Jim Cramer: Arrogance of Apple’s management is what hurts AAPL shareholders the most

“Apple (AAPL) took a 63 point nosedive after management reported earnings. Cramer doesn’t think it was the declining gross margins or questions about market share that hurt the company the most, but the arrogance of management, which gave analysts the impression that the company doesn’t need to justify itself [via Jim Cramer’s Mad Money TV program on CNBC, Thursday January 24.],” Miriam Metzinger reports for Seeking Alpha.

“Cramer thinks that Apple is resting on its laurels because of its past greatness, and the once-growth company is now becoming more of a value stock; ‘Perhaps the guys at Apple don’t even care,'” Metzinger reports. “Cramer issued an open memo to Apple: Do something with your cash. Apple could be helped with a buyback, a dividend or an acquisition, but he doesn’t see much upside in the stock for the short term.”

Read more in the full article here.

Jim Cramer
Jim Cramer
Drew Sandholm reports for CNBC, “To Jim Cramer, Apple management better see this as a wakeup call. After all, Apple is the world’s biggest publicly traded company, but Cramer thinks the corporate governance isn’t acting like it. ‘Apple’s management needs to realize what everyone else has: that it’s a regular public company like any other, especially since the death of its founder, Steve Jobs,’ Cramer said. ‘And until it either stops being public or trades through its cash, management is going to have do a much better job of explaining itself.'”

“Apple currently has about $137 billion in cash on hand and Cramer thinks it’s outrageous the company has no plans to put that money to work. He suggested Apple’s management start an aggressive stock buyback program or offer a massive dividend boost. If management fails to tack such actions, though, Cramer fears things won’t be looking up for shareholders,” Sandholm reports. “If Apple’s corporate leaders don’t act soon, Cramer thinks shareholders will likely suffer more pain.”

Read more in the full article here.

93 Comments

      1. emotional trading and manipulation by the big boys pretty much whacked the stock… sure short term it may get even lower…

        But long term… they are just beginning to expand into China. And unlike Samsung… They dont just flood the market for the sake of market share – but Apple always has room to grow…

        When i use to trade… i would just go against Cramers advice…. AND TAKE IT TO THE BANK!

      1. He sure is a loud mouth arrogant idot.
        I watched him once and that was all I could stomach. His calls on Apple are like wind, never know what direction it’s blowing sometimes.
        Apple management arrogant? I don’t think so. I like Tim Cook and his crew from what little I know and I’ve been pleased as humble shareholder. Bought cheap years ago and sold high in Dec. went with my own gut feeling.

  1. Funny: I watched Cramer the night before the spectacular Apple report and he was saying NOTHING like this. Instead he repeatedly chimed the name of Apple Apple Apple as the ideal stock for investment.

    IOW: The guy is a hack that changes his opinion when a fetid breeze blows by. He wants to stink like the other AnalCysts do. So what is the point of his opinion at all? Maybe he should get off the amphetamines and clear his head for a few months. *WhaOOOga*

    1. Apple could be helped with a buyback…

      THAT does make sense. It’s an excellent way to minimize the lunatic Wall Street Effect on the stock while remaining intact as a brilliant, un-corrupted, NOT just-another-bozo-biznizz-company Wall Street clone. It makes the remaining, intelligent Apple share owners happy and is a nice FSCK-U to the ‘Apple Bear’ nellies.

    2. This is nonsense. Kramer has been on Apple for a long time, since it was about $50. He has recently soured on it, not completely, but talking about it not being a sell at this point, but also not a buy yet.

      There is plenty of truth in what he is saying. As a significant shareholder, I can say that I do not feel defended at all by Apple management. The key is the cash. What in H is it just sitting there for?

      1. No, the night before the Apple quarterly announcement he was entirely buy Apple buy Apple buy Apple. I maintain my point that he his opinion is nothing but a flag blowing in the fetid Wall Street breeze. So what’s it good for?

          1. HAHAHA!

            This is your form of masturbation, isn’t it! You FAP FAP FAP here at MDN in response to my posts, then oooo! Derek replied! SPOOGE!

            But here’s what’s really going on:
            You’re an ordinary MASOCHIST. You know that every time I reply to your STALKING POSTS, I’m going to point out what a troll tard you are. THAT is what gets you off. You HATE YOURSELF and I’m the best guy to provide you with your desired SUFFERING.

            Therefore, darn. I’m ignoring you. Oh dear! What will you do now? No more feeding the troll. No more spooge!

            My final wish:
            Become human poor stalker. Become human.

      2. The key is the cash. What in H is it just sitting there for?

        1) The future: New Apple campus…
        2) The future: An excellent hedge against an actual/real bear period in Apple sales.
        3) The future: Never again an ‘Apple’s gonna die’ period when anyone can remotely believe, without being on LSD, that Apple fell off a cliff.

