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Agreed. This hysteria is getting tiresome. I think Apple should simply get rid of investors and go private. I think its big enough and has enough cash to do jus

by albeva 10y ago

Agreed. This hysteria is getting tiresome. I think Apple should simply get rid of investors and go private. I think its big enough and has enough cash to do just that.

xadhominemx 10y ago
I can't tell if this is a joke? Apple couldn't use it's own cash to purchase itself from it's shareholders because the value of the company will always be greater than it's cash.
- selectodude 10y ago
  Apple would have to borrow heavily to buy itself back, just like every other company that buys itself back. But if any company could go borrow $400bn in cash, it's Apple.
  - dpark 10y ago
    A company cannot "buy itself back". That doesn't mean anything. The company never owned itself.
    - mwfunk 10y ago
      This is just plain wrong, you have major misconceptions about how publicly owned companies work.
      - dpark 10y ago
        Thanks for the detailed rebuttal. What exactly was "just plain wrong" about what I said?
      - adventured 10y ago
        The parent comment isn't wrong. Apple can't take itself private unto itself, there must be a human owner or owners that own all of Apple stock as a private corporation. Apple could team up with JP Morgan, Silver Lake Partners, and a dozen other firms to take itself private however, and they along with a likely small class of shareholders would own the private corporation (eg perhaps Tim Cook and Laurene Jobs would would choose to retain their large positions). There is no possible scenario under which a corporation can exist and continue to exist indefinitely in any of the 50 US states without a human owner somewhere in the chain, even if said owner is buried under a dozen shell companies.
    - selectodude 10y ago
      I wasn't considering the extreme pedantry that I'm apparently receiving when I made the post. I was using the phrase "buy itself back" as going private. The ownership structure after which point that it is no longer a public company was irrelevant to me at the time I made that comment.
      - dpark 10y ago
        The company can't "buy itself" into a private company either. It doesn't work for a whole host of reasons, one of which being that they aren't sitting on the ~600 billion in cash that would require, another being that buying a bunch of stock back is fundamentally not the same thing as being a private company. But also, if you buy all the stock back, it means by definition that you have liquidated all value in the company (or else we're assuming that the market undervalued the company so much that it thought nothing but the cash on hand was valuable). If you assume that Apple is going to borrow the 600 billion to buy all its stock, then you are effectively saying that whoever's left holding the "private" company is holding a 600 billion dollar loan. I do not share your optimism that anyone can get a loan large enough to buy Apple.
- dpark 10y ago
  It's not a joke. There was another thread with lots of people advocating the feasibility of this a few days ago. There are apparently a lot of people here who have no understanding of business finances.
- deleted 10y ago
  [deleted]
- gizmo 10y ago
  Cash isn't included in the enterprise value, you're thinking of the market cap. A company can simply do stock buybacks until it owns all the outstanding stock itself. It's like an IPO but in reverse. During an IPO a company sells equity and gets cash. During a buyback a company buys equity and pays cash. If you still believe this is impossible, think what would happen if a company on the day of the IPO decided to immediately and unilaterally reverse every transaction. Everybody would get their money back, and the company would simply get its equity back. It's as if the IPO never happened. Clearly not an impossibility. The only difference here is that because some time passed the investors want some extra return on their investment. That's not an insurmountable problem because Apple is rich.
  - icebraining 10y ago
    But when the IPO happens, some shares are already owned by investors (founders, VCs, etc). If you reversed the IPO, the company would still not "own itself", it would be owned by them.
    - deleted 10y ago
      [deleted]
  - dpark 10y ago
    > If you still believe this is impossible, think what would happen if a company on the day of the IPO decided to immediately and unilaterally reverse every transaction. Yeah, this isn't a thing the company can do. The board cannot "unilaterally" take shareholders' shares and give them money in return. They can initiate a buyback, but that means buying shares on the open market, and they'd still be a public company even if everyone sold back their shares. Or they can propose a buyout, but that requires a shareholder vote and typically external money. The first scenario still results in a public company, just with fewer shares. Neither scenario results in the company owning itself.

