TheAiGuy Posted May 13, 2016 Share Posted May 13, 2016 Wow, this investment looks bad. I'm sure it's fine as an investment on its own merits but it's in an orthogonal business line -- why are they doing this? It looks like capital allocation for the purpose of optics, which is troubling. Link to comment Share on other sites More sharing options...
Picasso Posted May 13, 2016 Share Posted May 13, 2016 I don't know enough about Didi to understand if they overpaid or not, but this statement does make it seem like they overpaid. "We are making the investment for a number of strategic reasons, including a chance to learn more about certain segments of the China market" Link to comment Share on other sites More sharing options...
hardincap Posted May 13, 2016 Share Posted May 13, 2016 Wow, this investment looks bad. I'm sure it's fine as an investment on its own merits but it's in an orthogonal business line -- why are they doing this? It looks like capital allocation for the purpose of optics, which is troubling. Apple is clearly interested in the car market. Cook believes China will be apple's greatest source of revenue, so its super important to understand the chinese consumer well, and to make their platform as relevant as possible. It also helps to alleviate concerns that the Chinese authorities could pull the plug on apple's businesses for political reasons (harder to do when chinese consumers & businesses are dependent on apple). Lastly its one more distribution deal to sell iPhones - Uber provides its own drivers with iPhones and I'm assuming Didi will do the same Link to comment Share on other sites More sharing options...
glorysk87 Posted May 13, 2016 Share Posted May 13, 2016 I think everyone here is looking at this investment in Didi the wrong way. Everyone panics, thinking it's a shitty investment, why would they get into cars, what are they thinking, etc etc. That's all very first-level thinking. Try to think about it on a deeper level. Though every average Joe would disagree, Apple has an incredibly intelligent management team. They don't throw money away on frivolous pursuits (a la Google). In my opinion, it's not about cars. It's not about ride-sharing. It's not about creating an iTaxi. It's not a desperation move. It's about currying favor with Chinese regulators. Apple has been encountering regulatory pushback from China lately. Additionally, we've seen other tech companies get hit with huge antitrust fines out of China in the last few months (Qualcomm paid $1bn just a few months ago). China is a very important market for Apple, and putting $1bn to support a Chinese startup will definitely gain them some favor from regulators in the country. In my opinion, it's a small price to pay to avoid being hit with antitrust regulation which could have financial impacts well exceeding $1bn. Link to comment Share on other sites More sharing options...
fareastwarriors Posted May 13, 2016 Share Posted May 13, 2016 Wow, this investment looks bad. I'm sure it's fine as an investment on its own merits but it's in an orthogonal business line -- why are they doing this? It looks like capital allocation for the purpose of optics, which is troubling. If it's any consolation, at least Apple is only using the off-shore cash. ;D Link to comment Share on other sites More sharing options...
TheAiGuy Posted May 13, 2016 Share Posted May 13, 2016 It's about currying favor with Chinese regulators. Apple has been encountering regulatory pushback from China lately. Additionally, we've seen other tech companies get hit with huge antitrust fines out of China in the last few months (Qualcomm paid $1bn just a few months ago). China is a very important market for Apple, and putting $1bn to support a Chinese startup will definitely gain them some favor from regulators in the country. In my opinion, it's a small price to pay to avoid being hit with antitrust regulation which could have financial impacts well exceeding $1bn. That's not exactly a good bull case. Based on my Twitter feed -- the tech crowd seems to be giving Apple the benefit of the doubt here. I'm still think Tim Cook is panicking. ---- Edit: the investment will probably be lucrative, and the offshore cash does make it cheaper. That's not the point Link to comment Share on other sites More sharing options...
Jurgis Posted May 13, 2016 Share Posted May 13, 2016 Assuming Apple does not have great ideas for new products that would move the needle, perhaps they should become a VC company. Of course this would make the heads of Apple faithful explode and perhaps Tim is not the right person for it, but that would be one way to productively use the cash they have. Possibly better than let it sit on the balance sheet and possibly better than paying 30% to repatriate and buy-back-shares. Although if stock drops another 10-20%, I'd say repatriate and buy back shit ton. Disclosure: I have a large position in AAPL, which by itself means "sell, sell, sell and then short some more" 8) Link to comment Share on other sites More sharing options...
RichardGibbons Posted May 13, 2016 Share Posted May 13, 2016 Wow, this investment looks bad. I'm sure it's fine as an investment on its own merits but it's in an orthogonal business line -- why are they doing this? It looks like capital allocation for the purpose of optics, which is troubling. Another orthogonal business line they invested in was mp3 players. Now that line has evolved into almost their entire business. Link to comment Share on other sites More sharing options...
