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Apple (AAPL -0.9%) roundup: 1) David Einhorn has scheduled a 2PM ET call to discuss his...

Apple (AAPL -0.9%) roundup: 1) David Einhorn has scheduled a 2PM ET call to discuss his preferred stock proposal (webcast). Ahead of the call, he asserts the proposal is "a lot better" than a standard dividend or buyback hike. 2) As iWatch rumors grow, AppleInsider uncovers an Apple patent for a watch with a flexible touchscreen and a spring that allows it to conform to a user's wrist. 3) AU Optronics (AUO) has reportedly resolved its iPad Mini panel yield issues, and is working on the next-gen version. It might not be a coincidence the Mini is now listed as "in stock" on Apple's site.
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Comments (19)
  • tigersam
    , contributor
    Comments (1711) | Send Message
     
    Roundup 1 is not a news. Einhorn is nothing to this stock. He is wasting his money on lawyers.
    Roundup 2. I can see iWatch and iGlasses.
    Roundup 3. I just bought mini. It is better than regular ipad.
    21 Feb 2013, 12:52 PM Reply Like
  • cshoxie
    , contributor
    Comments (280) | Send Message
     
    Wow, an I Watch spring that allows it to conform to different wrist sizes. This is great news and as a result AAPL is only down 1.25 % today. I can't wait for tomorrow's update.
    21 Feb 2013, 01:33 PM Reply Like
  • bobbobwhite
    , contributor
    Comments (1976) | Send Message
     
    The iWatch will not catch on. Too Dick Tracy. Too fashion-sensitive. I have asked many and they are not interested at this point, but that could change. However, if that is the best product Apple can now make post-Jobs, it will be all downhill from here, IMO. I do not think Cook "has it"(another Ballmer) to keep Apple on top.This from a longtime shareholder(sold 10/12) and user.
    21 Feb 2013, 01:44 PM Reply Like
  • pfbsurf
    , contributor
    Comments (142) | Send Message
     
    the nike fuelband has been a pretty popular niche item, and the iwatch would be the next gen version.

     

    Its not about a wrist tv/phone, its about connectivity to other devices and possibly the gateway product as a siri-based remote control for Itv and other aapl based home networking solutions ("siri", please turn the heat down to 66 and make me some coffee, show my day's appointments on the tv, thanks hon"
    21 Feb 2013, 03:54 PM Reply Like
  • AppleTops
    , contributor
    Comments (12) | Send Message
     
    Happy to hear AUO finally got their sh*t together. How did that slide off the rails in the first place? Ambitious design, poor vendor selection, lack of QA/QC?
    21 Feb 2013, 01:52 PM Reply Like
  • animus
    , contributor
    Comments (111) | Send Message
     
    It is time for Apple to step up and return value to investors. Vote NO on Proposal #2
    21 Feb 2013, 02:01 PM Reply Like
  • nfultz1
    , contributor
    Comments (74) | Send Message
     
    So you are in favor of shareholders not having a say in the issuing of preferred shares?

     

    Proposal 2 has nothing to do with Einhorn's proposal to issue preferred shares and everything to do with not having to get the shareholder's approval to do so. I'm not sure he really has the shareholders' best in mind.
    21 Feb 2013, 02:39 PM Reply Like
  • gensearch2
    , contributor
    Comments (1467) | Send Message
     
    animus,

     

    Could you explain the logic behind the proposal?

     

    If the shareholders are not allowed to vote on the creation of a preferred stock, why would you think that would result in the approval of a preferred stock?
    21 Feb 2013, 03:36 PM Reply Like
  • reurk
    , contributor
    Comments (33) | Send Message
     
    appl will decline to $420.00 and then start it's return to value.
    21 Feb 2013, 04:22 PM Reply Like
  • rrosey2
    , contributor
    Comments (705) | Send Message
     
    To answer Gensearch2:

     

    if Einhorn makes an offer on a leveraged buyout, he needs to, potentially, borrow a great deal of money to have it ready in case he succeeds.

     

    He can get control, issue the preferred (without going for a vote of all the stockholders); and give his share of the high-dividend preferred to the lenders, and thereby partially pay them back.

