858 posts • joined 10 Mar 2008
Icahn lets himself down
"if the company decided to borrow the full $150 billion at a 3 per cent interest rate to commence a tender at $525 per share, the result would be an immediate 33 per cent boost to earnings per share, translating into a 33 per cent increase in the value of the shares."
Yes, there would be an immediate 33 per cent boost to EPS, but I doubt if this translates into a 33 per cent increase in the value of the shares. For the reasons I have outlined above, the share price will actually fall. Just like any share does when it goes ex-div.
Icahn is simply perpetuating a well known myth in financial markets called 'EPS Bootstrapping'. Again, emprical studies have shown, ad nauseum, that investors are not fooled by such 'spectacular' EPS growth from one-off financial conjuring.
It's a shame he's done this because is overall message (paying out the excess cash will increase shareholder value) is bang on with the empirical evidence. Making yourself look stupid by resorting to a disproven and totally ineffective Jedi Mind Trick, does his cause no "favors" (sic.).
His point is: they could be more valuable.
See my previous post for an explanation as to how.
What he's saying is: Apple, you're in the computing business, not the investment business. You have (had?) a fantastic track record in the computing business and earned returns over and above those of your competitors. But not so for your investments. You have not shown an ability to invest excess cash and earn risk-adjusted returns that are superior to those of the professional fund management industry. You do not even have a Board member who has such a track record. Therefore, give the shareholders the excess cash so they can invest it for themselves. You are not doing them any favors (sic.) by denying them ability to do it while at the same time earning them a non-superior return.
Using your cash to buy back your shares already sends a bad signal to the investors
No it doesn't. On the contrary, numerous empirical studies have shown that share buy-backs increase shareholder value. Look through the 1970s and 1980s editions of the Financial Analysts Journal, the Journal of Finance and others if you don't believe me.
This is because cash on deposit earns an interest rate lower than the rate of return the company is getting from its core business. Therefore, the weighted return being earned is being suppressed by the low interest rate on the cash. Shareholders can deposit cash themselves so they don't pay management a premium to do it on their behalf. Instead, the share price is depressed because of the lower than otherwise weighted return. Return that cash to the shareholders and two things happen:
1. the share price drops (because the cash-backed portion of the share price has just been returned to the shareholders); and
2. the share price increases (because future 'weighted returns' will be higher);
These two movements happen at the same time. The observed result is that the share price falls by less than the amount of cash that's been returned, ie. the shareholder is better off: his portfolio of shares+cash is now worth more even though the share price has 'fallen'.
So why hasn't Apple done this already? Because of US Tax laws. US companies with highly profitable foreign subsidiaries in tax jurisdictions that have a lower tax rate than the US, eg. Ireland, find it next to impossible to repatriate that cash back to the US without paying to the IRS, the difference between the two tax rates. Paying taxes reduces shareholder value. The pre-tax profits a company earns get split 3 ways : tax payments to the IRS, interest payments to any bond holders and then whatever is left goes to the shareholders (either as a cash dividend or retained in the company to be paid out later). The more tax the company pays, the less available to the shareholders. This problem has always been there for Apple. It's just that shareholders are now beginning to take more notice of it because the outlook for Apple is not as rosy as it was when Steve Jobs was around. While Steve was there, shareholders didn't care too much about the repatriation issue, because Apple was so profitable and looked as though it was going to continue to make stellar profits for its shareholders. Now that he's gone, everyone is beginning to question the future 'stellar' profitability of Apple. People are looking around for more value and the repatriation of foreign profits issue has taken on greater importance.
That's why shareholders want Apple to find ways of repatriating the cash without paying any more taxes.
Re: So you want a Dom Joly iPhone?
Like those people you see holding up their tablets to take a picture. LOL. The sad bastards.
"Apple now has a potent stick with which to beat Samsung through the courts."
The last time I looked, it was the Legislature and Judiciary that make the laws, not the USPTO. This latest "win" [sic.] by Apple is pointless. With widely held concerns over the company's overall direction (or lack thereof) , they should be focusing more on the future rather than dwelling on past glories.
"Third parties may provide ongoing support for their applications, but it’s important to recognize that support will not address fixes and security patches in the core Windows kernel so new vulnerabilities can still be exploited even though applications might be updated," Microsoft told El Reg in an emailed statement.
After 12 years they've still got bugs in the kernel? Not only that, but they try and use it as an argument against their biggest competitor. Weird.
Re: Focal is a great capera app
Did the the Linux kernel developers get pissed at CM going commercial? I don't think so. Did the BSD devs get pissed with OSX? Again, no. The answer is in the licensing. If a dev is going to release their code under the wrong license then that's their fault.
Kiss and tell tramp
He's not around to defend himself against her allegations, the cheap tart.
These are not the droids you're looking for.
