Apple having their own credit cards isn't an option. Regulators wont' allow it first of all. Second of all getting into the payment industry, even for somebody as big as apple, isn't easy. Paypal is still a small player and that is despite STILL riding the rails of Visa/MC.
Apple would have to clear all regulatory hurdles. Banking hurdles and regulations. Make deals with banks or decide to absorb it all themselves including all the fraud and risk that Visa/MC has spent decades on and has patents all over too.
Apple running their own credit card scheme has a chance just south of zero. Cook knows this and isn't even dumb enough to waste time and money to try it. He just hopes that apple pay even at 0.00% will make people want an iphone. Problem is the reasons to upgrade now that the larger screen is out gets lower and lower.
ATT is already doing away with subsidies so we will start to see all the carriers do the same and upgrade cycles are going to go from 1 to 2 years to 3 to 6 years. This will be devastating to apple since 3/4 of their profits come from iphone and nothing else is coming close as ipad's hope has faded and is in decline.
This is an interesting article. Looks like Visa's standard tokenization may force apple pay to go from the tiny .15% they charge banks to zero (0.00%). So much for that revenue driver.
No news on this at all. Looks like either one large seller tripped the technical trader charts so they are chasing it down in their typical pattern. At some point it will stop and the charts turn and those guys all pile back in.
If you are a long term holder you hope for LOWER prices. This lets MO buy more stock back under the current buyback authorization.
Think of it this way. The less they have to spend to get shares back and retire them the more money for existing shareholders who stakes go up. The last thing you want for a company who does aggressive buybacks is high share prices. This is a welcome development and we can hope people panic out or get margin called and lower the price so those of us who own fractional shares of a whole company will benefit.
Just got back from mall. Kors store was busy with quite a few women in there shopping. Maybe 7 or 8. Pretty good for a post lunchtime when the mall is pretty dead. Most other stores were empty and not many people walking around the mall.
This is a very negative trend for Apple and a major event. Why? Consumers will get a much lower monthly fee once their phone is paid off in full. Then they will have to decide to bump it way back up if they upgrade their phone. I guarantee we will see upgrade cycles start to slow as a result.
Consumers will enjoy lower monthly bills and will try to stretch that as long as they can. Rather than upgrade every 1 to 2 years we may begin to see ever 3 to 5 as the norm.
Read the link below. ATT is now eliminating the subsidy which means the consumer has to pay for the phone rather than the carrier absorbing it. Ultimately this is better for the consumer where most would simply opt for a lower phone bill for longer rather than demanding the latest and greatest iphone or android for $500 to $800 paid for over one or two years.
PE is now under 10. 23% of the market cap lost today. $4.50 in earnings this year. Also $4.50 in cash. Back out the cash and you getting it under 9 times earnings. Now it is a possible LBO candidate
As KORS passes under 47 now it is now a smaller market cap than Coach! Interesting considering KORS did about 200M more in revenue in the latest quarter and actually grew top and bottom line. Meanwhile coach continues its sharp revenue and profit DECLINES.
Wall Street thinks Coach is worth more than KORS today? Really? For this to be true KORS will have to actually go from growth to declines in both revenue and profits AND Coach has to at least stabilize if not grow in contrast to its never ending double digit declines.
Either Coach now needs to come down sharply or KORS is so oversold it will bounce. Either way the equilibrium between the two is out of whack today.
Look at the profit margin difference between UA and KORS. Also the SSS. KORS has every retailer beat, bar none. Yet it trades for multiples less than even Coach which has had over 2 years of HEAVY declines in revenue, profit and SSS.
This is just market inefficiency at work. Nothing new. It corrects eventually whether it be directly in the market or via going private LBO or somebody acquiring.
KORS Is now Closing in on just 10 times next years net profit and under 7 times EBiTDA. Typical takeouts are between 7 and 10 times EBITDA. If the market gives you no credit and your are printing cash as KORS is it usually doesn't take long for things to get fixed.
The $1B in cash and no debt make it a prime LBO target as well. LBO operators look for lots of cash in the company and little debt. We shall see. I'm loading up on call options. KORS may be my biggest homerun before 2015 ends. Stock will be somewhere between 75 and 100
SSS stores are slowing because 40% was not sustainable. IT had to slow. Show me any retailer putting up the revenue, profit or SSS growth as KORS is right now. Good luck. There aren't any. Nobody is comping like KORS
there is now chatter of a leveraged buyout. I suspect a takeout price would be in the 80 to 90 range now based on multiple of EBITDA to Enterprise Value typical in LBO's. I won't be surprised if I wake up any morning now with the news should KORS continue to trade at this multiple and their pristine balance sheet with almost $1B in cash and zero debt.
It could. but it could also go to 60 or higher on a short squeeze for no other reason other than trading mechanics.
I just ran the chart of S&P 500 index to see how apple fared over the last 3 years compared to it. I was shocked that apple not only didn't beat the index but is just barely tie to it now. I'm going to bet the next 3 years it underperforms. Go check it out on the 3 year compare. Mindblowing that you could have had the same returns in the index over 3 years and not had to worry about timig your apple top exit and take the tax hit.