by albeva 10y ago

Agreed. This hysteria is getting tiresome. I think Apple should simply get rid of investors and go private. I think its big enough and has enough cash to do just that.

xadhominemx 10y ago

I can't tell if this is a joke? Apple couldn't use it's own cash to purchase itself from it's shareholders because the value of the company will always be greater than it's cash.

selectodude 10y ago
Apple would have to borrow heavily to buy itself back, just like every other company that buys itself back. But if any company could go borrow $400bn in cash, it's Apple.
- dpark 10y ago
  A company cannot "buy itself back". That doesn't mean anything. The company never owned itself.
  - mwfunk 10y ago
    This is just plain wrong, you have major misconceptions about how publicly owned companies work.
    - dpark 10y ago
      Thanks for the detailed rebuttal. What exactly was "just plain wrong" about what I said?
    - adventured 10y ago
      The parent comment isn't wrong. Apple can't take itself private unto itself, there must be a human owner or owners that own all of Apple stock as a private corporation. Apple could team up with JP Morgan, Silver Lake Partners, and a dozen other firms to take itself private however, and they along with a likely small class of shareholders would own the private corporation (eg perhaps Tim Cook and Laurene Jobs would would choose to retain their large positions). There is no possible scenario under which a corporation can exist and continue to exist indefinitely in any of the 50 US states without a human owner somewhere in the chain, even if said owner is buried under a dozen shell companies.
  - selectodude 10y ago
    I wasn't considering the extreme pedantry that I'm apparently receiving when I made the post. I was using the phrase "buy itself back" as going private. The ownership structure after which point that it is no longer a public company was irrelevant to me at the time I made that comment.
    - dpark 10y ago
      The company can't "buy itself" into a private company either. It doesn't work for a whole host of reasons, one of which being that they aren't sitting on the ~600 billion in cash that would require, another being that buying a bunch of stock back is fundamentally not the same thing as being a private company. But also, if you buy all the stock back, it means by definition that you have liquidated all value in the company (or else we're assuming that the market undervalued the company so much that it thought nothing but the cash on hand was valuable). If you assume that Apple is going to borrow the 600 billion to buy all its stock, then you are effectively saying that whoever's left holding the "private" company is holding a 600 billion dollar loan. I do not share your optimism that anyone can get a loan large enough to buy Apple.
dpark 10y ago
It's not a joke. There was another thread with lots of people advocating the feasibility of this a few days ago. There are apparently a lot of people here who have no understanding of business finances.
deleted 10y ago
[deleted]
gizmo 10y ago
Cash isn't included in the enterprise value, you're thinking of the market cap. A company can simply do stock buybacks until it owns all the outstanding stock itself. It's like an IPO but in reverse. During an IPO a company sells equity and gets cash. During a buyback a company buys equity and pays cash. If you still believe this is impossible, think what would happen if a company on the day of the IPO decided to immediately and unilaterally reverse every transaction. Everybody would get their money back, and the company would simply get its equity back. It's as if the IPO never happened. Clearly not an impossibility. The only difference here is that because some time passed the investors want some extra return on their investment. That's not an insurmountable problem because Apple is rich.
- icebraining 10y ago
  But when the IPO happens, some shares are already owned by investors (founders, VCs, etc). If you reversed the IPO, the company would still not "own itself", it would be owned by them.
  - deleted 10y ago
    [deleted]
- dpark 10y ago
  > If you still believe this is impossible, think what would happen if a company on the day of the IPO decided to immediately and unilaterally reverse every transaction. Yeah, this isn't a thing the company can do. The board cannot "unilaterally" take shareholders' shares and give them money in return. They can initiate a buyback, but that means buying shares on the open market, and they'd still be a public company even if everyone sold back their shares. Or they can propose a buyout, but that requires a shareholder vote and typically external money. The first scenario still results in a public company, just with fewer shares. Neither scenario results in the company owning itself.