I find it a bit ridiculous Carl Icahn can go on "Power Lunch" on CNBC, speak for a few minutes, and cause investors to go into a selling frenzy (not only AAPL, but the entire market NASDAQ and DOW was affected).
Securities are so easily multiplated and affected by CNBC and their interviews, it is a bit scary. Perhaps even more scary are reporters who basically write opinion pieces and affect security prices.
Looking on Carl's twitter (https://twitter.com/Carl_C_Icahn/status/725717908056330241) he even said he was going on "Power Lunch" before he did. Of course it would be hard to know what news he was going to deliver, but you have to think some people "in the know" had an idea and made some money today.
If you're bullish on AAPL, this is the kind of stuff that investors can and should take advantage of. Apple is the same company yesterday as it is today. It's ability to generate cash is the same today as it was yesterday. Carl Icahn saying something on TV doesn't change that.
From one of Warren Buffet's annual letters:
“If a moody fellow with a farm bordering my property yelled out a price every day to me at which he would either buy my farm or sell me his — and those prices varied widely over short periods of time depending on his mental state — how in the world could I be other than benefited.
If his daily shout-out was ridiculously low, and I had some spare cash, I would buy his farm. If the number he yelled was absurdly high, I could either sell to him or just go on farming.
Owners of stocks, however, too often let the capricious and irrational behavior of their fellow owners cause them to behave irrationally.
Because there is so much chatter about markets, the economy, interest rates, price behavior of stocks, etc., some investors believe it is important to listen to pundits — and, worse yet, important to consider acting upon their comments."
I mean, part of the entire point of the stock market is that it operates on investor confidence; these kind of effects happen all the time from many different causes. If this kind of thing scares you, it kind of seems like the whole stock market itself would scare you.
Heck, there's a separate sub-sector of the financial industry devoted to "dark equity" and hiding the actions of influential actors in order to not produce these effects.
The whole thing is a scam, and by not doing anything the SEC is enabling this kind of behavior. Carl Icahn and CNBC should already have been investigated for this open manipulation of the market. We know that there are just few corporations with this power over the markets (CNBC, Reuters, Bloomberg, and WSJ). They should be on a tight leach by the SEC.
You might enjoy Taleb's "Fooled by Randomness", which is a smart and personal look at how insane that system is.
After reading that, I ended up explicitly ignoring my portfolio except at rare scheduled intervals. I'm much happier, and I don't think my results are any worse.
Bad press, but good riddance. I can't imagine Apple has much use for out-of-touch "activist" investors clamoring for short term growth and dividends while complaining about their lack of "innovative" new products like … television sets.
> out-of-touch "activist" investors clamoring for short term growth and dividends
The company has 230 billion in the bank, they can surely remunerate their investors. OR invest in their own company more, quality is down over the past 5 years, they can invest in more engineers. The hardware lives extremely lengthy update cycles (on average 3 years? MacBook?) There is a lot they can do with their capital that will provide them with long term growth. Products like the Apple Watch wont do it.
Their products are becoming commoditized, and other companies are selling similar products cheaper, and with faster turnaround than Apple.
This doesn't mean that Apple won't remain on or near the top of the heap when it comes to hardware, but it means that the era of explosive growth is likely over.
Over time, the price of all technology races toward zero. Unless APPL has a battery that can last for an entire week, or is first to market with an affordable car that can drive itself, it cannot sustain the levels of growth investors have gotten used to in the medium to long term.
I wonder how many people here read/looked at the interview. Icahn said he was interested in buying Apple again, but thinks there are market risks and that the Chinese government seems keen on interfering with American tech companies. He said that he has faith in Apple as a company, just not the stock at its current level in this environment.
All very sensible reasons to get out of a position if you think it may be dead money for a few years. He made millions/billions from his position (he did the same in Netflix and sold that entire position.) Icahn is no dummy. Those calling "activist" investors as all Gordon Gekko types, looking to gut companies, are living in fantasy. In his interview Icahn actually calls out CEOs for running companies into the ground and using golden parachutes.
People go nuts over Facebook selling, again, $1/month per subscriber. Their entire income is 50% of Apple's profit. People go nuts over Amazon finally profiting 500M in a quarter which is 1/20th of Apple. If Facebook got $1/month for every living person on earth they still wouldn't get close to Apple's non-hardware income ($10B). Maybe Carl can go irritate them for a while.
