By Graham K. Rogers

Opening Gambit:

Apple Share Stuff

The controversial Proposition 2 was withdrawn after a court decision, but Tim Cook was still calling it a silly sideshow. David Eindhorn was not at the meeting. In another item, Neil Hughes picked up on some of the side comments at the event. On the growth of Android, Cook said that "success is not making the most" which some of those telling us all that the cheapo iPhone is a done deal should digest. As I have mentioned before, Apple does not do cheap and maintains high margins with products like the iPhone and Macs.

Another report on the meeting came from Jessica E. Lesson and Ian Sherr on Wall Street Journal. This made much of the stock price fall and comments by Tim Cook and wrote that "There was little discussion about the issue that had emerged as a particularly hot topic before the meeting: Apple's $137 billion cash hoard" which was only hot topic in some quarters. One shareholder group was not so happy as they had obviously hoped to walk away, perhaps with cash in hand. There were a number of other issues mentioned in this report. [My link for this item was from MacDaily News.]

But then one analyst thinks Apple will need all of the $137 billion to weather the storm over the next couple of years, Mikey Campbell reports. Peter Misek of Jefferies suggests that strains on the Mother Ship will come from capital expenditure requirements, a move into prepaid cellphone markets like India, slowing international iPhone sales, and "white box smartphones". And analysts interference I should think. That is going to be quite some storm if the cash that is greater than most other companies' worth is to be diluted; but if Jefferies is right, then so was Steve Jobs and so is Tim Cook and the current management in their handling of the reserve.

One question that was covered by Cook was the new Apple Campus which is under development right now. Kevin Bostic on AppleInsider has coverage of this item and the expectation is that 2016 is the move-in date. And during the meeting, John Fortt and Cadie Thompson of CNBC put out a live blog, which caught some useful points. Another point, that may quieten some critics (but probably not) was in a report from Neil Hughes on AppleInsider. Tim Cook, looking to the future told investors that Apple remains focused on the long term, and is exploring new potential product categories. Note the use of the plural, "categories." [Cue iWatch excitement again.]

On Wednesday I mentioned the Tweet from Doug Kass that sent the share price of Apple up about $10 or so on what was nothing more than a groundless rumour: gnomes above the Alps, indeed. Kass has been mentioned before and I dug up a couple of links that I had to his comments. For example this is what I wrote in November:

Also coming to the same conclusion is Doug Kass -- much more irony here -- who is one of those apparent gurus whom the TV companies like to have on. He is buying Apple. Now. But he is being called out by several commentators as he was really against it before he was for it. We are reminded of what he said in October in an item by Philip Elmer-DeWitt on Fortune when he convinced many investors that Apple had "lost its mojo" (a quaint phrase from the 1960s). Since then $130 billion has been lost and, as I have predicted, now it is time for the ride up again. And Kass is eager to join. For now.

I also mentioned Kass last month, when I wrote as part of a longer comment,

. . . an article by Dan Weil on CNBC (them again) who tells us that Doug Kass says that Apple is dead and he rolls out all the usual comments: more competition, profits stagnant (but he fails to mention the record figure or the 14 week reporting period) and little growth visible. Comparing Apple to Microsoft was a bit unkind.

Among commentators to call Kass out earlier were the above-mentioned Philip Elmer-DeWitt who has had another chance this week as not long after the Kass Tweets and the rising price, Kass decided he was getting out, which sparked a number of sharp comments on Twitter, with some equally sharp replies by Kass. Philip Elmer-DeWitt comments that while it would be hard to pin the former drop in Apple share prices to Kass, the mini rise this week can be put firmly at his door: "it's hard not to pin Tuesday's action on Kass' Twitter posts or to see how he profited from them. The stock was down. He tweeted the split rumor. The stock went up. He sold shares while tweeting that his rumor was baseless."

Also reporting on Kass, and linking to the Fortune article, MacDaily News had some harsh comments concerning his integrity and hoping that the SEC would actually investigate for once.

A further report by Daniel Eran Dilger on AppleInsider has some interesting comments from Jim Cramer and how this sort of action might work. In my mind, this merely confirms the crookedness and unrealistic nature of the shares market: not related to the real world, just a form of gambling.

The Dilger article also looked (before the shareholders meeting) at the idea of a stock split and the point that this is unlikely to affect the value Apple shares (1 share, $10, share split, 2 shares $5 - in real basic terms) although it could make it easier for smaller investors to get a look in. He noted as a conclusion, that the low share prices "occured despite 2012 being the company's most productive and profitable year, generating record new revenues and earnings."

While Kass was Tweeting and Eindhorn was litigating, we are told by Nicolas Van Praet on Financial Post that a Candian pension fund, Caisse has invested a lot more in Apple and now holds a stake in Apple worth more than $1-billion, apparently doubling its earlier investments. [My source for this was MacDaily News.]

Although a requirement for execs at Apple to hold onto stock was shot down at the shareholders meeting, the reason may have been that the policy already existed. Josh Lowensohn reports that the rule was brought in last month quietly and it requires "executive officers to hold three times their annual base salary, while non-employee directors need to hold five times their annual retainer. Meanwhile, CEO Tim Cook is required to hold 10 times his annual base salary" in shares that is.

For the usual Cassandra comments and links, the Friday Cassandra is also online.

Graham K. Rogers teaches at the Faculty of Engineering, Mahidol University in Thailand. He wrote in the Bangkok Post, Database supplement on IT subjects. For the last seven years of Database he wrote a column on Apple and Macs.