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Breakingviews: Mid-life Apple

Thursday, April 25, 2013 - 03:49

April 25 - Breakingviews columnists discuss signs the tech company is hitting middle age and how long CEO Tim Cook can be comfortable in his job.

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So apple officially admitted that it is a mature corporation this week and its earnings and also said it. What its margins were shrinking its -- from issuing huge dividends much bigger dividends and any other company and its buying back tons of stock so. How are we supposed to look at that rob I mean is this -- bad -- -- good side. It's a bit of both the right if that's got a lot of sort of priced in allowing exactly them market caps lost like 300 billion. Marquette replicating these trades -- -- team -- would be at like nine times which is. Clearly it's still growing. -- on average going. Pretty well that that's extremely. Yet if it's. Then you may see a service basis for the company's valuation. You know not wanted the bits that Microsoft patent right is that we've written about before apple becomes little more like Microsoft unless they can keep. New waves of inevitable currents coming read an icon but it hasn't for a -- one thing we know it it doesn't need. A 150 billion dollars or wherever it's got on its balance -- -- to come up with -- innovative product. -- AKA can come I mean it's. How much more about the money just being wasted. So -- key really to think fit 45 pretty. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Now we think that's a sense. Will move given the point that the stock is -- cheap on a relative -- -- photos elicited a philosophical basis. You know you you should probably prefer a special dividend to -- -- -- in the stock units as basic as companies tend to fight next though when it's expensive. If the stock is genuinely cheapened as those that anybody when it's cheaper I think you could say that buybacks are a good idea it. Investors like -- nine -- he wanted apple to give back capital BP wanted an innocent informative and he should be happy that. That that doing this -- the stock is of course hasn't done much damage it didn't decline. It's sort of it still -- it's treading around 400 dollars a share. -- the market. Wasn't wasn't on enthused by this but it was sort of in an article like -- at math but that's yeah it -- It's it's good for Cheryl this is think about this though it or don't buy back more shares of the same amount of cash right but I also think Williams things of that believe the way it. We've kind of so about this is they have a 150 billion goes up on the bouncy if they'd had. None of that over let's say fifty billion dollars of events -- it might well be still work the same time for a the company has people value this company very strange place they're giving back. Cash to show business -- the kind of a bonus because this has. Probably wouldn't get much cheaper even those they've paid -- cab driver right and as far as the CEO of mr. cook. He's he's got some time I mean I think anyone anyone calling for his resignation are saying they should they should examine him is is this being a bit. Premature he's had about a year and takes it takes awhile to introduce new products and give him another year and then and then maybe you can start to even consider it. Yeah you're very them. Yeah I think that's right I mean certainly the immediate. He had this great reserve of cash of about seeing you can figure out some things to do that trying to keep shareholders happy for awhile. Before I think he's he's the real threat community that he had that leeway and lives in a good feminist groups as I think you need to give people time. OK good good stuff will be back for more breaking views tomorrow.

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Breakingviews: Mid-life Apple

Thursday, April 25, 2013 - 03:49