        But as I say above, a stock buy back makes wonderful sense. With this kind of idiocy from Wall Street, I’d think they’d consider buying back the entire company. Screw Wall Street if this is their response to a RECORD QUARTER.

        1. A large, near term stock buy back or large, near term dividend is ABSOLUTELY NOT the way to go.

          What IS the way to go is use that money to fix all the supply chain problems, increase market penetration (address new and developing markets better) and increase IR&D.

          Cramer and many others here are just foaming at the mouth because Apple is not willing to give them large, short term gains (either in stock price or in dividends).

          Apple needs to be in this — intelligently — for the long haul. Screw the short term CRAP.

          Hedging and holding the money just in case the economy really takes a nose dive or there is a huge “bear” period on AAPL or if Apple has a couple products that flop is just plain stupid.

          Apple got to be where it is today by investing in having better products and having the best supply chain on the planet. Apple needs to start doing this again. That’s where the huge cash pile needs to go — and NOT into Cramer’s pocket.

          1. @shadowself: Some of your points make GREAT sense to me!

            But Apple is, and will continue to, wisely, keep MASSIVE cash on hand for THEIR rainy day, THANK GOODNESS. You’re deluding yourself if you advise otherwise. THE VERY DAY is a great example of why Apple keeps a big wad of cash on hand. Apple has everything they need to weather this STORM-O-STUPID and MORASS-O-MANIPULATION. Bravo Apple! Stick with it. You learned the important lesson of 1995 – 1998.

            All your other points are great. Thank you for cracking open my brain a little bit more, kicking me a little bit further outside ‘The Box’. 🙂

        1. Yeah, everyone said that dividends would help Apple’s share price stabilize and bring in more investors. WRONG! WRONG! WRONG!

          It got me a few more dollars every quarter but that’s about it.

      3. “What in H is it just sitting there for?”

        If they do something with the cash the same analyst will claim the sky is falling because Apple’s cash reserves are dwindling!

        1. With this gang of Wall Street wolves, EXACTLY.

          I wonder if Sarah Palin could lend Apple her wolf killing helicopter. Joking. I know perfectly well that these dickheads are self-destructive and all we have to do is watch them kill off themselves. Apple knows: Success is the best revenge.

  2. apple’s biggest flaw is sitting out of the worldwide smartphone market in the $300 range.

    iphone 5 vs S3 i’ll take my 5 any day. but if i had to pay full price for a phone in the $300 range i would probably take something like the Galaxy S2 or one of the other android phones

          1. The truth is, I am right.

            What makes you think the phone companies have the money to give away millions of “Free” phones? The same companies that nickle and dime phone features (tethering?), charge overages, and meter bandwidth? Yeah, they also have a free lunch just for you!

            Open your web browser and your mind and learn something today..

            1. Name me 1 plan that is cheaper if you OWN your phone. It still costs the same for the plan even if you bring your own phone.

              So you do get a FREE phone. Yes, the cost is in the contract….but you pay that cost even if you bring your own phone.

    1. Both phones you compare sell for about 699.99 – what are you talking about. Both phones also can be part of a contract – hiding the cost over time… and if you do the math you will see you paid about 1,299.99 for the phone.

      I dont care what phone you buy. But remember Apple’s phone is upgradable – extending the devices life with new use, features and protection. There are better and more apps for the Apple product. More people use the Apple product. Its far easier to use. Its a solid phone. Life has choices. Sorry if you picked wrongly.

    2. apologies, i think i misunderstood you.

      I believe you are hoping Apple makes a second tier phone, a less expensive price range, a more basic lower costing phone.

      as Derek Currie points out – Apple has offers to cover that price range, a iPhone 3Gs, 4 or 4s to me are not obsolete mainly because AGAIN the Apple product has an upgradable os. Compare that to the junk in the android market… Samsung Galaxy Ace is not that old, but sells with Android 2.2.1. its dead at day one. The processor sucks, its non-upgradable, over 40% of the new apps can not be installed for it. Ugly situation Samsung and Google has created.

  3. Oh my. Cramer said apple needs to jump and spend more of its money. What do they think they are? A successful business? They are just failing miserably in their gameplan. I mean $54.5 billion. Is that all? Cramer knows how to run a business, right?

  4. Totally agree with Cramer. Apple is trading at a PE discount to floundering MSFT for one reason. investors want returns. With flat growth rates and no plan whatsoever to return any of the money they are hoarding there’s no reason to own the stock. They need to innovate beyond incremental upgrades to existing products OR start returning money to shareholders.

