Associated Estates Realty Corporation Message Board

Wrong. Follow the math: Prior close was 12.68/share. Today was ex-dividend date on $0.714/share dividend. That makes fair value at $11.966/share. But today was also ex-dividend date on the share dividend of 0.1286 shares/share, resulting in a dilution of shares to 88.61% of prior value.$11.966*0.8861= $10.60/share. The close today was $10.69, so the stock actually went up, not down.

Here's my understanding of it. There's the stock dividend (think of it as a 1.128-1 stock split, but the stock has a $2.5 par value). The stock will be distributed to accounts in early May. Then there's interest on equity of $0.596/share payable (probably on or before June 30) to stock holders of record on 12/21/2012. This was already reflected in the stock price prior to today. Then there's the cash dividend for 2013 of $0.714/share split in two parts (June 30 and Dec 30). The stock divident and 2013 cash dividends weren't reflected in the stock price before today, but the interest on equity was. Taking into account the dilution and the ex-dividend event, fair value adjustment of the stock price brought it down to $10.60 this morning. I hope this helps.

From their last 10-k filing: "As of September 29, 2012 and September 24, 2011, $82.6 billion and $54.3 billion, respectively, of the Company’s cash, cash equivalents and marketable securities were held by foreign subsidiaries and are generally based in U.S. dollar-denominated holdings." So that means the foreign-held cash value wouldn't benefit from appreciating foreign currencies.

Where we differ is in the beta. I calculated a beta for AAPL in mid February of 1.2. That's where the difference between our numbers comes from. Totally agree with everything else you said though.

You must be Tim Cook

Its a an Apple culture problem. Actually, this problem originated with Steve Jobs. Sure Jobs was filthy rich. But I bet you didn't know that he gained almost all of his wealth from Disney shares, not Apple. Even today, the amount of AAPL stock insiders own is miniscule. They just don't buy into the whole "shareholders own the company" concept.

Having a large cash position (in vast excess of cash reseerves required for daily operations) hurts this company because its earning 1% interest when the company's required rate of return on equity is closer to 8.5%. They would be much better valued if they returned a sizable chunk of the cash to shareholders. By not employing the cash effectively (investing it and earning a ROR 8.5% or returning it to shareholders), they're destroying shareholder value. No doubt about it. They realize this too, they just don't care. Its the job of the board of directors to step in and ensure shareholder interests are looked after. That's just not happening. Its a case of bad corporate governance. By the way, Apple will likely miss, as their own earnings range is 9.37-10.35 per share based on their guidance numbers.