10 thoughts on “How many laws did Apple break?”

1. The problem is that a lot of those Wall Street people are, for the most part, ‘buy-side’ or ‘sell-side’ analysts, and they’re got an agenda—move shares of stock. They’re not interested in Apple, they only care about AAPL. There’s an old adage in the finance world, “the company is not the stock”, and these guys don’t care about the company.

2. Great point and a very informative way of viewing Wall St “opinions” of Apple.

3. The Bens at the Cubed podcast had a really good episode on the various flavors of “analyst”, and when you know which side of these guys’ bread is buttered their “analysis” makes a lot more sense. Not any more accurate, of course, just more understandable.

4. Stock analysts are just advertising people for their respective brokerages.

   Apple’s share price is valued exactly where it needs to be. The market is not rational.

5. It seems these days the economy does not ‘conform to so many commonly held beliefs about economics and business’ either. It seems we are working for the ‘economy’, rather then it working for us.

6. the laser focus so many companies put on, “maximizing shareholder value” is often a way to minimize this value… One may think (strangely?) that paying attention to the actual business at had is the best way to build a company.

7. One may say, WallStreet is bankrupt.

8. It’s not just Wall Street and business. Most people have no concept of how much Apple defies convention.

   For example, when the sapphire screen rumor was hot (prior to GT Advanced growing cold), people would point out that there have been sapphire screens in the past, which is true, but Apple would need tens of millions at launch. That is completely unprecedented. The scale at which Apple produces premium phones is at least an order of magnitude beyond what anyone else does. Samsung matches them in total volume, but they make dozens of models of varying specs and components. Apple now makes four models at a time. Their capacity to replicate premium-quality products is so far beyond what others can do that most people seem unable to comprehend it. The most oblivious are those who called for Tim Cook, the operational genius who built this system, to resign as CEO.

9. http://www.forbes.com/sites/stevedenning/2011/11/28/maximizing-shareholder-value-the-dumbest-idea-in-the-world/

10. Money (literally) quote: “Even if she [hypothetical CEO] has a performance bonus tied to real-market metrics, the size of that bonus now typically pales in comparison with the size of her stock-based incentives.”
    I sat through a ‘motivational’ “quarterly kickoff” meeting once where the CEO used the phrase “shareholder value” not less than seven times. In the Q&A at the end I mentioned this and asked how many shares of company stock he held. I turned in my notice the next day. Funnily enough, HR already had my file out.
    As late as the 1980, CEOs averaged about 40 times the income of the average employee. Now it’s more than 400 times (down from about 500x during the peak of the dotcom boom). That’s almost entirely because of stock (perks like personal travel on the corporate jet accounts for a lot too), and it’s not options, where you vest the right to buy stock at pre-determined price—it’s grants, flat-out gifts of large lots of shares that can be held, sold, or folded into, very expensive, paper airplanes. Some companies have the decency to restrict those units, but more than a few companies just hand C-level execs (and board members) big chunks of stock. Then we’re surprised when CEOs make decisions that benefit stock price, even if it’s only short-term, often at the expense of average works and those decisions are usually rubber-stamped by the board.