TheAiGuy Posted May 13, 2016 Share Posted May 13, 2016 Assuming Apple does not have great ideas for new products that would move the needle, perhaps they should become a VC company. Of course this would make the heads of Apple faithful explode and perhaps Tim is not the right person for it, but that would be one way to productively use the cash they have. Possibly better than let it sit on the balance sheet and possibly better than paying 30% to repatriate and buy-back-shares. Although if stock drops another 10-20%, I'd say repatriate and buy back shit ton. Disclosure: I have a large position in AAPL, which by itself means "sell, sell, sell and then short some more" 8) Fair enough I just don't want Tim Cook to do it. He should have something better to do with his time. Wow, this investment looks bad. I'm sure it's fine as an investment on its own merits but it's in an orthogonal business line -- why are they doing this? It looks like capital allocation for the purpose of optics, which is troubling. Another orthogonal business line they invested in was mp3 players. Now that line has evolved into almost their entire business. Not what I meant by orthogonal. MP3 players are hardware and software. Didi is a service business -- also, Apple isn't buying Didi, it's investing in it. it's not really the same Link to comment Share on other sites More sharing options...
fareastwarriors Posted May 13, 2016 Share Posted May 13, 2016 http://www.wsj.com/articles/apples-1-billion-didi-investment-revs-up-autonomous-car-push-1463154162 Apple’s $1 Billion Didi Investment Revs Up Autonomous Car Push Not only an important ally in a key market, but also a rich data source for self-driving vehicles Link to comment Share on other sites More sharing options...
fareastwarriors Posted May 13, 2016 Share Posted May 13, 2016 Assuming Apple does not have great ideas for new products that would move the needle, perhaps they should become a VC company. Of course this would make the heads of Apple faithful explode and perhaps Tim is not the right person for it, but that would be one way to productively use the cash they have. Possibly better than let it sit on the balance sheet and possibly better than paying 30% to repatriate and buy-back-shares. Although if stock drops another 10-20%, I'd say repatriate and buy back shit ton. Disclosure: I have a large position in AAPL, which by itself means "sell, sell, sell and then short some more" 8) Hopefully Apple won't follow naming convention of Google's venture arm, GV, and uses the name AV... ;) ::) ;D Link to comment Share on other sites More sharing options...
Liberty Posted May 16, 2016 Share Posted May 16, 2016 BRK reveals 9.81m shares stake in AAPL. Link to comment Share on other sites More sharing options...
DCG Posted May 16, 2016 Share Posted May 16, 2016 Wow. Link to comment Share on other sites More sharing options...
Ian L Posted May 16, 2016 Share Posted May 16, 2016 Ted, Todd or Warren? Link to comment Share on other sites More sharing options...
Liberty Posted May 16, 2016 Share Posted May 16, 2016 Ted, Todd or Warren? Not Warren, not sure who. Todd if I had to guess... Link to comment Share on other sites More sharing options...
DCG Posted May 16, 2016 Share Posted May 16, 2016 . Link to comment Share on other sites More sharing options...
Guest neiljgsingh Posted May 16, 2016 Share Posted May 16, 2016 Last I saw, Ted and Todd manage about $18bn. Is that still accurate? Would be a pretty big position if their combined book is still that size. Link to comment Share on other sites More sharing options...
Mephistopheles Posted May 16, 2016 Share Posted May 16, 2016 Its about a billion dollar stake so 10% position for whoever bought it Link to comment Share on other sites More sharing options...
Picasso Posted May 17, 2016 Share Posted May 17, 2016 Reading through these Seeking Alpha comments hurts my brain. http://seekingalpha.com/news/3183385-buffett-buys-apple It's no wonder this stock gets mispriced with insane volatility all the time. I don't think these investors have any idea what they're doing. For that reason I don't think I'll ever own Apple. I get too uncomfortable when a ton of idiots are constantly buying into a stock I own. Link to comment Share on other sites More sharing options...
Guest roark33 Posted May 17, 2016 Share Posted May 17, 2016 Come on, Picasso, that itself sounds like some shaky thinking. You really think there is a company out there without some idiot shareholders? Just the sheer size of Apple and consumer-facing nature of the company, you are going to have even more idiots, but that doesn't make a business a good or bad investment. If anything, you should be following the company more because at some point those idiots are going to rush for the exit.....we expect more from you here.... Link to comment Share on other sites More sharing options...
Picasso Posted May 17, 2016 Share Posted May 17, 2016 Is retail pushing for the exits here? I don't get that sense at all. If anything you had retail all giddy about Icahn being involved and now that he sold out, they kind of brush that off like no big deal. No worries, Copperman is in it! No wait, he sold out right after too.... Now it's a Berkshire PM disclosure that is pushing up the stock 4%! I'm sorry but none of that speaks to retail giving you a good shot at an undervalued situation. Not to say the company can't earn a lot and the shares do well anyway. I just think it raises the hurdle on what you should accept as "cheap enough" when you get to see the caliber of your fellow investors. Link to comment Share on other sites More sharing options...
Guest roark33 Posted May 17, 2016 Share Posted May 17, 2016 Next time you see Murray enter an investment of yours, run for the hills...... Link to comment Share on other sites More sharing options...
Picasso Posted May 17, 2016 Share Posted May 17, 2016 Poor Bob Murray. http://grist.files.wordpress.com/2012/10/murray.jpg?w=660&h=440 Link to comment Share on other sites More sharing options...
Guest roark33 Posted May 19, 2016 Share Posted May 19, 2016 I wrote up some thoughts on Apple at its current valuation, all negative to start. Interested in any feedback. http://thesovagroup.com/is-there-a-worm-in-apple/ Link to comment Share on other sites More sharing options...
DCG Posted May 20, 2016 Share Posted May 20, 2016 Does Amazon own patents on e-ink readers? I wouldn't mind seeing Apple release an e-ink reader, or even an iPad that can alternate between e-ink and Color LCD. I love being able to read in e-ink my Kindle, but the UI, touchscreen, and web browsing are crap. The Kindle library is their real asset, but Apple could make iBooks better if they put some effort into it. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now