Blah, blah, blah, Apple should repurchase their shares, blah, blah, blah, make me more money, blah, blah, blah.
Carl Icahn is at it again
Blah, blah, blah, Apple should repurchase their shares, blah, blah, blah, make me more money, blah, blah, blah.
I don’t get your beef with Icahn. Every smart analyst knows AAPL is undervalued. (Horace Dediu did the algebra to show it: http://www.asymco.com/2015/02/11/the-sp-499/ ) Apple is sitting on a huge cash reserve with no intent to spend it all. I would love to see them invest more aggressively, but if they won’t, then they should invest in AAPL.
A very fair question. Bottom line, he just rubs me the wrong way. I get the sense he sees himself as a representative of the little guy, the vox populi, but his every move seems designed to line his own pockets. I don’t see him as an activist in the traditional sense, but that seems to be the way he paints himself.
I’m not arguing against share repurchase. I am more a fan of strategic external investment, internal investment to improve product quality (especially software), or R&D funding.
Dave, trust your instincts. Before they coined the term “activist investor” he was, in the 80s, known as a Corporate Raider…. Think Gordon Gekko, only without the principles.
Agree to disagree then. Icahn is an asshole, but he’s also a self-made billionaire with middle class roots and no conventional business training (surprisingly, he has a BA in philosophy). He found his gift and ran with it, and I respect that.
Look closer at Ichan’s history. He’s a greedy next-quarter profits hit and run kind of investor. The exact opposite of the smart way Apple conducts business.
On reason they keep that money is because they have a long memory. And they don’t ever want to be put in the position of being at the mercy of any other company that has less than nobel intent on how they deal with Apple. And Ichan is exactly that kind of buffoon.
Like Pol Pot has a flair for crowd control? I exaggerate, but it makes my point.
“Apple is sitting on a huge cash reserve with no intent to spend it all. I would love to see them invest more aggressively, but if they won’t, then they should invest in AAPL”
As a s/h, I am thankful that Apple hasn’t said it plans to “spend it all”.
Apple is investing in AAPL; Cook has openly stated many times that Apple is currently executing the largest share repurchasing program in history.
Apple’s annual CapEx is mind boggling.
Apple’s Green initiatives are very expensive.
Apple has consistently increased its dividend.
Apple is doing more with its cash than listed here, and it would do even more if it weren’t for the taxes related to repatriating overseas cash. This, in my opinion, is the bottleneck.
Either way, spend it too slowly or spend it too quickly, Apple is screwed.
Do Apple critics hold the same opinion about MSFT’s $90b in cash or GOOG’s $60b?
Old codger. Perhaps, he’d have more fun speculating in oil futures.
I want them to keep that money too, just not sitting around as cash. It’s like having a million dollars in your checking account and a thousand in stocks.
“(Do Apple critics hold the same opinion about MSFT’s $90b in cash or GOOG’s $60b?)” — No, because they regularly invest in other businesses, either through venture capital or outright purchases. Microsoft just purchased N-Trig, a company they had previously invested in.
I’m happy with Apple being more conservative in their investments, but letting so much sit as cash isn’t doing anyone any good, particularly given that their own stock is objectively undervalued. As a shareholder myself, I would be happier if they ended dividends and went all in on buyback. Take advantage of the market’s inability to recognize that Apple is not “DOOMED.”
Whoever in these comments defends Carl Ichan is delusional.
I agreed with this author. Carl only cares about himself. He has no interest in building businesses, just increasing his cash pile. When he gets control of a company he dismantles business units, like spare parts.
I agreed with this Dave Mark (author). Carl only cares about himself. He has no interest in building businesses, just increasing his cash pile. When he gets control of a company he dismantles business units, like spare parts.
Or money for a rainy day.
Let me explain to everyone why I hate the “rainy day” fund argument: 1) it assumes Apple will become unprofitable so suddenly that they are unable to adjust and 2) they will be unable to raise funds by reselling that stock because it’s worthless. In other words, the assumption driving this argument is “Apple is DOOMED!” It’s the same reason as why Apple remains undervalued in the market.
All companies are doomed… even oil companies. Maybe they should not assume.