    Hearing Tim Cook say over and over they are focused on making the best products in the world makes me want to puke given that Apples biggest innovation since 2007 is changing the screen size. Whoopty freaking do. If they are laser focused on making great products and that’s all they can come up with we are in trouble.

    Where’s my PICO projector? Where’s my 3d tv? Where’s my enterprise software suite? Where’s my NFC payments? Where’s my hybrid Mac/ iPad?

    This is innovation. Making the same widget with different screen sizes is weak.

    1. “Where’s my PICO projector? Where’s my 3d tv? Where’s my enterprise software suite? Where’s my NFC payments? Where’s my hybrid Mac/ iPad?”

      They’re over there – right next to the Apple netbooks.

      Just because other companies come up with stuff that doesn’t catch on, it doesn’t mean that Apple has to as well.

      1. the iPad mini, does seem to make people think Apple can copy Samasung 7″ tablets. But again, Apple has done it so so very right. it’s an iPod Touch Big with better options.

        the only thing i wish Apple would do — is each year, offer the latest processor to all their devices at the same time.

    2. GP, i agree that RETINA screens are not the best innovation for most. slight screen size again was not such an amazing feat. but the cost to bring these improvements and the engineering behind all of this — is the magic that we all do not seem to appreciate – instead the droid fans love eye candy and messing up a ui… this is called innovation? making a screen bigger means the battery can be bigger samsung too the easy road

    3. You know nothing about innovation, and clearly do not get Apple. Enjoy your samdung products lemming..

      “Return the money they are hoarding” UMM, it is APPLE”S MONEY, they earned it. To whom should they return it?

      I own nearly 200 shares, I neither want, nor deserve a huge dividend check. I bought Apple in 2000 when it was dirt cheap, my investment has doubled repeatedly. What exactly entitles me to any more? Talk about entitlement mentality. This nonsense call that Apple needs to spend the money or give it to investors is insane.

      Listen a little closer, let me translate what Tim is saying for you: Apple is not an also ran, we do not need or want to be in every market. We are focused on building products that enhance your life and the eco-system we have created. If it is low margin or doesn’t fit those parameters, we are not interested. We got here by being different and through innovative world class products, we don’t intend to sell out to wall street shills and change who we are to make them a buck.

      You want a pico projector, buy one. Niche product, not coming to an iPhone anytime soon.

      3d TV? Are you serious, did you pay attention to CES this year? 3d is dead, people don’t care. Give me a break..

      NFC payments are also on the “not ready for prime time” list. When it makes sense, Apple will jump in and fix it. Right now it is a mess, with competing standards and no real wide scale adoption.

      NONE of that is innovation, Pico and 3d are gimmicks, they do not enhance my life. Why the hell do I need a pico projector when I have a 55″ HDTV with an Apple TV attached? AIRPLAY is the solution, not a gimmick to run my battery dead. Are you going to stop your press or show every time the phone ring?

      1. Truth
        I wish you well on your ivenstment, and owning some AAPL stock myself, I find that Apple’s lag in giving what many customers…non cult members like, isn’t a bad idea. Having recently switched to a Note II from iphone, I find your running down of Android a bit overdone. My Note II shames the iphone 5 in all respects except for someone desiring a small phone. NFC works fine with other phones, split screen works well, and I find the Android experience very easy to learn and switch from Apple. I love watching video on the Note II, and I will say that Samsung understands that big screens and a generation of video and game players keep their phones on with screens lit up for hours on end. My iphone needed to be attached to a charger half the time if I used it heavily. I can pop battery right out of my Note II, put in another (cost $7.50 with charger) and am on my way for another day and a half before charging. I have a micro SD card in mine and so now can hold loads of stuff. No options with Apple except to way overpay for a phone with memory and no answer for the battery problem. Everything has worked for Apple with their high priced phones and accessories, but they will need to compete now in the world where folks don’t have “Apple” money and will buy with price in mind. The new Samsung S4 will shame the iphone so bad that anyone paying more for an iphone is just a cult worshipper IMO. HTC makes great phones also. Apple will find more competition and that will good. They might put out a large screened phone, but IMO this would qualify them as nothing more than a “slavish” copier, which was the term given Samsung for copying a rectangle with rounded corners. It will be interesting to see how things fold out in the future. Google’s new phone is expected to be quite good also, and Google will update their phones just like Apple does for IOS so, APple’s argument about not getting updated will be a moot point with Google. Anyhow, hopefully our shares will recover a bit. Good luck.

      2. @ “Truth”

        sir, you spewed opinons, not truth. please learn to understand the difference.

        GP does have a point — Apple has not offered anywhere near the market-creating innovation in the last 3 years that it did in its prior decade. Meanwhile, Cook and Co have revealed nothing to indicate how Apple will fend off the competition. The repeated promise of new exciting products while half of the product range is stale, buggy, or supply-constrained does not engender much confidence.

