Apple bought back a record $23.5 billion shares on the cheap in Q1 as Wall Street naybobs nattered negativity

“Apple silently bought up a massive $23.5 billion of its own shares off the open market in the March quarter, taking advantage of the ‘full panic mode’ agitated by analysts and financial news sites who bizarrely wondered aloud for weeks when exactly Apple might ‘kill’ the most advanced, commercially successful smartphone it has produced yet,” Daniel Eran Dilger writes for AppleInsider.

“Apple began buying back shares in 2012, paying market prices for its stock and then destroying those shares,” Dilger writes. “That process makes the remaining shares in the company more valuable, effectively returning the value paid to shareholders. This benefits outside investors in the company, as well as its employees who hold shares. It also enables Apple to recruit talent because it can offer valuable stock options. Buying back shares is effectively an investment in the company itself.”

“Since 2012, Apple has spent a total of $199.6 billion in share buybacks. Over the past two and a half years, it has paid between $6 and $11 billion per quarter on both open market and Accelerated Share Repurchase programs to buy its back stock. In the most recent quarter, however, Apple spent an astounding $23.5 billion on stock repurchase, more than twice its recent pace,” Dilger writes. “Apple’s $23.5 billion stock repurchase — in a single quarter — is nearly 8 times the size of its largest-ever acquisition (Beats)… While unprecedented in sheer scale, Apple has previously dropped massive coin on quarterly buybacks after analysts dragged the company’s stock down with irrational fear mongering, often rooted in panics built on channel check mumbo-jumbo.”

Read more in the full article here.

MacDailyNews Take: What mechanism stops Apple from dropping, or having their suppliers drop, some negative news here and there for mouth-breathing analysts and pundits (who love to extrapolate all sorts of theories from single data points) to run with order to further depress the share price facilitating even greater buyback success? The lower the share price, the more shares Apple can retire.

Surely there are laws against such a thing, but could they ever really be proven and/or enforced? We assume Apple’s sense of morality stops them from undertaking such dastardly deeds, but what about other, lesser companies running significant buyback programs?

Well, regardless of the source(s) of the ginned-up “Apple is doomed (despite all evidence to the contrary)” phases that we seem inevitably destined to endure, the good news is that if you can see the pattern, you can profit from it.

22 Comments

    1. Sounds to me like Apple leaked misleading data to analysts on purpose. This allows Apple to buy its stock at a lower price. Wall Street wins, Apple wins. Small investors get screwed, but of course when did Wall Street or Apple ever care about the individual investors? Plus the icing on the cake: because Apple’s financial games are artificially holding stick valuation down, this gives the board an excuse to give the old boys club more stock options next year, you know, because they work so hard and the stock isn’t worth as much as it could be.

      Watch as Cook and his buddies preside over a sudden wave of stock gains driven by leaked good news from analysts right after Apple finishes its buybacks or right before Cookie retires. Typical corp.

      1. I’ve seen zero indication that this is the case. If you have been actually reading the Apple Bear Bullshit being excreted from tech analcysts late, you know it’s all based on either unverified garbage or blatant fabrication. None of it is referenced to Apple.

        That’s not to say we shouldn’t keep a beady eye on Apple, considering their remarkable pile of recent Apple Bungles®™.

  1. Re: MDN’s Take- I was just thinking the same thing- Apple could easily have suppliers leak true but misleading “news” about production to make their shares cheaper. The TRULY strange thing is that these “pundits” and “analysts” NEVER learn! Unless they’re in on the game? Anyway, now you know too! 🙂

    1. Well, i hope Apple did that, they used the Wall Street idiots and made of fool of themselves. These Wall Streeters certainly fell for the bait and got caught out with their pants down. BWAHAAAHAAA. While Apple made a good killing buying its own shares on the cheap. SWEET

    1. Since such things as skin color are obviously in play for criticism from you, I’m sure you’ll enjoy a bit of visual humor regarding looks and brains:

      I love loony TDS leftists who scream “racist” at the drop of a hat while puking “orange”, “agent orange,” “cheeeto dust” and the like at the President.

      I wonder what you’d call someone if they ever referred to Obama as “half white,” “cafe mocha,” or “chocolate covered?”

      In short: STFU, you unhinged hypocrite.

