Apple’s exceedingly bizarre valuation: Something’s got to give

“Amazon, by today’s valuation, is worth 80 Apples,” Phillip Elmer-Dewitt reports for Fortune.

“Facebook is worth nine,” P.E.D. reports. “Microsoft and Google are each worth roughly three.”

P.E.D. reports, “‘Something,’ wrote Jean-Louis Gassée in this week’s Monday Note, ‘will have to give.'”

Full article here.

MacDailyNews Take: We’ll be watching, too. Right after we back up the truck.

43 Comments

  1. Time to take the company private. If this stock is constantly downgraded(manipulated) despite REAL earnings… Time to move on…

    Less time answering Hedge Fund/Bankers. They can limit the time they waste on trying to please shareholders and Wall Street.

    What a better time to buy out, since everyone is betting against them…

    1. How long does Apple sit idle while its stock is pounded into the ground – aside from being a large shareholder myself, I would imagine several Apple staffers that receive stock options or hold sizeable positions may be losing confidence and getting frustrated, especially since their compensation packages are severely affected, I’m very confused with the constant silence of the largest company in the world – their PR department is simply put – awful !!

      1. Im as frustrated as any Apple share holder.
        But take into consideration that apple is in the midts of the largest share repurchase program in history of public companies .
        There may..just may be something there ……..

    2. Another moronic idea from a fanboy. Why don’t you explain how Apple going private will work, how much money this will require, and who will actually own Apple.

        1. He doesn’t because he is making the point that nobody has the resources to do that.

          Taking a company private is for when a company’s fundamentals are bad and removing Wall Street’s interference will allow the company to stop worrying about rough quarters in the near term and play a long game toward recovery.

          But Apple has a completely different problem. It is already playing the long game and Wall Street can’t stand it. Going private wouldn’t do anything except remove liquidity from investors.

          IMPORTANT: When the house is irrational, you can always beat the house, you just have to pay attention to how to do that:

          As long as someone is holding Apple stock for the long term, or buying cheap Apple stock now, they will get outsized returns:

          1) Higher dividends for the share price
          2) Outsized growth due to repurchases at a low share price.

          Buyers and holders win in this nutty situation. Only shareholders who want/need to sell some shares in the short run have reason to complain.

    3. Not this “take Apple private” nonsense again!! A group would have to bring in external resources on the order of $800B to $1T in order to take over Apple – a substantial premium over its current market capitalization.

      Please don’t even mention Apple “taking itself private” because that is not possible.

      1. One potential scenario does pose a danger. If Apple’s cash hoard continues to grow it could be used by raiders to pay down the debt incurred in a hostile takeover.

        I don’t think anyone would be crazy enough to pull such a stunt but it’s not outside the realm of possibilities.

      2. Privatization – a concept that a mindless, idiotic fanboy finds beyond comprehension. Gawd, these fanboys don’t have the mental wherewithal to tie their own shoes, but think that taking Apple private is as simple as shitting their panties.

  2. Of course for all those enjoying their quarterly dividends… I expect you to hate my “going private” comment.

    If they keep saying Apple is a “closed system” time to show them what closed means.

    I no longer own AAPL, which is probably why I have this opinion

    1. Of course those ENJOYING dividends invest for the long term and only they Enjoy this “closed system” benefit you idiot. Diidends are created exactly to support this long term investment in a company.

    1. Exactly.
      Not to mention every computer maker and cell phone maker that is being schooled in how to make a great product, is going all-out to spread FUD.
      Hmm, just like in the good old days when it was just Microsoft.

  3. From the start Tim Cook became more concerned about what Wall Street thinks about Apple than he does Apple, what diversity police think about Apple than he does Apple, what political correctness is for Apple than he does Apple, what LGBT thinks about Apple than he does Apple – Cook is the exact opposite of Jobs. Jobs just wanted the best f’ing people – Cook wants to fill some sort of quota BS.

    And that Charlie Rose WTF TV show that just aired? THAT”S what Tim Cook likes.

    Jobs, you picked the wrong guy in Cook.

  4. From the start Tim Cook became more concerned about what Wall Street thinks about Apple than he does Apple, what diversity police think about Apple than he does Apple, what political correctness is for Apple than he does Apple, what LGBT thinks about Apple than he does Apple – Cook is the exact opposite of Jobs. Jobs just wanted the best f’ing people – Cook wants to fill some sort of quota BS.

    And that Charlie Rose WTF TV show that just aired? THAT”S what Tim Cook likes.

    Jobs, you picked the wrong guy in Cook.

