The fact that
If you look at the current chatter about the iPhone 7 (continued tinkering expected when the new version of the iPhone debuts this fall), the issues that have recently cropped up in China for Apple (Cook is supposedly going to be in China to meet with the government sometime this month), saturated/stagnant demand for iPhones in the West, very high expectations set up by Tim Cook regarding Apple's potential in the Indian sub-continent (where the average smartphone is still priced below $150/unit) and the relentless selling/using shares in lieu of cash/disposing of stock by insiders at the company, there seems to be very little to ease the suffering of the shareholders in the near-term. Also, explains why the shares are at a two-year low as well.
So, is there anything that can move the shares higher going forward given this huge pall of gloom that has descended on Apple's shares?
There is a lot that Tim Cook and management can do that could get shareholders, existing and those considering an investment in Apple, really excited fairly quickly.
First and foremost, is to stop the relentless selling or using the shares in lieu of cash or otherwise disposing of or decreasing ownership by top management. The rationale is pretty simple. If the management team is unloading/selling/disposing their stakes as fast as they can, why should existing shareholders buy/add and why would anyone not a shareholder even consider buying? The 2% and change dividend is not going to do it neither has the massive buyback (using shareholder money) moved the needle much.
More importantly, maybe Tim Cook, Angela Ahrendts, Luca Maestri, Phil Schiller and the rest of top management at the company can buy 1 or 2 shares with their own money. I am pretty sure they can afford it, no?
After all if the future is so bright (I gotta wear shades) as Tim Cook says it is, those shares they buy (not holding my breath) should be worth a lot more down the road than they are at present. What do you think?
Second, is that Tim Cook should find a way to buy
Apple wants all of us to believe that services is a crucial part of future growth in terms of revenues and profits going forward. What better way to add
Apple is also working on an Apple car although the company has not really come out and said it as yet. Well, Tesla already has the cars of the future on the road and has the manufacturing already in place. In addition, Tesla broke all sorts of records with the $20 billion or so orders for the Model 3. Combine Apple's technology and software savvy with Tesla's existing manufacturing and you have a potential winner to say the least. Maybe even a world beater bar none.
I know that these are not easy acquisitions for Apple and there has to be a lot more under consideration, however as they say everyone has a price, and Tim Cook needs to find the right price for Netflix and/or for Tesla, which will keep shareholders of both companies and most importantly their founders happy.
Hard to do?
Sure, it is.
Impossible?
Not by any means.
Apple has already spent about $156 billion or so of our money buying back shares. If Apple has to, it could make a deal with our government and find a way to repatriate all or some of that cash it has abroad (earning pretty much nothing) and use that to buy out at least one of the two companies, Netflix or Tesla.
It also is fortuitous that Tesla and Netflix are off about 25% and 32% off their respective 52-week highs, so the timing could be just right.
The question is whether Tim Cook is willing to make a bold move which could reenergize not just existing shareholders of Apple but even have new investors maybe clamoring to buy Apple shares once again.
Finally, I am very aware that every company has insiders that sell/dispose/use the shares in lieu of cash like its going out of style, however if the shares are also rewarding shareholders at the same point, the insiders can hit the sell button till it gets stuck. However, I have an issue and always will, when the shares are not performing.
(Long aapl, tsla, nflx, long and short options)
You can follow my trades at jaysomaney.com
