Apple acquires a $16 billion stake in... Apple!

Apple acquires a $16 billion stake in... Apple!
Back in April, Apple announced that it will invest $60 billion in repurchasing its own shares from the public by 2015. Even now, it remains the largest authorized share buyback in history.

Tim Cook and Co. obviously weren't kidding, and are actually kicking into an even higher gear – instead of the scheduled repurchase of 10 million shares, Apple went ahead and bought back... 36 million shares.

Philip Elmer-Dewitt with Fortune has put this into perspective – at an average price of $444.44 per share, the company spent $16 billion buying itself a stake in... itself. With that kind of money Apple could have snapped a company like Nokia and still have some money left over.

This means one thing only: Apple really means business. It's aslo apparently more than comfortable in its shoes despite the downturn its stock is experiencing, with CFO Peter Oppenheimer commenting back in April:


source: Fortune

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37 Comments

1. PapaSmurf

Posts: 10457; Member since: May 14, 2012

36 million shares. Holy s--t that's a lot. Apple is doing some bold moves as of late.

24. PAPINYC

Posts: 2315; Member since: Jul 30, 2011

Yeah but, too bad it's too little too late as Apple is slowly dying thanks to Samsung. Personally, I think Apple should try using an aftermarket charger on .... itself - instead of buying itself!

26. MobileCaseReview

Posts: 242; Member since: Feb 10, 2012

Why is it too late? They have increased profit margins through the year. Business 101 says, that's not a company folding by any means.

27. jdoee100

Posts: 334; Member since: Jun 04, 2013

Their profit margins are shrinking. And, with cheaper version of iphones coming out, it's going to shrink even further.

33. MobileCaseReview

Posts: 242; Member since: Feb 10, 2012

Everyone's profit margins are shrinking including Samsung. But speaking on 2013 annual fiscal reports, according to WSJ, Apple has seen an increase in profit revenue throughout the year. But the fact is, most major companies are losing profits. Even Samsung missed their expectations by nearly 10%. That doesn't mean they're "dying". Also, explain to me how they're profit margins are going to shrink further? I would like to know your take on that.

2. rantao333

Posts: 346; Member since: May 21, 2013

about $15,999,840,000

13. raunak

Posts: 507; Member since: Oct 12, 2011

Thank you, Sherlock. We had no idea how to multiply.

3. _Bone_

Posts: 2155; Member since: Oct 29, 2012

Told y'all that Apple manipulated the stock. I said around $380 to buy, cause it'll soon be back on the rise (within a few weeks well over $500). Samsung is doing the same with the low numbers.

9. darkkjedii

Posts: 31058; Member since: Feb 05, 2011

Why do you think they did that?

10. PapaSmurf

Posts: 10457; Member since: May 14, 2012

Apple is a business. They're going to do anything that will help them in the long run. I'm really surprised they bought back 36 million shares because $16 billion dollars seems like a definite fortune to the average person but small change to Apple. Good move on their part.

22. darkkjedii

Posts: 31058; Member since: Feb 05, 2011

Yeah I agree, business is business.

4. Googler

Posts: 813; Member since: Jun 10, 2013

Warren Buffet told Jobs to do this and was ignored. Could have went a long way to helping their current stock standings if he would have listened. Well done, Tim.

5. rawbow

Posts: 428; Member since: Mar 30, 2012

well aren't they selfish :P spending on themselves jk...would someone good in shares care to explain the logic behind this move ....ty

7. HeWhoDoesNothing

Posts: 158; Member since: Jul 15, 2013

I can't believe I asked this question without reading yours lol. I'm wondering the same.

6. HeWhoDoesNothing

Posts: 158; Member since: Jul 15, 2013

I know nothing of how stock works. What does this mean for Apple?

15. grahaman27

Posts: 364; Member since: Apr 05, 2013

It means apple believes in itself, and they want everyone to believe in them too. and the "We continue to generate cash in excess of our needs to operate the business, " part means they want you to think they are doing better than ever.

