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brachiosaurus

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  • Disappointed By Apple's Yield? Think Again [View article]
    they've been constrained by Job's napoleon complex, who was more interested in creating a big empire rather than maximizing shareholder return. This is not a small matter! Suppose, that in 2007, AAPL committed to retiring 2.5% of their shares outstanding each year.
    what would have been the rough cost to accomplish this?
    roughly $25B to retire 12% of (persistently undervalued) shares over the 5 years. Because of the share reduction, the actual cash per share would be similar to what it is today (i.e., apple would still be sitting on way too much cash). It is fair to say that the value of that initial $25B investment would today be worth approximately 12% of apple's current market cap or $70B (although this is oversimplifying matters). Apple shareholders have been cheated out of at least $45B in value (70 - 25=45 ), compared to that simple and conservative reinvestment plan. That's a year's worth of earnings! Now imagine if they retired 5% of shares a yr, which they could easily have done!

    #1 lesson you should learn is that the company's board and management rarely place the shareholder first, and it is a crime (50 billion dollar crime) because they have known better than anybody what awesome products they had in store. We shouldn't be complacent just because our stock has done awesomely!
    Mar 19 09:51 PM | 1 Like Like |Link to Comment
  • Disappointed By Apple's Yield? Think Again [View article]
    it is about time! Too bad they didn't start a share buyback a few years ago! Imagine the 30B in cash that they had sitting around in 2009 earning less than 1%. If they had used it to repurchase stock, the value of that retired stock would be at least 100B today. certainly a better return that what they are getting on their cash!
    Mar 19 01:23 PM | 3 Likes Like |Link to Comment
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