What’s Important in the Financial World (2/11/2013)

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Apple Dividend Rumors

The latest speculation about Apple Inc.’s (NASDAQ: AAPL) financial plans is that it will raise its dividend. That may be a way to fend off activist investor David Einhorn, who wants the company to create more “shareholder value.” According to CNBC:

“While trying to extract information from AAPL (Apple) management is like squeezing ‘water from a rock,’ we did speak with AAPL CFO (Peter Oppenheimer) this past Friday and found the conversation helpful,” wrote ISI analyst Brian Marshall in a note to clients Sunday. “We touched upon a variety of topics, including capital allocation framework.” After speaking with Oppenheimer, ISI’s Marshall recommended back to the company in Sunday’s report that it increases its current 3-year allocation plan amount to $60 billion from $45 billion. His plan, which would use 50 percent of the firm’s annual free cash flow, puts two-thirds of the cash toward a dividend and the rest to buy back shares.

Value of Dell Shares?

Management of Southeastern Asset Management, the largest outside investor in Dell Inc. (NASDAQ: DELL), made the case that the personal computer company is worth $24 a share. That is a stretch by any sense of the imagination. Dell’s current price is only about $14, and, by most measures, its overall business prospects are deteriorating. According to The Wall Street Journal:

A person familiar with the matter estimated that Southeastern paid an average price for Dell of about $16.90, when factoring in all accounts managed by the firm.

In a lengthy analysis filed on Friday with the Securities and Exchange Commission, Southeastern argued that Dell is worth more than the offer and that the company would likely generate a better return to shareholders if it were to sell pieces of the business. Southeastern also outlined other options it said would be more attractive to shareholders than the proposed buyout, including a one-time dividend funded with Dell’s cash and some debt, or a buyout that gave current shareholders an opportunity to participate.

Microsoft Tablet Sells Out

Microsoft Corp. (NASDAQ: MSFT) said its Surface Pro tablet sold out almost immediately after going on sale. Analysts wonder whether the cause is rabid demand, or perhaps Microsoft only built a few of the machines. According to ComputerWorld:

Microsoft started selling its Surface Pro tablet on Saturday, and quickly exhausted its supply of the 128GB configuration.

While the less expensive 64GB device was also listed as out of stock Saturday on Microsoft’s online store, by Sunday it was again available.

The company acknowledged the outages.

“We’re working with our retail partners who are currently out of stock of the 128GB Surface Pro to replenish supplies as quickly as possible,” said Panos Panay, general manager for Microsoft’s Surface line, in a Saturday blog post. “Our priority is to ensure that every customer gets their new Surface Pro as soon as possible.

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