“Stop blaming Tim Cook for Apple’s (AAPL) stock price,” Ashraf Eassa writes for Seeking Alpha. ” While he isn’t exactly the most confidence-inspiring leader that the public has ever seen (Steve Jobs was definitely up there), and while there is money to be made in the short term by shorting the stock ahead of any of his talks, it is important for investors to stop blaming Tim Cook for not doing what needs to be done. He’s doing exactly what he needs to in order to keep the company performing as well as it can given the market environment.”
“Apple isn’t stupid. They know that the business is at non-trivial long-term risk, and I believe that is why the company continues to stash away such a large portion of its free cash flow as cash on the balance sheet… While I’m not of the opinion that Apple will need that money to stave off bankruptcy, and I certainly believe Apple will continue to be quite profitable, but if profitability contracts, then the best hope for the longs will be a massive pile of cash on the balance sheet in order to prop up the valuation,” Eassa writes. “This would give Apple the power to make riskier acquisitions, invest in organic initiatives to try to restore growth, and generally keep the stock price propped up. As an investor that likes to make bets on beaten down but cash rich names, I can tell you that many people like me salivate at the notion of real, cash-backed valuation support.”
Eassa writes, “That being said, I think that Apple’s massive free cash flow should allow it to pay a bigger dividend than it currently does, and it is in this respect that I agree with guys like David Einhorn. This is a stock that needs to be yielding ~3-3.5% in order to become truly interesting to the dividend (growth) guys.”
Read more in the full article here.
This is what I and others have been saying all along: Tim Cook has got to STAY.
Of course, he is staying.
Cook was not the reason why the stock fell or why they started to raise last year.
I mean both events had no rational reason: Apple was going flat with iPhone sales and revenue for few quarters in raw last year, and yet price share kept raising baselessly.
Then nothing new happened in late September and stock became falling for no reason.
That said, now stock price is reasonable since Apple promises to have about the same net profits as Exxon Mobil for the current quarter, and yet its shares prices cost higher. Because Apple’s real growth is still possible in the future (for not this quarter, according to Apple’s own estimations).
Apple should focus on products and not on shareholdervalue. This is not goal but is achieved by the best products. Apple is too much focussed on greedy hedge funds and investment bankers who are only interested in money and think they can do this because they own Apple shares and playing ball with other peoples money. Didnt we learn anything from this crisis?
Read my name backwards…
Agrred. Tim Cook is fighting a public relations war with the Apple naysayers that couldn’t get the public or the market to ignore Apple under Jobs. I smell Texas and Redmond money behind this.
Tim Cook needs to get out of the PR side and just focus on kicka$$ products. The consumers will do the rest.
Tim took the iOS pioneer master out of the picture. Bye Scott.
What is Apple today if it wasn’t for iOS. Bad move.
Scott turned out to be a danger to Apple and it’s reputation by not adequately informing Tim Cook of its still in beta Map issues. You blind-side a CEO like that and you get fired for good reason and it doesn’t matter who you are. Scott’s ego obviously got the better of him at Apple’s and their stockholder’s expense.
Steve took woz out. Woz was important at the time but doesn’t offer much now. Same goes for for Scott.
Steve did not take out Woz. Nothing could be further from the truth.
I love that anyone would so wrecklessly put the words “Apple” and “bankruptcy” in the same sentence. As if.
Don’t see why Apple needs to touch it’s treasure chest. Please don’t. Spend it on buying some great companies and new technologies.
I think that hedgies and others have purposely manipulated AAPL low so they can accumulate enormous personal positions of a dividend bearing stock… (the paranoid view)
the optimist view… AAPL is on sale and at this price is an attractive dividend stock, whereas at 700 $2.65/share dividend was not so hot.
As the national conversation switches to defense of the hapless CEO, then you know for sure that the problem has been identified. So, it’s a process of calling for his ouster vs calling for him to remain. Anytime a CEO gets caught in the middle of this conversation, his days are surely numbered. And, that’s a good thing for this once great company and its shareholders – even those who are invested when the price was in the tens of dollars to those who bought in at $700. No matter where you are, you can’t help but look at what you thought you were worth a couple of months ago and look at where you are now. And, for those who believe that Cook isn’t and shouldn’t be concerned about the value of the stock, where did you come from? Since when is the CEO not suppose to be worried about his shareholders. Stupid is as stupid does. Time for Cook to disappear into our rear view mirrors.
