“Over the past fifteen years, both Apple and Microsoft have invested in Apple, while Microsoft has also invested in itself. Here’s a look at how those investments worked out, with particular attention to stock buybacks, a panacea certain billionaire investors are prescribing for Apple,” Daniel Eran Dilger writes for AppleInsider.
“A decade ago, Steve Ballmer’s Microsoft’s demonstrated no faith in Steve Jobs’ ability to turn Apple around, effectively walking away from an $11.5 billion opportunity,” Dilger writes. “However, in 1999, just as Microsoft was getting ready to bail out of its purported ‘bailout,’ Apple’s board of directors authorized its executives to perform up to a $500 million stock buyback. Apple’s shares were around a split-adjusted $10 per share, but shot up to $34 per share at the height of the 2000 dotcom boom before crashing back down to around $10, territory where it remained for the next three years.”
Dilger writes, “By 2003, Microsoft had sold its remaining AAPL shares while Apple had acquired 6.55 million of them for $217 million under its stock repurchase plan, or about $16.50 each relative to today’s share price. At the end of that year, it looked like Microsoft had been smart to get out when it did, while Apple’s buyback appeared ill-timed. Following Apple’s 2005 stock split and rapid growth since, the current value of those shares today would be about $6.6 billion, representing a 3000 percent return on investment…”
Much more in the full article here.
You’re only as good as your last product line. That’s nothing new. Besides, Microsoft’s woes and failures don’t make Apple a better company, only Apple can decide Apple’s fate.
I just wish I had sold my shares in September and repurchased them in January.