Last year AAPL’s price action from Jan 1 to Sept 21 resembled a mania despite the first full year that the company was lead by new CEO Tim Cook. Cook set out quickly to establish that he was the CEO, and not playing by some script left to him from Jobs or Jobs’ Board of Directors.
COOK @ GS FEB 2012 TECH CONFERENCE:
Last year as AAPL’s cash on their balance sheet had just topped $100 billion, distribution to shareholders became a hot topic and where Jobs had previously dismissed calls for dividends and buybacks, Cook made the following comments at Goldman Sach’s Technology Conference on February 15th, 2012 (from Forbes.com):
Now, in terms of our approach on cash, I’ve said since becoming CEO, I’m not religious about this. I’m not religious about holding it or not holding it. And we’re in very active discussions at the board level on what we should do
It’s not new that we’re discussing it. It is being discussed more, now, and in greater detail, and that’s because the balance has risen to the point that you’ve already made. And I think it’s clear to everyone, and I’d be the first to admit, we have more cash than we need to run the business on a daily basis.
COOK @ GS FEB 2013 TECH CONFERENCE:
So similar to this year, Cook addressed their cash distribution plans at Goldman’s conference on Feb 12th, 2013, but offered little detail other than that they will continue to do so and that they were considering activist investor David Einhorn’s preferred share plan. By all accounts it is very unlikely the company will do such a thing.
COOK @ 2012 FEB SHAREHOLDER MEETING:
After much excitement regarding Cook’s comments at GS in Feb 2012, AAPL continued to march forward into their Feb 23rd, 2012 Shareholder Meeting, and at that meeting , Tim Cook ‘s comments on cash were summarized here by Forbes.com:
Cook addressed questions about the company’s almost $100 billion in cash, and said Apple isn’t convinced of the value of a stock split. Repeating comments he’s made in recent weeks that he and the board are “thinking about cash very deeply,” Cook told the packed auditorium that Apple has invested billions in its supply chain, in its retail stores, on expanding its operations and on acquisitions. “We’ve actually spent a lot but we still have a lot,” he said. “And frankly speaking, that is more than we need to run the company.”
On stock splits, he said that the company is constantly evaluating actions that would be in the best interests of shareholders and that the value of a stock split “isn’t so clear.”
Here is the kicker, it wasn’t until AAPL released a press release on March 19th, stating that there were going to hold a conference call that day to discuss their plans for cash distribution which included a $2.65 a share quarterly regular dividend (or 1.8% at the time) and a $10 billion share buyback.
TODAY’S SHAREHOLDER MEETING:
SO with the stock having already split by a third from the Sept 2012 highs, whats likely to happen today?? Nothing in my opinion, or nothing that will catalyze the stock higher. Any major announcement will come after the meeting as last year, aside from some possibly unexciting prposals and annoying questions by shareholders, we are not likely to get anything meaningful.
Could the board already have voted for a stock split, of course and would that announcement return any of the $137 billion cash to holders? NO. SO other than making more shares available to retail holders there is absolutely not economic impact on the company or the stock and therefore if the stock rallied on that as a trader I would think it is a sale. If the stock rallies hard in the next hour, and the news that everyone expects is not forthcoming, I would expect a quick sell off and the stock to likely close at new 52 week lows below $435 at some point this week.
BUT IF THERE IS NEWS AND IT IS BETTER THAN EXPECTED, THE STOCK COULD HAVE FOUND A NEAR-TERM BOTTOM, DESPITE MY THOUGHT THAT WE WILL SEE THE STOCK TRADE $400 AT SOME POINT IN THE FIRST HALF 2013.