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. First I have to say. I love Cramer. But his “aggression” or lack of understanding against Apple as if late has irritated me. It seems that every one is turning on Apple now when it’s going down. No one was attacking the company when the stock went up and now when it goes down no one is defending it every one is lining up to Locke it with a stick. I find it ridiculous. If the stock went up Cramer would justify it with that the company is so great so they can be arrogant. I don’t get it. Still love you Cramer but on this one you are following everyone else. I guess Apple have to do something with its cash but one of Apple’s strength has been its conservativeness with its cash. But now when they are spending 9 billion over a whole year on equipment it seems to upset analysts. Buy back would be a horrific idea. A dividend is much better. Mister Tim SHALL NOT bend for all the analysts and people on Wall Street and in the press. He has don’t so more than Jobs did, too much. He shall be focusing on products shun the analysts away like Jobs did. I think Tim let the guard down a little when it comes to the analyst cmunity and now they feel energized buy their newly gained influence over Apple and its going to their head. This is not good and I think it’s hurting Apple. Costumes and products should come first for Apple. Apple is a public company but they have no real responsibility to the street in my opinion. They have tagged along benefitting from Apple’s success and SHALL NOT COMPLAIN about anything or sell the shares and buy some Goodung stock instead.

  2. Glad that Apple is also conservative with paying out dividends to its “shareholders”. Please wait and let enough short sellers leave before doing a more sincere exercise to those who are really sharing with your business philosophy. .

  3. It’s not Apple’s management that is hurting AAPL, it’s the arrogance of the analysts that is hurting AAPL.

    It’s quite obvious that Apple doesn’t see the need to justify itself to analysts and that clearly pisses off the analysts, but if the analysts managed to behave in a sane and rational manner, then there might be a case for listening to them. As things are, the analysts have turned into a hysterical mob and are incapable or unwilling to see what’s actually happening for real.

    There is a clear distinction between Apple ( which is doing very well indeed ) and AAPL ( which has been manipulated by traders ).

    I wish there were a way to invest in Apple as a company without having to buy AAPL stock. The stock is subject to the lunacy of games played by short term traders and is influenced more by rumour than results. I want to be an investor, not a trader.

  4. They’ve been saying this exact same thing about AAPL forever. Steve Jobs was the most arrogant SOB that ever walked the planet, yet I think he knew a thing or two about running a corporation didn’t he?!? Wall Street and Cramer can shove it, they’re nothing but manipulating hacks….

  5. What is so wrong with keeping cash until you have something you actually need to spend it on?

    So Apple should just make an acquisition because it has too much money in its bank account? Stupid.

    So Apple should buy back its stock just because it has cash on hand? Stupid.

    Apple has plans for its money, it just hasn’t told Wall Street what those plans are yet. And because Wall Street is kept in the dark, it doesn’t like that and therefore it punishes Apple.

    1. But what you and others aren’t fully grasping is that shareholders OWN the company.

      An employee at an ice cream shop can’t lock the owner out and not tell him how they are running the shop. The owner has a right to know. Obviously very drastic differences and there is value to Apple’s secrecy, but at some level shareholders do deserve a general sense on a company’s strategy.

      1. The board of directors is the stockholders representation. They know the company’s strategy quite well. If you don’t like the direction the company is going vote in a different board to represent your interests. Or you can sell your stock and support a different company.

        1. I”ll acquiesce to your BoD point. Until a shareholder stands up at the annual shareholder meeting and asks about cash and we’ve given the standard “no comment”. 1/3 of the company is a black hole right now and I don’t blame investors for being upset at the lack of transparency. You may be technically right, but that’s part of the reason AAPL is trading at a 10x multiple as one of the most successful companies in the history of the world.

          At what level does the cash pile become a burden? Half of the company’s market cap? If Apple doesn’t grow profits and stock price keeps present day valuations, that’s just a couple/few years away.

          It’s a great problem to have 🙂

  6. What Cramer means, is that apple management refuses to show up on his show! Here even projects using his daughter. After AT&T reported 85 percent iPhone dominance, he knows better than to use his daughter again.

    Bet you if they send I’ve to his show that it will be such a coup, that Cramer will come out blazing for apple.

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