BB is not failing? You don't have to be a rocket scientist to know that BB is a dying platform.
People are just ignorant
He doesn't live in the UK. He doesn't use any UK public services. Why the fuck should he pay UK tax on his non-UK source income?
This whole tax avoidance "debate" has been hijacked by the ignorant and uninformed.
Re: Doing things right
Its vapourware. Im reserving judgement until it exists.
Re: "Ms Dyson. Ha! Ha! I wonder if she invented the hoover. Ha! Ha!"
Yes, I did find myself laughing at that one - AT THE IMPOSSIBILITY OF IT!
A Dyson can never be a Hoover, in the same way that a Ford can never be a Toyota.
Ford and Toyota are brands of automobile.
Dyson and Hoover are brands of vacuum cleaner.
Oh the impossiblity! Ha Ha!.
Intel tells Ubuntu to go and get fucked
"[Wayland] which was designed in 2008 by Linux kernel engineer Kristian Høgsberg who is now a software engineer at Intel."
I guess he didn't want to work on someone else's code. I can't say I blame him. If you know your own code, why bother with someone else's that aims to do the same thing?
Is ZeroAccess like the Brain-Bug in Starship Troopers?
And Starbucks are still trading. I guess Peggy Hodge's outrage was just grandstanding after all. Ergo: the majority of taxpayers just don't give a shit.
"Some readers have expressed concern at Florian's impartiality"
That's being overly generous to Mr Mueller. He's a spin-doctor for hire. That's all there is to it.
I guess some people always have to have something to complain about.
Not owning (nor desiring to own) an iPhone, I can't see what all the fuss is about.
They sold themselves to Apple when they entered the walled garden and started to invest in iOS.
Apple pwns them. Apple can do what it likes with them. Peak Apple.
Re: Shitting hell - someone actually managed to patent
"I'm not what on course".
one swallow doesn't make a summer
No one at Apple is talking about the 5C. Why would they.
Comparing the non-£ differences between the 5S and the 5C I came across this beauty:
"Backside illumination sensor"
It sense when someone is mooning you. LMAO.
I don't know who's sadder: the people who queued for > 5mins or Apple for having those signs ready-made.
Either way: SAD BASTARDS.
All this talk...
of 'backends' and 'frontends' has put me in a quandry - should I go for a slash or a dump?
"after four men appeared in court earlier this month"
And to think there are still people out there who don't believe in ghosts. If you're still not convinced, head down to your nearest courthouse and see for yourself - all those who "appear" before the magistrate.
Re: Heating up
Agreed. For too long, consumers have suffered with the 'Microsoft Tax' in all its forms. Finally, the monopoly is being broken. As long as neither MSFT nor Google (or anyone else for that matter) have a monopoly position, consumers will benefit.
the OS needs development....
To clarify my experience with the ZTE Open: I get noticably better performance from my current HTC Explorer which runs Android 2.3 but has a slower CPU.
Sure, the HTC Explorer wasn't £60 at debut, but you can pick one up on eBay today for less than that. Granted, it's 2nd hand, but I'd take a used HTC Explorer over a new ZTE Open if I was looking for a better UI experience.
YMMV, but my experience suggests it's the OS, not the hardware, that deserves more attention.
I own one and I agree
I found myself agreeing with most of the review. The UI really is cumbersome and the OS needs more work - just to catch up to landfill Android.
I don't believe this phone is for those moving from a feature-phone. I agree it is a dumbphone.
I do believe this phone is for developers and those who are curious and not serious.
If I had to, I could sum up my experience with the ZTE Open in one word: pants.
While we're on the subject...
Let's not forget
a) Dr Frankenstein's monster; and
b) Tanoy's public address system.
Re: Idiots. @ItsNotMe
A few fugly feminazis aren't going to halt centuries of male evolution. Guys like looking at tits, ass and vag. Always have. Always will.
Who TF is David Attenborough?
Sure, he's the guy on the telly that my parents used to watch, but when did he make the jump from media luvvie to monopolist of the truth? Senile twat.
Silicon Roundabout Bollocks
Despite attracting the creme-de-la-creme of developer talent, there's still enough crap developers in London that we don't need more foreign imports.
"How right you were to wait!"
I love that advert's by-line. The use of the exclamation mark is pure gold.
n1 Alistair. Another enjoyable read that had me smiling all the way through. :)
The problem with Ballmer...
...is that no-one believes him any more.
"The data will give insights into hypersonic physics, hypersonic combustion, performance of materials and components, and how these vehicles will fly in future."
I guess they're hoping the data will open new doors for further research.
Is twitter now sh*tter? Or is the sh*tter a metaphor for twitter?
Redmond "will draw upon its overseas cash resources to fund the transaction".
That's the same cash which can't be repatriated back to the US without a MASSIVE U.S. tax liability.
