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Apple Inc. Message Board

  • eyesandears51 eyesandears51 Jan 29, 2013 9:59 PM Flag

    Let's Polish the AAPL

    The following analysis transcribed from another message board may provide some options for value enhanced at Apple....
    " Action to relieve sharehoder pain, and long term value creation for the company are not imcompatible. Apple has approximately $ 40 billion in cash. Put in context this is equivalent to nearly two years of my home state of California's peak annual budget deficit. While some in California might appreciate a donation to the State, resulting in two years respite from income tax, a broader spectrum of Apple shareholders would benefit from a more productive use of assets than mere cash husbandry. Some, or a combination of the following alternatives, could satisfy the dual objectives. 1- Allocate 5%, or $ 2 billion to doubling the dividend, boosting a modest 2.4% yield to an attractive 4.8%, compensating investors, while waiting for a stock moving catalyst, likely in a quarter or two. This action has the tertiary benefit of assuring that the 1.9% short percentage of float remains low. 2- Announce a large multi-year stock buy back, far greater than the current amount that basically replacies shares granted to employee's. 3- Engage in significant and transformative M&A's, adding sustainable value when combined with Apple's large ecosystem. Twitter has been mentioned by many, but also consider Netflix, or more importantly Disney. Disney Chairman/CEO, Bob Iger, is near retirement and sits on the Apple Board. International acquisitions should aslo be considered, obviating the cost and complexity of cash repatriation. 4- Invest in a major expansion of the services business. Examples include, replacing the very high cost " phone subsidy ", business model tolerated as a necessary but unwelcome evil by worldwide carriers, with a revenue sharing program. This can change the dynamic where carriers prefer and promote " lower subsidy " smart phones based on Android, RIM, or Microsoft, operating systems. Apple has targeted China and the developing world, where Android's market share is large and growing, as a key revenue driver. The high cost of " carrier subsidies " is the most significant barrier to Apple Smart Phone adoption in these markets.

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