
Apple More than Doubles Capital Return Program - leknarf
http://www.apple.com/pr/library/2013/04/23Apple-More-than-Doubles-Capital-Return-Program.html
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lkrubner
Nothing says "We are out of ideas" quite as powerfully as a company that
announces a big share repurchase program.

Do you believe there are untold, unimagined technologies waiting to be
invented? Do you believe that the future will be radically different than the
present? Then you should be investing, heavily, in the future.

Do you want to be ambushed by the new kid on the block? Do you want to be the
overly-confident behemoth who is cut down by the upstart, just as IBM was cut
down by Microsoft? Well, then don't invest in the future, just buy lots of
your own shares.

~~~
cynicalkane
Apple has _140 billion dollars_ in cash.

Pray tell what you think they should do with it? Hire 70,000 engineers for ten
years? Start an airline? Buy Wyoming?

Before Steve Jobs took over they were doing what you think they should do--
supporting every futuristic project that caught some executive's fancy.
Spoiler alert: this was a bad strategy. Wasting excess cash is a common anti-
pattern for big companies, such that it's a positive sign when they _don't_
spend money.

~~~
outside1234
They could start with making maps work or, really, any of their cloud
services.

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threeseed
Actually maps is getting better organically. It surpasses Google Maps in a
number of cities and being vector has a much better overall experience.

The cloud services should be split. iTunes Music Store has been pretty rock
solid since its inception. It's really iCloud Sync and the Mail features that
need work.

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rdl
ITMS kind of sucks, actually, and always has. The big issue is that the model
of "device tethered to a single laptop" is confusing now that the device is
wifi/4g enabled. But even in the iPod/iTunes days, iTunes was always kind of
shakey.

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rdl
I am way happier with stock buyback vs. dividend right now, since the stock is
so undervalued. There are also tax benefits to buyback.

I would love to see Apple spend billions each (not tens of billions) on:

1) turning iCloud into something _amazing_ \-- an individual, small business,
or enterprise framework to do device management, sync, etc. Everything Steve
Jobs would have wanted as a consumer service, but also available as SAAS or
on-premises, like BES, to manage the phones for a company.

2) Don't go into the enterprise software market, but buy a decent enterprise
software company or talent just for talent, and get those guys to make Apple
_the_ way to develop enterprise software. Basically everything Microsoft does
with MSDN, easy hooks to build for the enterprise, etc.

3) Invest in GitHub, either in equity, or just in first-class support.
Integrate GitHub and Apple software development and ideally some app
development tool like Parse, so it's easy for power users, enterprise IT, and
third party developers to build apps for the ecosystem.

4) Use security as a competitive advantage; build platform security like on
iOS for OSX, but even _better_ than the best option out there today
(ChromeOS). Great management tools for individuals, companies, developers to
do MDM, ERM, etc. Make using Apple devices with Apple-blessed apps and Apple-
blessed services actually safe.

5) Make i18n/l10n for the Apple ecosystem better and easier than for anything
else.

(disclaimer: I have what for me is a fairly huge open call position in apple
options over the next 2 years, so I'm pretty "invested" in Apple's success)

~~~
outside1234
Most of those things involve communicating and partnering with external folks.
Apple has no idea how to do that.

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threeseed
How do you think Apple makes its products ? Magic ?

They have to communicate and partner with lots of suppliers from small to
large around the world. They also have content partnerships with Twitter,
Yahoo, Facebook, Tom Tom, Yelp etc. And the there is the huge array of media
partnerships in the iTunes Store.

Seems like a LOT of partnerships actually.

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venomsnake
Apple don't communicate and partner. They give orders and expect obedience.
The only partnership I can think of is the iBooks one. And it went to court.

~~~
rdl
They're quite partnerific with their hardware vendors (in Asia, essentially).

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ultimoo
I confess that I understand very little of this. Can someone explain what does
this mean in layman terms?

