May 10 - Rob Cox and Jeffrey Goldfarb discuss how Apple’s record $50 bln share repurchase typifies the challenge facing investors and helps explain the healthy appetite for IPOs.
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So -- the past four years American companies have bought back like one point four trillion of their stock. All those buybacks of course is sucked equity out of the market. And it's creating demand for new equity so this is Jeff you're thesis we've got. Fifty billion dollar buybacks by apple beat all these kinds of things are basically meaning that fund managers investor he's put money to work. And what an awesome -- and very bright via. The story is really bad about this like chase for yields but I think the other side of -- are sort of a complementary part of it is this. Disappearance of stock you know Apple's latest they just at the biggest stock buyback ever order -- -- yet. And buying back fifty billion dollars for the stop feeding them so you Mitchell report trillion dollar number. Which is and that's since 2009 Intel yes since the trough of the market according to Thomson Reuters data yes we always the wild -- -- -- It's a little side of that is that. 800 billion dollars of new issuance of is that huge gap of stock prices. Going you know vanished from the market terms so so that so what does that mean for issuers and that's what we've had this -- here this kind of new wave of IPOs have kind of hit the market it's partly because of the markets are very buoyant. There's also a lot of liquidity sloshing around but I think this plays into it as well also you know one of the biggest things we you know the best ones we've heard recently is Leon black and Apollo. Saying that he's selling everything that's not nailed down well. He just put Claire's Stores filed announced one for that would look at which was like an accessories retailer they bought it probably the top mark Dave why -- actually quite a way out sort of while ago and I -- You've also got they also just today -- last night file an IPO purse sprouts farmers market which is you know organic. We are yeah whose type thing you know he really is selling everything and there's a. A lot of you know in the so the point being though because there's this demand to investors are gonna pony up lots of money. You have good valuations we obviously have a stock market in the US anyway that's reached new records I'm so it's a fabulous time to be selling everything that they kind of. We've seen it already in certain examples you know before and are willing to take big risks on just to get their hands on stocks. To fill this void. You know we had we had just come equipped kiwi or Russian -- price right now. You know with risk factors about the mob money laundering cypress cypress based. You know got taken out. Yeltsin highly leveraged companies like SeaWorld the others and there are -- it's clear that there's appetites -- basically all the private equity guys in particular are gonna start to unload all of this stuff they've got -- even if it is massively leveraged and that we may be at the top of the cycle -- -- cycle. I'm all right you know again it's estimated demand -- -- there's so many reasons for the demands is the -- one that that hasn't really gotten a lot of attention the the united companies we know and of course -- -- not so well not so good with the timing on the buybacks. Right now and that's true. But I active stock at the wrong time hopefully you know investors are not also being forced to file -- absolutely well -- -- I just say we see that with this story before but we know our guys are able thanks Jeff. We'll be back more breaking these next week.