     

    The best Apple defense, right now, is to buy back a large amount of stock. Apple retains control, gets the stock at an unbelievably low cost, and will make a great profit on the stock, reaffirming its faith in itself. The issue of preferred is therefore rendered irrelevant.
    21 Feb 2013, 04:57 PM Reply Like
  • Mortonk
    , contributor
    Comments (172) | Send Message
     
    Is Einhorn also going to suggest the best technology path for Apple to take on their next new innovation...."his preferred stock proposal" .....who exactly does he think he is...get him to have a word with the Whitehouse while he's living in Walter Mitty land and maybe he could fix the US economy while he's at it.......!!!!!
    21 Feb 2013, 05:13 PM Reply Like
  • Drew9944
    , contributor
    Comments (130) | Send Message
     
    Einhorn can do an LBO of Apple by issuing $900 Apple Bonds for each share of stock. These would pay 4% interest, or $33.5 billion in interest payments per year, well below Apple's present positive cash-flow of $55 billion. These would be tax deductible to Apple, so would really only cost Apple $25 billion per year after reducing its income taxes (tax rate of 26%). And by swapping one $900 Apple Bond for each share of Apple Stock, the $10 billion dividend Apple currently pays would be eliminated. Hence buying up all of Apple after-tax, would really only cost $15 billion more per year in interest than the current dividend. And shareholders would have $900 bond paying 4% interest with the cash-flow of the issuer equal to over 2X the interest payments.
    21 Feb 2013, 06:29 PM Reply Like
  • gensearch2
    , contributor
    Comments (1467) | Send Message
     
    Einhorn can do an LBO of Apple? In your dreams.

     

    How much does Einhorn have to come up with to control 51% of Apple at what price? What price do you think the market is going to place on shares of Apple if there's an attempted buyout? It's not going to be anywhere close to where the share price is now.

     

    Just as a first guess. I would expect the market to subtract the cash out of the market cap and then give Apple a minimum forward PE of 15; a 20 PE wouldn't be unreasonable. Figure out what fair value might be for Apple for a PEG of 1.0.

     

    Einhorn has to come up with half of that.

     

    And even at that. You're assuming that shareholders would vote against a proposal for preferred shares, but investors would cough up the cash to do it? In your dreams.

     

    Do you know what the largest LBO in history has been?

     

    "At $31.1 billion of transaction value, RJR Nabisco was by far the largest leveraged buyout in history." http://bit.ly/VADRH7

     

    Give me a number how much Einhorn has to come up with to do an LBO of Apple?
    22 Feb 2013, 08:19 AM Reply Like
  • tjmxxx
    , contributor
    Comments (96) | Send Message
     
    Apple is being severely penalized for mismanagement of its 140 billion cash hoard, which is earning less than 1% interest. This is extremely frustrating as a shareholder, but frankly they deserve the punishment. Each day that they sit on this cash hoard, they are broadcasting to the world that besides being unfriendly to shareholders, they have no clue how to manage their finances. I applaud Einhorn for attempting to give that buffoon Cook, a kick in the behind!
    21 Feb 2013, 07:41 PM Reply Like
  • Skippy09
    , contributor
    Comments (1602) | Send Message
     
    iWatch is just frosting on a cake. Just a few more bucks from the ecosystem that is iOS.
    21 Feb 2013, 08:44 PM Reply Like
  • rrosey2
    , contributor
    Comments (705) | Send Message
     
    gensearch2

     

    Don't be so dismissive of the idea of a takeover. It is possible with very little stock, either by leverage or by proxy fight.

     

    F. Scott Fitzgerald said something like: "the rich (read 'billionaires') are not like you and me...".

     

    After they have one billion, they start looking for immortality. That comes in whatever guise you can name..Maybe "the biggest takeover in history".
    23 Feb 2013, 01:44 AM Reply Like
  • tigersam
    , contributor
    Comments (1711) | Send Message
     
    rrosey2:

     

    This will be trillion dollar LBO deal. Only China can afford that, no body else.
    23 Feb 2013, 06:07 AM Reply Like
  • gensearch2
    , contributor
    Comments (1467) | Send Message
     
    Einhorn trying a takeover of Apple is beyond delusions of grandeur. This would be a takeover easily in excess of $500B. A few billion here or there is no big deal, but $500B is real money.

     

    Even if he was thinking about the remote possiblity, he wouldn't be voting against having a vote to create preferred shares. The creation of bonds or preferred shares are tactics that theoretically companies use to block takeovers.
    23 Feb 2013, 08:08 AM Reply Like
  • krish banerjee
    , contributor
    Comments (6) | Send Message
     
    einhorn's winning is not going to compell apple to distribute preffered share unless they want.
    here is my suggestion to tim cook. since most of the 127 billion profit is outside the united states, use it to buy foxconn or a similar manufacuring company to be exclusively used to manufacture apple's gadget. samsung has their own factory and controls it for their manufacturung process.
    by doing this apple does not have tp pay repatriating taxes and compete with samsung
    23 Feb 2013, 07:35 AM Reply Like
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