  2. I don’t agree with MDN’s take. It isn’t necessary for Apple to ‘leak’ rumours to depress the share price in order to pick up shares cheaply. Analysts and journalists have been circulating false rumours about Apple and manipulating the stock since long before 2012 when Apple started buying back it’s shares.

    If people are prepared to sell AAPL when the price has been artificially depressed then more fool them. Investors are rarely in a position where they really must sell without delay and smart investors would never sell during the mayhem just prior to the announcement of financial results.

    Short term speculators may feel the need to trade more urgently, but I have no sympathy with such parasites.

    When there has been a very clear pattern repeated over dozens of quarters, you would have to be mad to ignore it, but the evidence is that huge numbers of traders are oblivious to that pattern and imagine that it’s really going to be different this time.

    1. You don’t disagree with MDN’s take. You just don’t know how to read.

      MDN did not say that Apple “leaks” in order to depress share price. In fact, MDN assumes exactly the opposite. Therefore, you agree with MDN’s take.

      1. MDN’s take speculates about the possibility and asks what mechanism prevents it. They go on to say that they hope Apple’s sense of morality means that they are not doing it.

        The point I was trying to make is that there is no reason for Apple to do such things because these false rumours and share price manipulation practices happen anyway and predated Apple’s buy-back scheme.

        I’m pleased that Apple ( and shrewd shareholders ) can turn this sort of situation to their advantage, but there is no need for Apple to get up to such chicanery and much to lose if it were caught doing so.

        However there are other companies and their paid supporters who have quite a lengthy track record for spreading false rumours either to their advantage or to negatively impact a rival’s products and there appears to be no mechanism to prevent them doing that.

        I think it would be better if companies, analysts and journalists stuck to the truth, but in the real world, that’s never going to happen. I would neither want nor expect Apple to stoop to that level because they are already winning handsomely by taking the high ground.

  3. The MDN take “We assume Apple’s sense of morality stops them from undertaking such dastardly deeds, but what about other, lesser companies running significant buyback programs?” points to potential activities of less ethical companies but it also suggests the possibility of another dastardly deed, and that is the accusation that Apple is doing exactly what MDN is proposing, getting the share price to drop so that it can buy back stop.

    Now I don’t think that Apple is doing this but to be accused of this by some really unethical entity is possible and that would be a pain. Now who would have less ethics, morals and brains than the analysts out there?

    What entity would be that stupid?

    “Because we’re so stupid”
    -Donald Trump

  4. Scott Adams did comics about in-duh-vidual investors, honest, hard-working, but clueless souls who actually believe there are still equities “markets”. We’ve all been played, going on a decade now.

    1. Speaking of kickbacks…

      Russia routed millions of dollars to America with the expectation it would be used to benefit Bill Clinton’s charitable efforts while Secretary of State Hillary Clinton quarterbacked a “reset” in U.S.-Russian relations

      An FBI informant connected to the Uranium One controversy told three congressional committees in a written statement that Moscow routed millions of dollars to America with the expectation it would be used to benefit Bill Clinton’s charitable efforts while Secretary of State Hillary Clinton quarterbacked a “reset” in U.S.-Russian relations.

      The informant, Douglas Campbell, said in the statement obtained by The Hill that he was told by Russian nuclear executives that Moscow had hired the American lobbying firm APCO Worldwide specifically because it was in position to influence the Obama administration, and more specifically Hillary Clinton.

      Campbell stated, “The contract called for four payments of $750,000 over twelve months. APCO was expected to give assistance free of charge to the Clinton Global Initiative as part of their effort to create a favorable environment to ensure the Obama administration made affirmative decisions on everything from Uranium One to the U.S.-Russia Civilian Nuclear Cooperation agreement.”

      Campbell wrote that Russian nuclear executives “boasted” during vodka-fueled meetings monitored by the FBI about “how weak the U.S. government was in giving away uranium business and were confident that Russia would secure the strategic advantage it was seeking in the U.S. uranium market.”

      He also said he asked his FBI handlers why the U.S. was not more aggressive.

      “I expressed these concerns repeatedly to my FBI handlers. The response I got was that politics was somehow involved,” he stated.

      Campbell, whose work as an informant was first disclosed in a series of stories published last fall by The Hill, helped the FBI gather evidence as early as 2009 that the Russian nuclear industry was engaged in a kickback, bribery and racketeering scheme on U.S. soil.

      – John Solomon, The Hill, February 7, 2018

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