17. zennacko unregistered

Well, buying back your own company from others means you have more control of it when the good times come. That said, if they bought their shares back for $444.44 each, in a batch of 16 million, when this years iDevices come around the shelves the shares will (probably) get a 50%+ rise, and if Apple decides to burn (part of) them down on the stock market again, profit! However, buying a lot of shares from your own company has some setbacks, as a matter of fact the shares are now down to $438 (because the shareholders get suspicious and decide to sell theirs as fast as they can. thus lowering the company's value) but that's no major concern, by August they should rise to $600~700 mark.

18. rantao333

Posts: 346; Member since: May 21, 2013

A & B each has 50% share,and the each of their share value is $500. now they start a business and earn $1000. instead of share the profit among them, A decided to keep it for a while. after a while, share price drop to $400, A offer B to purchased his 50% share @ value of $400. and B accepted. So A take out $400 from the profit and gave it to B. now the profit left 600. In the end, A has the 100% of share while still keeping $600 of profit in his hand. B has 0% share and $400.

8. nobelset

Posts: 270; Member since: Oct 17, 2012

It would be funny as hell if they went broke in a few months. Tim Cook would be the Jesus of share holders then...

11. darkvadervip

Posts: 366; Member since: Dec 08, 2010

No dummies that means there buying while there stock is at an all time low because something big is coming that's going to increase stock value. I swear people don't know anything about the stock market. Just like Samsung sold more but they lost more which can hurt your stock value in later quarters.

23. Pdubb

Posts: 249; Member since: Aug 08, 2011

You do know that Apple is a long way from an "all time low" in stock price. This plain and simple a way for Apple to increase their stock position. They are showing confidence in the company.

12. raunak

Posts: 507; Member since: Oct 12, 2011

"With that kind of money Apple could have snapped a company like Nokia and still have some money left over." WTF Chris P.? The problem was always the fact that Nokia does not want to be sold, not that there was no one to buy them.

16. Chris.P

Posts: 567; Member since: Jun 27, 2013

I am aware of that, raunak, and I wasn't trying to imply different. It was for the sake of perspective ;)

19. raunak

Posts: 507; Member since: Oct 12, 2011

Got it, thanks.

25. PAPINYC

Posts: 2315; Member since: Jul 30, 2011

In that case, you could have used Microsoft as the example and your "perspective" would have been much more effective??!!

30. muhsen

Posts: 281; Member since: Jun 07, 2012

do u know that by ur statement u r like saying that because nokia's Market capital is 15.17 billion dollars (shares multiplied by the price of shares) , apple can grab it for 16 billion dollars and still have some money ????http://www.google.com/finance?cid=657729 so since when is the price of company equal to its market capital ???? i don't want to be aggressive or offensive, but tell this to someone with some basic economics or business background, he would just laugh out pretty much loud, the price of a company involves a lot more than that and market capital has nothing to do with its price....a company like nokia if its going to be sold will be priced by no less than 40 billion dollars (the patents portfolio is big enough to drive the price higher) so this comparison is pretty awkward ,pointless, points to ur ignorance about business models and seems to be for sake of some company Vs company comments. next time , if u want to show some comparisons, make sure to cover all the basic info and basics of these comparisons, otherwise just stick to the info in the source.

32. muhsen

Posts: 281; Member since: Jun 07, 2012

u maybe mixed up between buying some shares in a company and buying a whole company as with ur context u r implying they r the same...while actually they r not

36. Chris.P

Posts: 567; Member since: Jun 27, 2013

muhsen, I am not mixing anything up :)... you talk about the context a lot, don't disregard it then?

20. Napalm_3nema

Posts: 2236; Member since: Jun 14, 2013

The fact is, they are a publicly traded company, therefore they can be bought, whether the Board and CEO want it, or not. A good enough offer would have to be heard, and if rejected, a company could just start buying from shareholders until they acquired a controlling interest.

28. Googler

Posts: 813; Member since: Jun 10, 2013

Who maintains the controlling stock? If Nokia has the biggest percentage, or more than 50%, your point is true but won't happen unless Nokia wants to be sold. I honestly don't know how much of their own stock they own but they'd had have been insane to not cover that base properly.

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