You sir, are the biggest idiot in the blogosphere. And I mean that in the most sincere way.
Mr. rdiddly – what have I said here do you take exception with? And, why? Trashing me in general makes you look stupid. Man up and get specific. Or, maybe you just don’t have any specific argument with my points. Maybe you just think everything is going to be just fine. You, my friend, are dead wrong. This thing is adrift so badly that nothing short of bringing in a new crew will get it going again. If you don’t believe that, say why? Or, can you?
Why do I need to get specific? Every one of your posts says the same thing. That Tim Cook is responsible for the price of the stock falling from $702 to $438 (or whatever was its recent low). How more specific do I need to get? You claim that, due to Tim Cook’s culpability he should be fired. I don’t know how you can say this in all seriousness, and, so, I suppose that you are right. I am stupid. But I stand by my statement that you are an idiot.
Are you lonely and need to reach out and argue with people on the internet? Your post is either trolling or a post for someone like Samsung or Google. It is time for you to disappear into our rear view mirrors.
“Anytime a CEO gets caught in the middle of this conversation, his days are surely numbered.”
Yeah, that’s why Ballmer got fired so many years ago…
BINGO! Dmitri FTW! : )
THANK you! 🙂
Yes and no about Tim Cook. The timing that created the delay and late delivery of the new revamped product line up is his specialty. The iMac wasn’t shipping until about 2 weeks prior to Christmas and end of the fiscal year for many companies trying to buy the computers before the cash was taxed at the end of the year. That was the short fall in the quarterly report in January that tanked the stock more than 10%.
And I searched many stores and BestBuy store to get my top end iPad mini and could not get it. Now I an sitting holding off for the upgraded screen this year. No rush now. I own 4 iPads and will delay my purchase for now.
This is Tim Cook issue. The entire Apple board could have supported the selling and shorting of Apple’s stock at any point over the last 5 months. They turned their back on the stock holders that lost 1 out of every 3 dollars invested in Apple’s stock. That was their fault. They had $1.37 billion to defend the stock’s value.
At some point, Tim and the Apple board may kick in and the stock will climb again only because the Apple Team will make it happen.
I am convinced that the next big thing from Apple will be a 3D HDTV that will not require glasses. Tell me what else would make as big an impact? I think I’m going to go so far as to say that the product will be launched either this year or next.
It will come with a tab of acid.
Wouldn’t that be cool? But seriously, who needs acid when you’ve got glasses-free 3D-HDTV? Just watching it will take me back to the 70’s.
How would that help Apple? Wall Street believes that Samsung can and will copy anything Apple builds, add more features and sell it cheaper which will lead to greater market share. Samsung already leads smart 3D HDTV sales, so Apple is starting behind in market share in that area. You don’t get it. The only thing Wall Street is concerned with is global market share growth. Nothing else matters.
AFAIK, all of Samsung’s 3D-HDTVs require glasses. You may not have noticed, but the aspect of the Apple 3D-HDTV that I described, and would make it better than anything else out there, is that Apple’s 3D-HDTV would be glasses-free, at least in my drug-induced dream scenario.
Apple is a corp that sells consumer products. It holds the number one position in sales in all categories save for legacy PC sales. Even in that segment, they are the only company to sustain year over year growth. 10 years age, Apple would have been quite happy with its installed user base of traditional computers. Now its position is light years beyond that goal.
Record profits, record sales, great efficiencies, passionate customers, buckets of media coverage (all media coverage is good).
Yup, Tim Cook should be shown the door.
Mr. tbone – all that was yesterday. Wall Street only cares about tomorrow. As soon as people realize that absolute reality, then more and more will begin to acknowledge the elephant in the room that needs to sent away. His name is Tim Cook.
The core problem with your clueless view is that you want Apple to behave like every other average company in existence – you want it to worry about its stock price, focus on the next quarter, and compromise its long term for the quick fix. These obsessions have destroyed many great companies all for the sake of Wall Street’s (and, apparently, your) ADHD.
As a stockholder who is long on Apple, I greatly prefer Tim Cook’s (and before him, Steve Jobs’) lack of interest in the stock price and their focus on great products (and please spare us your absurd babbling about cheap plastic gadgets).
