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Preston Pysh
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Preston Pysh is a graduate of the United States Military Academy at West Point with a degree in Aerospace Engineering. Preston is the bestselling author of, Warren Buffett's 3 Favorite Books. His wide range of writing has been featured on a diverse host of networks like Comedy Central and the... More
My company:
BuffettsBooks
My blog:
Warren Buffett Stock Market Forum
My book:
Warren Buffett's Three Favorite Books
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  • Apple's 3 Step Solution

    So here's a three step guide to stabilize Apple and hopefully prevent its talent from going somewhere else.

    1. Fix the balance sheet. Why in the world does Apple need 39.8 billion dollars in cash and short term investments? The answer is they don't. This is so simple, use 10 or 15 billion of this capital to buy back shares and place them in the treasury. There are a few reasons this is important. First, the buy-back will reduce the volume of shares on the open market, hopefully calming some of the calamity. Second, a simple 10 billion share buy-back would almost increase the EPS by $2.00 a share at the current market price. Three, a share buy-back (without retirement of the shares) would allow Apple to tap into this piggy bank later down the road if they need to make an acquisition. In fact, if they really want to do things right, management and the board can sign a memo to shareholders that restricts the shares in treasury only for acquisitions over the price of a billion (or something like that). This way, no one can claim the shares are for executive options. A win-win for everyone. I mean my gosh, interest rates are so freaking low right now, even if they do go in the hole a little to sustain operating cash flow, it's not like it's going to cost you anything….you might even make some real dollars on the borrowed money from inflation. Mr. Oppenheimer, give me a call if you have any questions.

    2. Will the real Tim Cook please stand up? Ok, so I have my doubts about Mr. Cook. I think this guy is a great leader and a great executer. He's the guy you call when you want to GSD (Get S... Done). I mean the guy works 25 hours a day - figure that out. The problem is this company has profited so drastically in the past from the vision and brilliance of what's to come. Tim Cook ain't that guy. No offense, he's just not. He really needs to be a COO. That's his role. Just because Cook isn't the visionary that Jobs was, that doesn't mean he can't find someone who is. He needs to stop worrying about the day to day operations (that's what the new COO is for), and he needs to start syncing his mind and methods with the artists and thinkers. This is truly the role of an Apple CEO. See what's next and tackle it with severe focus. Right now he needs to be agile and multi-perspective, and I'm afraid he's still doing his old job.

    3. Make some moves! I'm tired of watching this company walk around with its tail between its legs. So Samsung crushes you in the face with a hilarious commercial that makes your product look like it's for grandparents - So what! Get over it. Fire back - do it tastefully. Make the rivalry fun. Don't do the crap Microsoft is doing (you got ScrewGoogled), that's just lame, untrue, and awkward. Instead, come out with a commercial that has the oldest people on the planet using iPhones. Show those old geezers rocking-out in front of some lame generation X kids who can't fit their monstrous phones in their skinny jeans. I don't know, get creative, have fun, make moves! I thought of that idea in 3 seconds and it's sweet. I guess what I'm trying to say is stop acting like your girlfriend just told you she wants to be friends. Instead, own it like you're a boss. Life's a party, get out there, embrace the competition, and make some lemonade. Right now, Apple's at home with their face in a pillow just about ready to drown in their own tears.

    I typically like to talk numbers, but this one is so obvious. Get to work and start acting like you've been there before.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Preston Pysh is the founder of the Pylon Holding Company.

    Apr 22 2:23 PM | Link | Comment!
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