> People go nuts over Amazon finally profiting 500M in a quarter which is 1/20th of Apple.
Amazon profiting 500M is interesting not because they previously couldn't, but that they always chose not to, and so people are wondering the cause for the change.
Interesting insight, Apple's market cap is $600 B while it has ~$250 B cash/equivalent.
So net of all their businesses valuation is more like $400 Billion? Less than Google and Microsoft?
Anyway I don't think it is unfair for an investor to want company to pay dividends when it has no good use for that cash. Remember, Carl Icahn was the guy who spun off paypal from the sinking ship that is ebay.
I have been asking this question for a long time, and yet fail to find or get an answer that i could understand.
Why did Apple choose to buy back stocks? Was there any need for it?
What has buying back stocks and wipe them off ( instead of keeping them ) benefited to me as a shareholder? Some would argue without the buyback, their share prices would have dropped even more, but that would at least create a chance for me buy a more for what i think is of value. Now as far as i have concern, they have merely make the stock a lot less volatile with NO / little dividends.
What has buying back stocks and wipe them off ( instead of keeping them ) benefited to Apple as a company? Those money could have been used somewhere else to create EVEN more VALUE instead of buying back?
Buying back stock decreasing the amount of outstanding shares. Decreasing the amount of outstanding shares means each share has more share of the earnings (earnings per share).
Buying back stock does not benefit Apple as a company, but if the shares are undervalued it benefits you as a shareholder.
I dunno, seems pretty reasonable to want a dividend payment. Apple is just sitting on a mountain of money and not doing anything with it, why keep all that cash out of the market?
Perhaps so they're not beholden to the whims of the casino^h^h^hStock Market when it comes time to raise cash for a new factory, headquarters building, or engineering project?
I always wondered what the effect would be if all stock trade transactions has a minimum 24h ownership requirement. You MUST hold a stock/option/hedge for at least 24h before trading it off. I picked the 24h period rather arbitrarily.
Would anyone who actually knows anything about this care to enlighten me ?
There used to be an Apple Doomsday Clock website in the 1990s.
Geekforce saved some of the pages but recently got rid of them.
It took the Think Different campain and made a mockery of it showing pictures of Hitler, Stalin, Mao and others. At times it was funny at other times it was offensive.
But they would talk about how Apple was doomed. Until Steve Jobs came back and fixed the company and then they were pro-Apple.
But it was a good satire and sarcasm site like The Onion is today.
[+] [-] nodesocket|10 years ago|reply
Securities are so easily multiplated and affected by CNBC and their interviews, it is a bit scary. Perhaps even more scary are reporters who basically write opinion pieces and affect security prices.
Looking on Carl's twitter (https://twitter.com/Carl_C_Icahn/status/725717908056330241) he even said he was going on "Power Lunch" before he did. Of course it would be hard to know what news he was going to deliver, but you have to think some people "in the know" had an idea and made some money today.
[+] [-] edawerd|10 years ago|reply
From one of Warren Buffet's annual letters:
“If a moody fellow with a farm bordering my property yelled out a price every day to me at which he would either buy my farm or sell me his — and those prices varied widely over short periods of time depending on his mental state — how in the world could I be other than benefited.
If his daily shout-out was ridiculously low, and I had some spare cash, I would buy his farm. If the number he yelled was absurdly high, I could either sell to him or just go on farming.
Owners of stocks, however, too often let the capricious and irrational behavior of their fellow owners cause them to behave irrationally.
Because there is so much chatter about markets, the economy, interest rates, price behavior of stocks, etc., some investors believe it is important to listen to pundits — and, worse yet, important to consider acting upon their comments."
[+] [-] Benjammer|10 years ago|reply
Heck, there's a separate sub-sector of the financial industry devoted to "dark equity" and hiding the actions of influential actors in order to not produce these effects.
[+] [-] coliveira|10 years ago|reply
[+] [-] wpietri|10 years ago|reply
After reading that, I ended up explicitly ignoring my portfolio except at rare scheduled intervals. I'm much happier, and I don't think my results are any worse.
