Tuesday, April 29, 2014

Apple Fail

Apple has made a lot of money charging premium prices for their iphones, but competitors are rapidly catching up, and Apple doesn't have anything else similar in the pipeline.  It is running out of cash.  It only has $18 billion left, down from $42.9 bn in December 2012. But no worries, it is selling $17 billion of bonds to replenish its coffers. And it won't be the last - "we fully expect that the company will have to access the debt capital markets at least once more, and maybe twice, in the next 12 months to maintain its domestic cash balance at minimum safe levels."

Where is the money going?  To manipulate the stock price.  They are buying back stock. (They are also doing a 7 for 1 stock split to lower the price).

What about the hoard of cash overseas?  It is worthless.  It can't be spent, without incurring a massive tax bill.

How long can this situation last?  Until interest rates rise.

And AAPL reaches an all-time high of 594.09 on Apr 28, and down just slightly lower at 592.33 on Apr 29.  The only place for the stock to go is up.  For now.

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