I did understand that Apple is going to invest more money in its own shares,
as a result of which, the portion of Apple, Inc. owned by other investors will
be reduced. However -- what does this imply? Is this a general pattern that
companies follow at some point in their lifetime?

Again, I apologize for my lack of knowledge in this domain.

~~~
MaysonL
What this means is that each share owned by the public will represent a
(somewhat) larger share of Apple. If Apple buys back about 15% of the company
(about what the $60B plan they announced represents at curren price) then what
was previously 85% ownership of the company will now be 100%: about a 17.6%
increase.

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pilom
I don't think you have it right. The buy-back doesn't make each share owned by
the public worth more of Apple. What it does is makes the company own more of
its own shares (i.e. more shares are owned privately instead of publicly). The
easy way to understand it is to take it to the extreme. If Apple bought every
share but one, that one shareholder would not own 100% of the company. If
Apple bought every share that would be taking the company private.

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eru
I doubt a company could take itself private. Who would own it? Would it own
itself?

MaysonL's explanation in the grandfather comment to this one is right. You do
have to take into account that the 85% that will now be the new 100% will have
less capital on hand, though.

If the stock market price is efficient, the new apple should only have a
market cap of 85% of the old one. If it's more (or less), the stockmarket is
not really rational..

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ljd
Companies can take themselves private. BestBuy is in the process of doing it
right now.

The owners? The stockholders. They just aren't trading their shares on NASDAQ
anymore.

MaysonL's explanation is incorrect.

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AnthonyMouse
You're all talking past each other. "Taking a company private" has nothing to
do with stock buybacks. Stock buybacks are when _the company itself_ buys its
own stock and then cancels the shares, which increases the percentage
ownership stake of the remaining stockholders. Taking a company private means
that a single large investor (or a cooperating group thereof) buys 100% of the
shares and then votes to delist the company from the stock exchange and stop
trading the shares publicly.

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eru
Yes. So a company can't take _itself_ private. Stockholders can take a company
private.

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maxprogram
Hacker News readers who are interested in how share buybacks work and how they
can be a very _good_ idea (even in the tech industry) should read up on Henry
Singleton & Teledyne:

<http://en.wikipedia.org/wiki/Henry_Earl_Singleton>
[http://observer.com/2003/04/the-brain-behind-teledyne-a-
grea...](http://observer.com/2003/04/the-brain-behind-teledyne-a-great-
american-capitalist/)

Think of it as a way to reinvest in the future of your current business
without having to actually expand it (which, in the case of a company at
Apple's size/stage, would likely be wasted on low-returning incremental
investments). Apple returning capital is a good thing -- it's how businesses
should work.

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hkmurakami
I'm so torn about this.

As a shareholder, it's great news for me. But as a member of the tech industry
and generally idealistic guy, it hurts to see them bending to the calls of the
finance industry.

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spoiledOldGuy
I agree with you the fact that WallStreet continues to bend them for about a
couple of weeks just so they could control the market. Maybe Apple needs to go
private so there won't be anymore pressure from the so called finance industry
and they could concentrate again to build awesome products.

~~~
kooshball
> Maybe Apple needs to go private so there won't be anymore pressure from the
> so called finance industry and they could concentrate again to build awesome
> products.

This doesnt really make sense in Apple's case since they're at a such a
gigantic size. The closing market cap 381B - cash 145B is a huge number. Who's
going to pitch in to buy the rest of those shares? Good luck getting that done
without any input from those you call the "finance industry".

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capkutay
I think this is a reaction to textbook Wall Street game-playing. A nice
network of hedge managers went 5-6x on aapl, they sell it and bring the price
down while "analysts" come up with all this bs about how Apple's record
setting quarter doesn't meet their "expectations".

At the same time, I think Tim Cook has to be a little more vocal. It may not
be the Steve Jobs way, but I think its ok talk to the press solely for the
purpose of inspiring confidence in your company as opposed to waiting for
product releases .