Your continuous cries for others to join in your belief is evidence of how unsupported that belief is. Can you cite an independent source calling for Tim’s ouster other than yourself? My Google, Yahoo! and Duck Duck Go searches aren’t finding any.
And please do not claim that the stock price drop is evidence of your thinking. The simple fact there is that Wall Street has sold AND bought AAPL throughout this drop, a sign that they were taking profits AND still have faith in the company.
We still can’t really blame Tim Cook for Apple’s crappy share price value. There are plenty of nearly profitless companies outperforming Apple. If Wall Street has decided that Apple is worthless to them, then that’s how it will be. Apple basically makes products to sell to consumers and it’s doing that satisfactorily. Apple shouldn’t change its philosophy just because Wall Street doesn’t like Apple’s financial model. Apple can’t win a market share race against Samsung and Android and probably shouldn’t try.
I’m just thinking that the only way Apple can boost its share price is going outside of the hardware market. Acquire some cloud storage, search engine or media content company. Go after Google, Netflix and Amazon and hurt those companies. Force those investors to abandon those companies and come to Apple.
Right now, Apple is basically letting those companies stroll along without a care in the world. Apple should squeeze those smaller companies where it hurts. All three of those companies are making Apple shareholders look like idiots. Apple has the potential clout of being a 800 lb. gorilla, but has the aggressiveness of a little pygmy marmoset. I find it absolutely disgusting that Apple has no balls considering the cash reserve it has. So unless Apple intends on making some huge acquisition, use that money to stop the upstarts from lapping up all the gravy.
Why do people believe that in order for Apple to succeed, others must fail? I think this is a fallacy. Apple is doing just fine and will continue to do fine because they are the only company at the junction of liberal arts and technology. Keep the faith brothers and sisters. You will be rewarded.
For Apple its always been about the “show”. Apple creates something new or convinces us its new and we get “wowed”. Last year was the first time in a while that nothing truly wowed us. Some of this is Android, some of this is maturation of the products. To maintain these Mount Everest like stock prices is going to take more than revising existing products. Microsoft has only done revising of Windows and Office for the past decade. Until recently they kept making a profit. What is happening to Microsoft right now is what causes fear to investors. Has Apple hit its peak? I hope not but we are going to need a new product from Apple that we didn’t know we “needed” and no an Iwatch or ITv won’t do it. Its got to be “different”. Pun intended.
Finally, a rational comment. Thank you, Mr. nikcomp. Just one follow up: if Apple produces the “different” and “wow” thing you speak of with Tim Cook at the helm, I’ll take back everything I’ve been saying about his ineptitude. But, I have little fear that such a day will ever arrive.
It is so easy to say negative things about someone but do you have someone else in mind to take the helm of Apple? Perhaps you think that you are more capable than Tim Cook?
Why is it that Apple must create something new?
6 years separated the introduction of the iPod from the iPhone, and yet look what happened:
3 years separated the introduction of the iPhone and the iPad, and yet look what has been going on:
http://www.businessinsider.com/chart-of-the-day-apple-just-announced-awful-ipad-sales-2012-10
Recall that the “iPad is just a big iPod touch or iPhone without the phone”
So by track record it has been almost three years since the last market-disruptive product line was introduced, but every one of those prior market-disruptive product lines has gone through years and years of refresh iterations.
So on to the competition escalating. How many iPod killers were announced? How many iPhone killers were announced? How many iPad killers have been announced. To date, only Samsung phones have achieved competition with Apple’s offering. So go back to the iPhone introduction, where Steve said “we have a lot to learn” and talked about 1% of the market being the target. Apple hasn’t been out to corner the market and doesn’t need to when they’re cornering the profits in that market.
When Apple creates something new Samsung tries to copy it. When Apple “coasts” with product iterations, Samsung vomits out a plethora of variations hoping something will really stick, but ends up warning of profit pressure for the quarter we are now in.
I sure hope Apple introduces some new mind-blowing market-disruptive product because my life has been enriched by all the previous ones. But for Apple to be successful as a company it can continue doing what it has been doing at the pace it has been pacing itself.
Samsung wasn’t nipping at their heels every day back then. This is 2013. It’s a different time. As the world turns.