Post: #1

Opinions?

WIA

Post: #2

Only reason he wants cash out of them is it will spike the stock temporarily so he can get out of it. He has a massive position in the company and I am pretty sure he is sitting on some huge losses.

My opinion is they need to keep the cash and use it for R&D. Apple is no longer the king of smartphones, which is where they make most of their money. They need to keep innovating or they will become the next MFST or CSCO or even worse Blackberry.

Post: #3

(02-27-2013 03:07 PM)BIGINJAPAN Wrote:  Only reason he wants cash out of them is it will spike the stock temporarily so he can get out of it. He has a massive position in the company and I am pretty sure he is sitting on some huge losses.

My opinion is they need to keep the cash and use it for R&D. Apple is no longer the king of smartphones, which is where they make most of their money. They need to keep innovating or they will become the next MFST or CSCO or even worse Blackberry.

Losses from his other stocks? or from buying into apple when it was trading for much higher?

I think most businesses are hoarding cash cause they don't think the economy is back yet. As for R&D, the Street prefers accounting tricks to engineering, at least they do in my mind. Until someone bucks the trend and makes something awesome, by the next quarter analysts and shareholders are asking "what have you done for me lately?"

WIA

Post: #4

Can anyone post a quick summary?

Post: #5

(02-27-2013 06:01 PM)storm Wrote:  Can anyone post a quick summary?

In a nutshell
- Apple has a heap of cash
- Apple's stock price has plummeted (less iphone and ipad orders)
- Einhorn owns a bunch of apple stock
- Einhorn probably took a big hit
- Einhorn wants apple to pay out that heap of cash to the shareholders, in the form of dividends.
- as a shareholder, you're the owner of a corporation, and its cash reserves are basically your property.

The legal case is more complicated. In order to get this money Einhorn wants to put it to a vote among the shareholders. Apple made moves to make this vote harder to implement, and Einhorn got a federal judge to say that Apple couldn't make those changes.

The whole thing needs to move forward for money to change hands, but once the procedural aspect is out of the way, shareholders are probably going to vote with their wallets in mind. And each share counts as a vote, so people with the most shares get the most votes.

A lot of companies run into this problem of having too much cash on the books.

Rather than put their money into developing their people, or R&D, companies buy back shares - which raises the share price, which enriches the owners of the stock (on paper)

Companies used to distribute the profits to the shareholders, but the current climate is against dividends. I don't know if that's related to Warren Buffett's thoughts on the matter, or something else.

WIA

Post: #6

no company needs to keep $100B just fucking floating around overseas not put to use. either do something with it or lower your damn prices to us small people.

Post: #7

Yeah Einhorn owns a lot of apple and probably has taken a huge bath on them. That is why he is pushing so hard.

Post: #8

AAPL is already paying a dividend, and buying back stock.

Post: #9

A lot of these tech companies are in a bit of a bind. A lot of their appeal is that why they are still growing and still coming up with new products and technology. They're hoarding cash, because the minute they start paying out dividends they're admiring that they have nothing new to in which to invest that money.

Then the question becomes: Is Apple a tech company or a gadget maker? Is Google a tech company or a search engine? Is Facebook a tech company or does it sell ads? These can all be very profitable lines of business, but the investment profile of a company changes once it leaves that growth phase. Apple isn't fooling anybody by hoarding cash. Actually, that's not true. Thanks to a tech and financial press that swings from Apple's nuts worse than Dick Vitale swings from Duke's nuts, Apple has been fooling plenty of folks. This model of convincing people to buy a new product with minimal upgrades every 18 months simply can't last forever. I know lots of people who simply will only upgrade once their old phone has stopped working. I'm like that. And even when I do upgrade, I'm not getting the latest model.

The more I think about it, Apple is like a dude with really good game. You can roll into a new city and have ten girls in your orbit in a short time. You're swimming in it, but it won't last. Some of those girls are going to start to want more and realize that you won't change. You have to keep aquiring new prospects. For a player that's not that hard, because you're one person in a place with hundreds of thousands of women. Apple on the other hand has a limit to how many new customers they can attract. And they have a limit to how many of their present customers will keep loyal? I have one friend who used to be all about getting the latest Apple product and the last time I saw him he had the Windows phone. He said he's tired of Apple not returning his calls and only ever giving him Skittles.

Post: #10

(02-28-2013 07:15 AM)j r Wrote:  A lot of these tech companies are in a bit of a bind. A lot of their appeal is that why they are still growing and still coming up with new products and technology. They're hoarding cash, because the minute they start paying out dividends they're admiring that they have nothing new to in which to invest that money.

Then the question becomes: Is Apple a tech company or a gadget maker? Is Google a tech company or a search engine? Is Facebook a tech company or does it sell ads? These can all be very profitable lines of business, but the investment profile of a company changes once it leaves that growth phase. Apple isn't fooling anybody by hoarding cash. Actually, that's not true. Thanks to a tech and financial press that swings from Apple's nuts worse than Dick Vitale swings from Duke's nuts, Apple has been fooling plenty of folks. This model of convincing people to buy a new product with minimal upgrades every 18 months simply can't last forever. I know lots of people who simply will only upgrade once their old phone has stopped working. I'm like that. And even when I do upgrade, I'm not getting the latest model.

The more I think about it, Apple is like a dude with really good game. You can roll into a new city and have ten girls in your orbit in a short time. You're swimming in it, but it won't last. Some of those girls are going to start to want more and realize that you won't change. You have to keep aquiring new prospects. For a player that's not that hard, because you're one person in a place with hundreds of thousands of women. Apple on the other hand has a limit to how many new customers they can attract. And they have a limit to how many of their present customers will keep loyal? I have one friend who used to be all about getting the latest Apple product and the last time I saw him he had the Windows phone. He said he's tired of Apple not returning his calls and only ever giving him Skittles.

This is exactly right. Apple invests what? 3% of the amount of cash they're carrying around on R&D a year? Now that may work when Apple is creating whole new categories of tech products or reinventing old ones, but right now it's becoming apparent that they're coasting.

For example, Apple is signalling that it's looking to expand in emerging markets like India that it previously left to companies like Samsung, Blackberry, and cheap Indian Android phone-makers. Going for the discount smartphone product in the developing world suggests to me that Apple is in fact becoming just a gadget maker.