Is Apple bribing investors?

March 19th was a great day for Wall Street, for technology business, for S&P 500 index and for generally exhausted from uncertainty in this crisis investor. On that day Apple announced it will pay dividends and will buy back some shares in a 3-years operation that will cost billions of dollars.
This generous decision by Tim Cook and his board kicked up all the market and created new hopes for an end of already years long markets confusion. Apple is paying, Apple has big cash, Apple will save the technology and the business at all...
But let's look a little ahead and analyze what is happening, out of emotions...

 Steve Jobs was making presentations of new products and even new ideas, that turned into cash. Tim Cook is making presentations of financial operations that address the shares of Apple. With Steve not thinking of shares, the shares rose. Will they rise with Tim?
I don't think so. I have a feeling that Apple is bribing the markets. All this looks like a well planned financial scheme that aims to keep the value of company using not its current and future business, but money. Nothing other than money, that will be poured on market and this way - keep the shares value. These are the Steve Jobs' money, that he earned for Apple, after years of genius hardworking and series of successful products. I have the feeling that Mr Cook is trying to bribe the investors, using Steve's savings.
In fact Steve Jobs was a skinflint. Like most of other successful technology entrepreneurs, Jobs didn't like to pay dividends. Regardless of this, Apple started a second life, after almost bankrupted just before Jobs' return as CEO. The market value of Apple skyrocketed with years, along with every new project of the genius CEO. And not even a cent was paid as dividend...
So what was the value of Apple?
The value was Steve Jobs. The most precious asset of Apple was Steve Jobs. With him as CEO, the company was great. Without him, the company has nothing but cash. The cash, inherited from Jobs.
Yes, Apple has a very successful start with the new iPad. Much money will be made. But this is part of the past. The iPhone and iPad were the great inventions of Jobs. Part of his inheritance. They can bring lots of cash in near future. But they cannot be eternal. In fact at current moment Apple has no any exceptional product or a surprise that can explode on markets. Apple has a portfolio of classic products with an increasing competition. Smartphones and tablets were not even Job's invention. They existed long before the iPhone and iPad were born. But Jobs has made them super-mass products, has made them a dream for customers all over the world. And then has sold this dream on an high price.
That was the story of Apple's success. Nothing exceptional as a product, but extremely exceptional as a dream. And the dream-maker was named Steve Jobs.
Is Tim Cook a great manager? Absolutely yes. Has Tim Cook a great team? Absolutely yes. He has the team of Steve Jobs. Has Apple enough money and technology? Absolutely yes.
Now just replace Apple with IBM and you will find the same answers. Yes, Apple is a great company that has everything needed to be stable and for a long time on market. But that is just a great company. That is not a dream. The dream ended with Jobs. And the problem of Apple is that the current market value is the value of the dream, and not the value of the company. In fact, a company with the same parameters as Apple is to have 2 or 3 times lower value. The rest is the dream.
Apple had a great chance with a dream-creator as Jobs on the top. But now it has a great problem. And Tim Cook will have to spend much money to keep the company's value at the Jobs' levels without Jobs. At the moment the money are here. But not for a long... And without a new dream-genius, it is not possible for such company to keep its value.
Dream-geniuses are hard to find. In fact, most of genius-leaded companies in past had a serious step-back, after the genius has gone out of business. In 90-s Apple was nothing without Jobs. And then it became everything with Jobs. Now is again without him. The role of the exceptional leaders is always important for the leaded by them structures. In fact, these are not companies that hire a good manager. It is the good manager that hires a company to work for his imagination.
So, the 19th day of March was a great day, thanks to Apple and Tim Cook, but mostly thanks to Steve's inheritance as money and a ready-to-go new dream. But in mid-term I don't see Apple as a dream-creator. Therefore Apple cannot have the same market value as it has as a dream-creator. Therefore the shares will have to go down - from the current dream levels to the levels of a classic company with stable business. And the power of pure money to buy time is limited. So, being wise, may be it is good to sell Apple now - when the price is at the top and money-backed emotions dominate the market...

Dobri

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