is off-shore to bring that back to the US at present would imply a 35% tax rate, Apple is negotiating a tax break, i am sure if they come to an agreement with the authorities a lot of that cash comes home, so far they are doing all share holders a favor not bringing that cash home.
- they are investing that cash in the most prudent and secure way, the fact is that generates low return, but i for one would rather see them be cash hoarders than risk managers.
- the cash pile has only really grown the last 3 years, they need to get to grips handling that
- as a share holder buying in to Apple's present weakness, the cash pile gives me a great level of comfort buying the stock
and what do they need for developing the products which are now in the "think-tank" , on outsourcing for R & D ( outsourcing, that's not internal ) they spent 7 bio a year, that can easily double in the coming year.
Apple is aware of the " country-risk & counter-party risks " they are running at manufacturing in China and Taiwan, for new products coming out of the " think-tank" they are unlikely to further increase their exposure in China or Taiwan, they will need to find/establish/build factories in the Philippines, India, Indonesia and the US, they will geographically have to hedge their bets, the safest is the US, but also the most expensive. that will eat away 2/3rd of the cash they have, and also of the cash that will come in, but they are likely to be the 1st trillion company in 5 / 7 years ...
sorry, i am not going to be persuaded otherwise, unless i see Management screw up and they have not, on the contrary they are handling this huge, huge company which is still expanding in a very professional way.
i will not sell this Management short, just because they refuse to prop the share price up for short term gain and long term pain.
they are not share holder unfriendly, what would you like them to have done.. shout at 700, people please don't buy the stock, this is crazy..?
nothing personal, but i am afraid we both like this company for different reasons, but hell our goal is the same. good return on the stock.
good luck, best regards.
Buffett investing into IBM says a lot about capital allocation. IBM is not only good at execution, but also good at capital allocation. On the contrary, Apple lacks of that.
IBM, similar with Apple, is having huge amount of cash offshore. So did IBM not spend money on its dividends and share buyback in the U.S.? There are many ways to utilize cash offshore. You can borrow against it, like many companies such as IBM/Microsoft, etc are doing.
Also, I don't see Apple is spending a lot on R&D or Capex, so to say it is holding 100+ billion cash for the future is simply lying.
The way I see share buyback is not to prop share price in the short term, but to realize shareholder value. Apple is simply too cheap @400 with its cash holding and cash generating ability.
what's the point if Apple's off-shore cash generates 1% and they have to borrow at 1,5% to please share holders.
but as said before, i feel they will pay a one off dividend.
i hope there will be no additional share buybacks, i do not want the "mad money men " or " hedge funds" to come back into the stock.
i am looking for a gradual but long term uptrend, it will come and it will be for the long haul.
every year 50 to 100$ on the share price and bingo in 5 @ 7 years one trillion here we come and now with just devoted share holders on board, patience , it's going to give you that nice residence on the Keys. ( and for all those believing in Samsung that's also going to provide you a nice residence just south of the Keys, called Cuba)
I believe in the company and the level of the stock is just speculation because of the analysts who they do not know how to run a business and see that apple is not just phones and tablets its a concept and an industry as many other companies make products as gadgets, even the auto industry does and advertise that they have their automobiles ready for iPhones, iPads, iPods they never say Galaxy or androids, so just think this company is far to go down or disappear,come on give me break.