[+] [-] jerryhuang100|10 years ago|reply
[+] [-] matchagaucho|10 years ago|reply
[+] [-] sremani|10 years ago|reply
[+] [-] gonvaled|10 years ago|reply
[+] [-] bydo|10 years ago|reply
[+] [-] ProAm|10 years ago|reply
The company has 230 billion in the bank, they can surely remunerate their investors. OR invest in their own company more, quality is down over the past 5 years, they can invest in more engineers. The hardware lives extremely lengthy update cycles (on average 3 years? MacBook?) There is a lot they can do with their capital that will provide them with long term growth. Products like the Apple Watch wont do it.
[+] [-] raverbashing|10 years ago|reply
"Activist investors" are essentially parasites, as they are only interested in short-term profit
[+] [-] Esau|10 years ago|reply
[+] [-] wvenable|10 years ago|reply
[+] [-] bparsons|10 years ago|reply
This doesn't mean that Apple won't remain on or near the top of the heap when it comes to hardware, but it means that the era of explosive growth is likely over.
Over time, the price of all technology races toward zero. Unless APPL has a battery that can last for an entire week, or is first to market with an affordable car that can drive itself, it cannot sustain the levels of growth investors have gotten used to in the medium to long term.
[+] [-] matwood|10 years ago|reply
[+] [-] partiallypro|10 years ago|reply
All very sensible reasons to get out of a position if you think it may be dead money for a few years. He made millions/billions from his position (he did the same in Netflix and sold that entire position.) Icahn is no dummy. Those calling "activist" investors as all Gordon Gekko types, looking to gut companies, are living in fantasy. In his interview Icahn actually calls out CEOs for running companies into the ground and using golden parachutes.
[+] [-] r00fus|10 years ago|reply
Why shouldn't Apple just go private?
[+] [-] mikeyouse|10 years ago|reply
[+] [-] coldcode|10 years ago|reply
[+] [-] mcphage|10 years ago|reply
Amazon profiting 500M is interesting not because they previously couldn't, but that they always chose not to, and so people are wondering the cause for the change.
[+] [-] abhi3|10 years ago|reply
So net of all their businesses valuation is more like $400 Billion? Less than Google and Microsoft?
Anyway I don't think it is unfair for an investor to want company to pay dividends when it has no good use for that cash. Remember, Carl Icahn was the guy who spun off paypal from the sinking ship that is ebay.
[+] [-] abritinthebay|10 years ago|reply
Except Apple does have use of that cash. It's just not the short-term thinking that Wall Street and cheap get-rich-quick investors like.
[+] [-] ksec|10 years ago|reply
Why did Apple choose to buy back stocks? Was there any need for it?
What has buying back stocks and wipe them off ( instead of keeping them ) benefited to me as a shareholder? Some would argue without the buyback, their share prices would have dropped even more, but that would at least create a chance for me buy a more for what i think is of value. Now as far as i have concern, they have merely make the stock a lot less volatile with NO / little dividends.
What has buying back stocks and wipe them off ( instead of keeping them ) benefited to Apple as a company? Those money could have been used somewhere else to create EVEN more VALUE instead of buying back?
[+] [-] nopzor|10 years ago|reply
Buying back stock does not benefit Apple as a company, but if the shares are undervalued it benefits you as a shareholder.
[+] [-] blabla_blublu|10 years ago|reply
[+] [-] jbob2000|10 years ago|reply
[+] [-] davidw|10 years ago|reply
[+] [-] joezydeco|10 years ago|reply
[+] [-] eridius|10 years ago|reply
[+] [-] ageofwant|10 years ago|reply
Would anyone who actually knows anything about this care to enlighten me ?
[+] [-] nopzor|10 years ago|reply
[+] [-] spriggan3|10 years ago|reply
[+] [-] mcphage|10 years ago|reply
[+] [-] unknown|10 years ago|reply
[deleted]
[+] [-] programmer1234|10 years ago|reply
[deleted]
[+] [-] draw_down|10 years ago|reply
[+] [-] orionblastar|10 years ago|reply
Geekforce saved some of the pages but recently got rid of them.
It took the Think Different campain and made a mockery of it showing pictures of Hitler, Stalin, Mao and others. At times it was funny at other times it was offensive.
But they would talk about how Apple was doomed. Until Steve Jobs came back and fixed the company and then they were pro-Apple.
But it was a good satire and sarcasm site like The Onion is today.