Carl Icahn advises Tim Cook, CEO Apple Inc. (NASDAQ:AAPL) to invest in larger stock buybacks.
Bloomberg’s Industries’ research shows that returns on Technology companies’ share- purchasing program are not that high. According to a research done on six technology companies in the US, the cost of the buyback is rarely equal to the resultant market value rise.
A Bloomberg Analyst, Anand Srinivasan said that the buyback program was introduced back in 2007 and out of six companies namely; QUALCOMM, Inc. (NASDAQ:QCOM), Intel Corporation (NASDAQ:INTC), Hewlett-Packard Company (NYSE:HPQ), Broadcom Corporation (NASDAQ:BRCM), Texas Instruments Incorporated (NASDAQ:TXN) and Dell Inc. (NASDAQ:DELL), only Qualcomm’s returns were more than the amount invested in the Buyback Program; this returns included the equity cost. Qualcomm could get these higher returns because of its effective policy of buying its stocks at lower prices only.
Srinivasan also pointed out that buybacks generate the problem of paying taxes on both overseas money transfers or borrowing money for the purchase.
New York’s BTIC LLC analyst Piecyk said that a company can experience a performance improvement in terms of its per-share-earnings after it buys back its shares. This was evident when Apple Inc’s last quarter showed increased profits at 22 cents per share after it bought back its shares, leaving fewer stocks in the market. However, Piecyk believes that these benefits might not last long and profits might be hampered due to other reasons; in case of Apple, the company’s profit growth slowed down because it did not launch a new product.
In Apple’s last quartet, the company saw a 22% drop in its net income and an 18% drop in three months prior to the last quarter. A long term buyback program that will hit $60 billion mark by 2015 was > Klikk her for a registrere deg hos en av de beste nett casino online ene!Som ny spiller hos Guts Casino, venter det en rekke fordeler pa deg. announced by Apple in April. The company bought back its share of worth $16 billion last quarter. According to Icahn Apple must put down $150 billion for its buybacks.
In the premarket session, shares of Apple Inc. (NASDAQ:AAPL) went up by 0.30% hitting the mark of P0.00.
Icahn invested in Netflix, Inc. (NASDAQ:NFLX) last year in October which more than doubled the company’s shares. Icahn after this investment said that he will not sell his share in the company or ask for a seat on Netflix’s board.
In the last session, Netflix, Inc. (NASDAQ:NFLX) shares went up by 1.01%.
In the premarket shares of Intel Corporation (NASDAQ:INTC) went down by -0.13% ($22.54).
Dell Inc. (NASDAQ:DELL)’s share went down by -0.12% ($13.70) whereas Broadcom Corporation (NASDAQ:BRCM) shares also saw a decline by -0.75%. Texas Instruments Incorporated (NASDAQ:TXN) went down by -0.66% and QUALCOMM, Inc. (NASDAQ:QCOM) too dropped by -0.96%.