Apple (AAPL -0.7%) rises slightly as David Einhorn makes his case for a preferred stock...


Apple (AAPL -0.7%) rises slightly as David Einhorn makes his case for a preferred stock distribution (webcast). Einhorn imagines Apple issuing one or more "iPrefs" with a face value of $50 to shareholders for each common share owned. Each iPref would pay a $0.50/share quarterly dividend, and would be publicly traded. The iPrefs would yield more than Microsoft and IBM's long-term debt, and the Fed's zero interest rate policy "creates enormous demand for safe income," Einhorn argues. (live blog)

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Comments (15)
  • bobbobwhite
    , contributor
    Comments (2130) | Send Message
     
    I am much more concerned with what Apple will do to follow the phenomenal iPhone and iPad when these two products that bring in almost the entire profits of Apple become commodities in the near future. Will there be more there there or has Apple seen its best days?

     

    Cook does not impress me, as he seems to be another cookie cutter tech CEO of no specialness. Certainly no Jobs, that's for sure. This is from a long time shareholder(sold 10/12) and device user.
    21 Feb 2013, 03:09 PM Reply Like
  • XRTrader
    , contributor
    Comments (708) | Send Message
     
    Bobbobwhite - The iPad sales grew at almost 60% yoy last quarter. It has a LOT of room to continue. It's too early to call the end to that product line.

     

    IPhones are nearing a top - I agree. I hope they will bifurcate the product line to squeeze some more money out of it (low, medium, and high end phones).

     

    Yes, obviously there are more products to come. Whether or not they will be blockbusters is anyones guess.

     

    But, as I keep saying, with 140 billion+ cash - this company HAS to be concerned with capital allocation. Your perspective ("where's the next product?") is how they got into this position in the first place. Good capital allocation is what you need when you are not growing at 80% per year - and, AAPL can never grow at those rates again.
    21 Feb 2013, 04:34 PM Reply Like
  • donklos
    , contributor
    Comments (47) | Send Message
     
    I want Apple to get into content that will attract billions in advertising. They must diversify into non electronics businesses. They've set the style for others to "classically" copy, as so many Korean companies have done with cars and electronics so boldly forever. The Apple model requires it to pioneer new directions. Well... others are catching up, copying and being aggressive. Buy a network! Buy a major studio, or multiples of each. Create annuity income that creates a new golden goose. Get stable so us investors don't have to watch the stock like a toddler who is inching precariously to the staircase.
    21 Feb 2013, 03:23 PM Reply Like
  • pfbsurf
    , contributor
    Comments (142) | Send Message
     
    great point - with all of the criticism of NFLX's run and sky-high P/E, House of Cards is a huge success, and a very bold move.

     

    GOOG owns Youtube, which many scoffed at, a very good buy in hindsight.

     

    AMZN is next w/original content - the dinosaur media companies and cable monopolies should be very nervous

     

    Where is AAPL on all of this? Surely they can peel off 10-25 b to create a significant media division... Pixar anyone?
    21 Feb 2013, 03:48 PM Reply Like
  • GRJ
    , contributor
    Comments (323) | Send Message
     
    Sure. The "dinosaurs" like HBO, Showtime, AMC.... I can't believe these NFLX fanboys who think one series equals a bold move and makes them a real player in premium content. They need dozens more, hundreds of hours of proprietary, premium content! But NFLX can barely afford one. AAPL could dominate content if they want- NFLX, no chance.
    21 Feb 2013, 05:22 PM Reply Like
  • pfbsurf
    , contributor
    Comments (142) | Send Message
     
    no NFLX fanboy here bud - i have no idea about their viability as an ongoing content provider. But my statement is 100% true - the series is a big success and took guts to execute.

     

    HBO was once laughed at by the networks too. And AMC had no original content for years.

     

    But thanks for agreeing with me on AAPL
    22 Feb 2013, 09:53 AM Reply Like
  • gensearch2
    , contributor
    Comments (1556) | Send Message
     
    I wouldn't call a 50 cent dividend on a $50 stock in the preferred category; 50 cent on a PAR of $25 is more like it. I'm holding two preferred now each at $25 PAR and one pays 43 cents a quarter and the other 53 cents a quarter.
    21 Feb 2013, 03:31 PM Reply Like
  • croatkid1
    , contributor
    Comments (206) | Send Message
     
    I assume you recognize that the 50 cent dividend on a $50 preferred share is per quarter which = $2 per share per year = 4% - got it?
    21 Feb 2013, 05:29 PM Reply Like
  • gensearch2
    , contributor
    Comments (1556) | Send Message
     
    Did you calculate the yield for a 53 cent dividend per quarter on a $25 PAR?
    22 Feb 2013, 07:57 AM Reply Like
  • klgmdc
    , contributor
    Comments (313) | Send Message
     
    Einhorn is bored running Greenlight. Apple should hire him as Director of Shareholder Services. Let Einhorn run amok and manage Apple's cash hoard for the benefit of.... who?. jk. (I recently learned this abbreviation stands for "just kidding", or John Kerry.)
    21 Feb 2013, 03:37 PM Reply Like
  • Skippy09
    , contributor
    Comments (1907) | Send Message
     
    I never tire of reading about everyone telling AAPL what it should do. Then again, yes, I do tire of it. Apple, Inc., once, and will be again, the highest capitalized company in the world.
    Hint: Steve Jobs died, just like you and I will. Get over it.
    21 Feb 2013, 04:24 PM Reply Like
  • VictorHAustin
    , contributor
    Comments (824) | Send Message
     
    Not an all bad idea.

     

    But why is this being dramatized like some staged reality talent show? What is all the hostility and aggressiveness about? It sounds like Cook and the board were ready to listen. Has Einhorn stopped by to make his presentation to them, or did he go directly over their heads to us?

     

    Nobody, including a director, has very much tolerance or patience for a team member who goes over their head as the first tactic. I can't blame them.

     

    The goal here must be something other than a smooth and effective spin off of this iPref. Maybe just ego and grandiosity. I guess we'll see soon.
    21 Feb 2013, 06:29 PM Reply Like
  • tjmxxx
    , contributor
    Comments (99) | 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, 07:37 PM Reply Like
  • STDvooh
    , contributor
    Comments (641) | Send Message
     
    AAPL shareholders should ignore Einhorn and so should Apple's management and BOD. Einhorn's plan is to suck the cash out of Apple and leave a broken company behind.

     

    AAPL should use the money, as it has been doing, and grow itself into a hedge fund, venture capitalist, and finance company, to both compliment and stabilize its tech core. Other than that, strategic takeovers of companies that can grow the tech end should be done. The money is for the future growth of Apple. Anyone who doesn't like how the company is being run, including Einhorn, should sell their shares and buy something that meets their current needs. AAPL is for long term investors. Scammers and day traders get over it already. But, thanks for the current buying opportunity, that you have given to long term holders recently.
    22 Feb 2013, 02:45 AM Reply Like
  • pressure sensor
    , contributor
    Comments (83) | Send Message
     
    Against free issue of ipreffs! It will have deleterious effect on the value of the common and mess with all exising option positions. Only benefit to existing shareholders for a one time distribution of preferred! No long term solution for the common stock
    22 Feb 2013, 03:52 PM Reply Like
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