AAPL
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How to Really Make a Fortune on the "Mobile Wave"
If you've been riding along with me for any length of time, you know I get really revved up whenever I talk about the "Mobile Wave" in technology.
The truth is, I can't help it: I look at the forecasts, calculate all the money that can be made, and end up feeling as jazzed as can be about the windfall profits we can reap from this transformational trend.
And I'm not the only one who's feeling this technology-fueled ebullience: The folks over at Amazon.com are clearly experiencing the same adrenalin-driven affliction.
Amazon, you see, is coming out with its own smartphone.
And not just any smartphone. Amazon's entry into smartphone derby is going to be one cool mobile device - highlighted by a 3D screen that will display photos so realistically that you'll want to just reach out and touch them.
Why in the world, you might ask, is an "e-tailer" entering the wireless-phone business?
Just look at the numbers.
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Apple Bond Offering is Proof It'll Do Anything to Avoid Taxes
The record $17 billion Apple bond offering this week will do more than just placate shareholders eager to get some benefit from the company's $144.7 billion in cash.
It will help Apple Inc. (Nasdaq: AAPL) avoid paying taxes, a feat that the Cupertino, CA tech giant has elevated to a high art.
The company has kept the bulk of its cash - some $102 billion - in overseas accounts to avoid paying the 35% corporate tax rate here in the United States.
Borrowing money to fund its plans for dividend increases and stock buybacks allows Apple to reward its shareholders without repatriating those foreign profits and paying U.S. taxes.
Better yet, the interest Apple will pay out in its bonds is tax deductible, which will reduce the company's tax bill even more.
It's all so elegantly devious - and perfectly legal.
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Apple Stock is Up After Earnings – But Are Gains Here to Stay?
Apple stock was up 5% in after-hours trading Tuesday when its earnings report turned out to be better than expected - but, not great.
Everyone was bracing for the worst when Apple Inc. (Nasdaq: AAPL) released second-quarter earnings Tuesday after the close. The big question was just how bad things were going to be.
The answer turned out to be... not so awful. The iPhone maker surprised Wall Street with better than expected numbers, mostly because expectations were so low.
However, as expected, forward guidance was glum.
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Apple: Cash or Trash?
With Apple Inc. (Nasdaq: AAPL) off nearly 50% from its $705.07 a share high set last September, many investors want to know if it's a buy.
Not in my book. Here's why:
1. The company has held on to its premium pricing strategy for too long. Going out on price as it has recently with iPhones, for example, is the death knell of competitive differentiation. Businesses that engage in price wars have a very difficult time climbing back up the proverbial ladder.
2. The present management team is having trouble fulfilling the late Steve Jobs' vision, and execution appears to be stumbling. The Maps thing, for instance, was an unmitigated disaster and shattered Apple's image of invincibility. The public noticed.
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Why David Einhorn Needed to Sue Apple (Nasdaq: AAPL)
Outspoken fund manager David Einhorn feels so strongly about the need for Apple Inc. (Nasdaq: AAPL) to share more of its cash with its stockholders that he has sued the company.
Shareholders like Einhorn - whose Greenlight Capital fund owns between 1.3 million and 1.5 million shares of AAPL - think the Cupertino, CA-based company should use its monstrous cash pile of more than $137 billion to boost its return.
Einhorn's lawsuit came after his request last year that the tech giant create shares of preferred Apple stock that would exist solely to pay a dividend about twice what the common stock currently pays.
But Apple has included a proposal on its Feb. 27 shareholder ballot that would amend the company's corporate charter to eliminate its ability to create preferred stock. It also has combined that issue with two other unrelated issues in the same proposal.
Einhorn is suing Apple because he says Securities and Exchange Commission (SEC) rules prohibit such bundling, and because he wants to ensure the company will be able to create the type of preferred shares he has proposed.
To further hammer home his point, Einhorn wrote a letter to all Apple shareholders, which was released today, in which he explained his position and urged them to vote against Proposal 2 in the shareholder ballot.
"Proposal 2 is value destructive, impedes the Board's flexibility, and does not merit shareholder support," Einhorn wrote.
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The Apple Sell-Off is Just Beginning
I've made the case several times that Apple Inc. (Nasdaq: AAPL) was over-cooked, most recently last fall when the company was flirting with $700 a share.
Each time I did I was taken to the woodshed by the legions of Apple fans who couldn't reconcile their passion with their profits.
iHere we go again...
Following earnings that "beat" and revenue that fell short, the company dropped $48 billion, or roughly 10%, in afterhours trading on Wednesday. And still more on Thursday in early trading.
I think this is just the beginning of a protracted sell- off and my argument really isn't that fancy. In fact, it comes down to two very simple points:
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Why This Week's Apple Earnings Matter So Much More than Usual
Monster Apple earnings in the December quarter would do wonders for Apple stock - but don't count on that happening.
Apple Inc. (Nasdaq: AAPL) earnings for Q1 2013 are due out Wednesday after market close, and Wall Street estimates range from a 14% decline to a 12% gain. Apple's own guidance is for earnings of just $11.75 per share, while the consensus on Wall Street is for earnings of $13.41 per share.
Even if Apple earnings match Wall Street expectations, $13.41 per share would actually be a decline of more than 3% year-over-year, a far cry from the stunning 118% gain the company reported last year. The psychological impact of declining year-over-year profits for the first time in nine years could ding the stock.
An actual earnings miss - even by just a few pennies - would be more dangerous for Apple stock, meaning the likelihood that Apple stock will fall after earnings is higher than usual.
Here's how Apple got in this vulnerable position.
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The China Smartphone Brand That's Beating Apple (Nasdaq: AAPL)
Most investors who pour money into smartphone makers look to dominant players like Apple Inc. (Nasdaq: AAPL) - but they're missing a bigger part of the market.
The global smartphone industry is changing dramatically, as China surpassed the United States in 2012 to become the world's largest smartphone market by volume. Smartphone shipments to China in the third-quarter of 2012 hit a record 60 million.
Apple has noticed this shift. In fact, Apple CEO Tim Cook recently told Chinese-run Xinhua News Agency that he believes China will become the company's biggest market in the future.
But for now, it's the domestic brands that have won.
"Chinese brands have taken more than half the Chinese smartphone market this year, and they will take much more," Sandy Shen, the head of consumer research at technology research company Gartner in Shanghai, told the Financial Times.