C'mon you labor/labour-voting lefties, let's hear it "tax avoidance!, tax avoidance!".
C'mon Peggy Hodge, make yourself look even more stupid that after your Vodafone comments!
Deckchairs on the Titanic
Moving the ownership around doesn't change the fact that very few people actually want a WinPho. Maybe, by bringing it in-house, MSFT can address this persistant, underlying issue. Maybe. We will see.
Shoddy BBC News coverage?
Those BBC tech journalists are shit hot and like their finance journalists, they have their 'fingers on the pulse'.
For those whose native language is not English: I am being sarcastic, ie. BBC tech and finance journalists are narcissistic retards.
Re: "make 40$ per device"
They were already making $10 per device. They've now paid $7,200,000,000 to earn an extra $30 per device. MSFT will have to sell 2,400,000,000 phones to get their money back. At current Nokia sales rates of 30,000,000 units per year, it'll take MSFT 80 years just to break even - unless consumers change their minds about WinPho and go from their current state of 'not interested' to 'I love it'.
"He said in a blog post"
What? He didn't announce it on Twitter? That's gay.
Robert Peston is an irritation
Most 'financial' journalists know about journalism but know very little about finance. Not surprisingly, he and the BBC have totally neglected to mention the Vodafone shareholder's tax liability in all of this and have, instead, focussed on trying to sensationalise that which is not sensational.
Anyone who has ever bothered to study tax law knows that most jurisdictions - like the UK - effectively treat Corporation Tax as a prepayment of Personal Income Tax. For the benefit of Mr Peston, I will explain.
£100 profit comes into a company and it pays Corporation Tax of £23 to HMRC. It then divdends out the remaining £77 to its shareholder. The shareholder is taxed on the 'gross-up' amount (£77 + £23 = £100) at their marginal tax rate (40%) but receives a tax 'credit' equal to the 'gross-up' (£23). In other words, the shareholder, would ordinarily have a tax liability of £40 but the £23 tax credit means he/she only pays £17. The net result is HRMC receives £40 (£23 from the company and £17 from the shareholder).
Now, if the company doesn't Corporation Tax and it dividends the £100 to its shareholder, then the shareholder is liable on the £100 but there is no tax credit. The shareholder is still liable (at 40%) to tax on the £100 but has no tax credit to reduce his/her liability. Therefore, HMRC still receives £40 (£0 from the company and £40 from the shareholder).
Whether Vodafone, er, "the company" pays Corporation Tax or not, HMRC still gets its £40.
To go about saying "Vodafone's not paying any tax on this" is to miss the point completely. This is why Mr Peston is working for the BBC and not any of the Accounting or Law firms who actually understand UK taxation.
Plumbing new depths
Is there no limit to this madman Elop's depravity? Why is he trying to take the share price to new lows? Is his severence clause so attractive that hes getting impatient? This psychopath must be stopped. For the sake of humanity.
Opinions are like assholes - everyone's got one.
Set up to 'fail'
It strikes me they expected the crowdfunding to 'fail'. Setting a target of more than 3x the then crowdfunding record (Pebble's $10m) could not have been a serious goal and the whole exercise seems more to find out where the 'market' is for a product the likes of the Ubuntu Edge.
What's telling is the “as described in the Indiegogo campaign” qualification. I think they achieved their real goal of testing the market before committing to it.
Watch out Microsoft
With Firefox OS and soon Jolla, and the innevitable booting-out of Elop (and subsequent diversification of Nokia offering) the battle for #3 is going to be interesting.
Lots of IT jobs in London...
...that pay £50k or less. That's why there are a lot of jobs advertised - no one half decent is prepared to take a pay cut.
More gems from recruitment sites:
"C#/C++ desireable" OMG, either make your mind up or stop advertising as this clearly isn't a real job opportunity.
"Minimum 5 years C#....£50,000". Good luck. Maybe you'll find some retirees who are looking for a hobby.
"Top tier Investment Bank is looking for a strong VBA/C++ developer". What a combo! Bzzzzzzzt. Next!
All told, I'd say you could discount those job number figures by at least 25% to filter out the 'CV fishing' expeditions.
The new Newton
I think the iWatch is going to be a commercial failure and will be remembered in history alongside the Apple Newton.
Steve Jobs has gone and the current Board of Directors have the aura of grey 'Yes'-men.
Gold? Surely you mean...
To quote Johnny Mathis ("When a Child is Born"): "White, Black, Yellow - nobody knows"
Mine arrived today.
The built quality is pretty good.
The UI is a not as nippy as my HTC Explorer (600MHz with Gingerbread), but it's not that big a deal and only a troll would offer criticism.
Despite the low ppi, the small screen size makes the UI look crisp.
For £59.99 new, I'm happy so far.
No doubt they'll be trading around £29.99 within 6 months'.
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