Now is a great time to bet on Apple, says Goldman Sachs

Stocks have been getting crushed all year, but according to Goldman Sachs, now is the perfect time to starting betting on Apple options. Goldman Sachs’ options team has pointed out that Apple options prices are especially low right now compared to the the S&P 500, making it a great target for purchasing a ‘straddle’, which […]

(via Cult of Mac – Tech and culture through an Apple lens)


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Apple Offers ‘Proxy Access’, Making it Easier for Shareholders to Nominate Board of Directors

In a recent securities filing, Apple announced that it plans to offer „proxy access“, which allows longtime shareholders or a group of shareholders to nominate a member for its board of directors, reports the Wall Street Journal.

In a securities filing, Apple said its board of directors had adopted amended bylaws Monday that allow a shareholder, or a group of up to 20 shareholders, holding 3% of its shares continuously for three years to include board nominees in the company’s annual proxy statement.

The new bylaws allow shareholders to nominate up to 20 percent of Apple’s board of directors. Since Apple has 8 directors, shareholders would be allowed to nominate one director. Proxy access is a recent push by activist investors that seek to make changes on company boards, giving shareholders greater influence on company strategy and the ability to oust directors. Other prominent companies to adopt proxy access include McDonald’s, Goldman Sachs and Coca-Cola.

In March at Apple’s most recent annual meeting, a shareholder proposal that asked the Cupertino company to adopt proxy access garnered 39 percent support.
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Apple Looking to Raise $3.5 Billion From Bond Sale Involving Euros [Updated]

Following yesterday’s report that Apple was preparing to hold a new bond sale that includes a component denominated in euros, the company today filed a prospectus with the Securities and Exchange Commission outlining its general plans, which include two chunks of debt with staggered maturities. The Wall Street Journal has more details on the prospectus and how its yields will the lowest ever for 8-year and 12-year debt:

The iPhone maker is seeking to raise at least €1 billion ($1.2 billion) from two chunks of euro debt maturing in eight and 12 years.

Those would beat the lowest yields ever paid for euro-denominated, corporate bonds of these maturities, according to Dealogic data, reflecting solid confidence that the bonds represent a safe bet. Bankers managing the bond sale suggested the eight-year notes will give investors a yield of roughly 1.1% and the 12-year notes around 1.7%.

Apple spoke with investors on Monday about issuing bonds and will use the proceeds of the sale for general corporate purposes, including share buybacks and dividend payments.

This would mark first time that Apple would begin issuing bonds in euros, with Deutsche Bank and Goldman Sachs arranging the sale. This past April, Apple held a $12 billion bond sale, which followed a record $17 billion sale last year. Apple’s bond offerings are a part of its expanded capital return program, which primarily involves a major stock buyback program and a quarterly dividend that aims to return more than $130 billion to shareholders by the end of 2015.

Update: The Wall Street Journal has revised its article to note Apple is actually looking to raise €2.8 billion ($3.5 billion) in the bond sale.




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Apple to Target Emerging Markets with Low-Cost Phone to Launch in September at $199? [iOS Blog]

Piper Jaffray analyst Gene Munster late yesterday issued a new research note using average low-end smartphone pricing in emerging markets to argue that Apple’s rumored lower-cost iPhone will launch in September with a price tag of around $199 unlocked.

Munster examined smartphone pricing on 15 different models across six international markets (Germany, UK, France, China, Brazil and India) to find that lower-end smartphones average slightly over $200 unsubsidized. In China and India, the average prices are $138 and $140 respectively, while Apple’s cheapest existing phone, the iPhone 4, averages over $500.

We believe the last finding demonstrates that the biggest pricing gap for iPhone exists between the cheapest iPhone and the average low-end smartphone. This low- end segment is important given we estimate it is a $135B market in 2013 that Apple is currently not participating in (60% of smartphones, or 540m units at a $250 ASP).

Munster predicts Apple will announce its low-cost handset in September, and estimates that a $199 price tag would generate sales of 37 million phones in the rest of 2013, 96 million in 2014 and 170 million in 2015. While an iPhone at that price would carry much lower profit margins for Apple, Munster believes that the opportunity is so significant given the size of the potential market that Apple will be willing to focus on gross profit through volume rather than margins.

While rumors of a lower-cost iPhone have been picking up steam in recent months, a price point as low as $199 would seem to be overly aggressive for the company given its refusal to sacrifice quality to achieve a low price. Tim Cook noted at last week’s Goldman Sachs conference that „the only thing [Apple] will never do is make a crappy product“, and it remains difficult to see how Apple could provide the iPhone experience at such pricing.


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Tim Cook Speaking at Goldman Sachs Conference Tomorrow, Apple Providing Live Audio Stream

As noted by The Next Web, Apple has updated its investor page to announce that it will offer a live audio stream of a presentation by CEO Tim Cook tomorrow at the Goldman Sachs Technology and Internet Conference. Cook has spoken at the annual event several times in the past, including last year in his first visit as Apple’s CEO.

Cook is unlikely to make any product announcements during the session, but he should offer some insight into Apple and its business. As a result, Apple is providing a live stream of the session to provide public disclosure of any statements he might make that could influence trading in the company’s stock.

The session begins at 10:15 AM Eastern / 7:15 AM Pacific tomorrow.


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