    1. He picked the right dude for that time… Idk anyone else that can run Apple like Jobs.

      At the very least, he knew Cook would be able to keep the supply chains intact and the books staying positive.

      Jobs just had a way of saying things at certain times that kept Apple stock moving forward. Let’s not forget though, AAPL did have down periods with Jobs despite iPhone sales.

  5. This is what I see. Apple is a very successful company that has some resilient to it. The “speculators” make their biased case to the public. They do it for Big investors. Think abou it. I will say something stupid like apple cut production in half! Stock Drops. Bug money buys 1 million shares. Stock goes up by 5 dollars Big Money Cashes in. 5 Million Gain, They say something else, Stock Drops, They buy 1 million again. Goes up 5 dollars Cash out again . it’s the Money Tree we all been looking for! There’s a catch. They know where the ebb and flow times are cause they create them!

    1. I get what you’re saying… I played that game in options trading… Win big/lose big…

      In the end, I still find their going private would actually simplify things for them…

      Imagine the effect on all the institutional traders/investors… Sadly, of course the individual holders of the stock or if their 401s own AAPL are affected as well.

      1. As someone already mentioned; going private (what DELL did a few years back) is a desperate, last-resort move that a company would do when it is on the ropes, bleeding cash, losing profits and market share, whose stock is dropping fast, with an intransigent board of directors, as well as angry shareholders, who demand a rapid turn-around. Such a company is under pressure to deliver quick short-term positive results, when a better strategy would be to play the “long game”, such as “Think Different” campaign that Jobs executed when Apple was 90 days away from insolvency.

        Today, Apple is the largest market-cap in the world. Its board of directors is completely aligned with the vision of the company’s senior management. Shareholders’ initiatives are largely ignored if they aren’t inline with this vision. The company has hundreds of billions in cash, and is generating record profits. In order to go private, Apple would have to squander all that cash and borrow three times as much, and for what? Nothing would change. Today, other than some buyback and dividends, Apple does nothing to appease the shareholders. There is no shareholder pressure on Apple, and as always, Apple continues to completely ignore Wall Street. In other words, there is absolutely NO meaningful pressure on Apple that would motivate the company to go private.

        Of all the public companies in the world, Apple is the last one to benefit from going private — nothing it does today is done under the pressure from the shareholders. There is simply no logical reason for this.

  6. The issue is Apple’s CFO Luca. Who is not only hard to understand on the conference calls (compare him with Google’s new CFO). He was not the right choice for the CFO position. Bizarre Apple chose him when they could get anybody.

  7. This AAPL downturn, I dare say, is all about everything EXCEPT Apple the company. It’s FUD and anxiety time on WallNut Street where the paranoia is high and so are the analcysts, high on coke and adderall that is. (0_o)

  8. Let’s have a 4 for 1 stock split.

    That would put shares at 25+ dollars a share.
    Surely there would be people that would buy apple shares at that price.
    You say that makes no sense. Why?
    Apple not to long ago had a 7 to 1, and then went on to do a buy back program. Let’s have more of the same. In order to do the buyback they are using others’ money. So what if it is borrowed money? Apple will just buy the institutions that loaned them the money and then restructure the debt. What the hey?
    It’s not real money. Not really. I mean it’s free money right? One percent on 10’s of billions, that’s no money right?
    Oh, course trading at 15, 16, 17 time earning, 17 times more than what the company could ever bring in makes sense. Ok, yeah, still can’t see that even when being sarcastic.
    Now, let’s keep the tax men off apple’s back, by now hiring large numbers of people in their country, placing in tax men’s mind that if you have us pay so much in taxes will will have to closed the facility in your country… it’s been done before, and by many, many others. Hey, it works on a state.
    There got to be some more silly things we can do, come on, think.

    1. Please, no. There are already ~5.5 billion shares. We really don’t need 22 billion. That just creates more overhead to keep track of them all, send reports etc. etc.

  9. I can’t think of another company that WOULDN’T want to be “run into the ground” like Apple while making the billions Apple does. So how do you define success if it isn’t something as crass as gobs of money? Or are you an inhabitant of the Bizarro World?

  10. It’s strange to watch the downfall of this stock. The term is “correction” but how many times and how low can it fall? Now today we saw a correction over 2% but I thought they’d done all correction “needed” for a alleged fall in iPhone sales? Nikkei reported a 30% reduction in factory orders on iPhone manufacturing. One would think that would be “baked in” as all positives always are baked into the current stock price. Shaving off one third on a company on loose speculations and loose rumors that is firing on all cylinders and making money like never before beats me. A stellar report on the 26th will mean nothing for AAPL but probably a fall: “buy on rumors and sell on facts”, right?

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