- Apple's (AAPL +0.9%) software ecosystem makes its hardware business akin to a recurring revenue stream, and very different from those of fallen mobile giants such as Motorola and BlackBerry, suggests David Einhorn, once more making a bull case for the company. He backs up his argument by pointing to Apple's ~90% customer repurchase rate.
- Einhorn, who called on Apple to make a preferred stock distribution earlier this year (he backed off after the company added $50B to its buyback plan), refuses to pass judgment on Carl Icahn's call for another $150B in buybacks - "Carl’s view is not particularly important because I don’t know what Carl’s thinking" - but does say "it makes sense for Apple to maintain a very good, strong cushion, so they can continue to innovate even if the market hits a bad cycle."
- Einhorn's Greenlight Capital owned 2.4M Apple shares at the end of Q3. In his Q3 investor letter, he talked up Apple's e-commerce ops (iTunes/App Store), noting they amount to a $16B/year and growing business.
- As for Micron (MU +6.5%), which Einhorn just disclosed a position in, Einhorn says he's a fan of companies in consolidating industries, and notes "there's an enormous change going on" in the DRAM industry as it consolidates around Micron, Samsung, and SK Hynix. Others have made similar arguments.
at CNBC.com (Nov 19, 2014)