        Apple does remain the best company — but its rate of innovation under Cook has slowed dramatically.

    4. What has Apple done since 2007? Oh, right, they created an entire industry that changed personal computing for generations. The iPad.

      What has Microsoft done? Oh, right, pissed off and disappointed their customers, as usual. What has Google done? Oh, right, hoarded and used its customers personal information for financial gain, upgraded their dessert flavors, and worked on developing a product that will massively INCREASE our unemployment problem. The driverless car. Do no evil. RIght.

  5. I hope the Apple management stay arrogant for as long as it takes and keeps the focus on world beating products not shareholders.

    People buy excellent class leading and premium priced products which makes the return for the shareholders. If the shareholders don’t like it go invest you lazy money elsewhere as there will be plenty of others to take your place.

    But If the shareholders think they know better than Apple do please set up in competition and do all the things you would have the Apple management do. Let’s see how far you’d get, eh?

    1. Nobody is saying that anyone BUT Cook and Co knows what is best for Apple, but to simply not treat shareholders as second class citizens. WE are the ones providing the capital that allows the company to even exist. I don’t believe anyone is even asking for a very descriptive answer on what their plans for cash are, but it would be nice to hear generic musings at the very least.

      If you took $100,000 to an advisor and told him to build you a technology portfolio and it consisted of $30,000 of cash earning nothing (with no apparent reason for holding it), you wouldn’t be thrilled either. Same concept.

      I trust Cook&Co with my money. But it is head scratching material when they’re generating tens of billions of free cash flow annually on top of what they already hold and give no direction. We’re past the point of “well, maybe they’ll use it for acquisitions”….$135 billion darn near buys industries.

      1. When you buy Apple stock, you are not giving Apple your money.You are not providing the capital that allows the company to exist. Get over it. You’re investing in the stock. If you were buying an IPO, it might be different.

      2. Talk about entitled. YOUR cash is what ALLOWS Apple to succeed? Somehow I doubt that.

        Second class citizen status? Hyperbole, Apple has NEVER, will NEVER, announce their future plans. It would only helps the competition and leave room for disappointment. Apple announces products that ship, when they are ready to bring them to market. The market reacts, poo-poos the idea and then it is a wild success. Get used to it, it is how they operate. Be thankful they aren’t Microsoft, always blathering AWAY, NEVER SHIPPING, ALWAYS DISAPPOINTING.

        I own about 200 shares, I bought them in 2000 for less than $50 bucks a share. It is now worth just over ten times what I paid. Tell me again how I am entitled to their cash horde? I could have sold when it was much higher than today, I could ride the stock all the way to $100 and still make money, but I am holding it for the long haul.

        Thats the problem with “investors” like you. You are IN solely for quick cash. Why should they treat you special? They are not there for the cash, they are there to change the world and push innovation and technology. You are little more than a parasite to them.

        Apple is the ONLY computer manufacturer making money. They have the best products, they have brand loyalty, they have a wonderfully integrated eco-system. And idiots like you cry because your wallet isn’t getting fat enough, fast enough. Go look at Dell or HP if you think Apple is doing it wrong.

        I will never understand why anyone would soak their money into Apple and expect to change the way they operate without destroying their investment. They are different and it is a huge part of their success.

        It is fascinating to me that Apple saving it’s money is a bad thing. It is a safety net, a huge club that they can wield. It is their future security, not a cash grab for a bunch of entitled traders.

        1. My goodness, someone has zero knowledge of basic corporate structure. Shareholders are the owners. Period, end of sentence. That’s not my opinion, that’s a fact. Whether it be Apple or a small family business. SEC regulation also exists to defend the number one goal of a publicly held corporation of “increasing shareholder value”.

          PS – my cost basis is lower than yours and I still have the //e I grew up on sitting in a closet. Your entire premise is false and uneducated.

          Read a book.

  6. Apple’s cash hoard is invaluable, as both an offense and a defense. I would not spend or acquire needlessly. I believe they did just announce a dividend. They are performing brilliantly, with incredible growth and profit margin. They lead the market in innovation, product quality, and customer satisfaction. For the past 15 years or so they have released a game-changing product about every 3 years – an amazing feat. Their leadership is generally recognized as being outstanding. Nobody knows what tomorrow holds, but I think it’s a stretch to criticize the company on almost any front right now. On the other hand, investors and analysts are due almost nothing BUT criticism and skepticism. Both this opinions are simply based on several years of history showing consistent outcomes right up to today. I think Cramer is wrong top to bottom.

    1. Well said. Some think money can buy innovation immediately. Apple is absolutely working their ass off to make quality innovation that will change tech industry once again. They will patiently release it when ready, even if some unrealistic idealists are not

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