Tim Cook Announces expanded 30 billion dollar buyback of AAPL shares, and a 7 for 1 stock split.
In January of this year, after AAPL missed badly, the share price took a nose dive below $500.00 a share. And, truth be told, without some sort of intervention, sub $400 wasn’t out of the question. But what did Tim Cook do to stop the bleeding? He showed confidence in his own AAPL brand , and bought back 15 billion dollars worth of shares. The sell off stopped, and the share price rebounded, over the next couple of months to $550, only to start drifting back to the low $500 level, in early April.
What to do? Oh ! What to do ?
Well, if you’re Tim Cook, defending, and reinforcing confidence in the AAPL brand, you buy back shares . Another 30 billion dollars worth of them. You announce a 7 for 1 stock split, to reward your investors. And you spank your naysayers, and short sellers, and reward AAPL investors, by increasing the dividend by 8%. Good for the loyal AAPL investor, and nothing but pain for AAPL shorts.
A few weeks ago, in a follow-up to my first post on that initial AAPL sell-off, http://www.johngeorgecampbell.com/did-apples-chart-foretell-the-drop-in-share-price/I had commented on how Cooks buyback of 15 billion dollars worth of AAPLs’ shares had saved the day for AAPL, but questioned if he would be willing to spend another 15 billion dollars to defend his brand, and confirm confidence in it, should the share price start to decline again. Well, I guess I , and the rest of the marketplace, got his answer. Todays’ actions say to me that he’s even more confident in the AAPL brand, and even more sure of its direction, going forward. And in so doing, Cooks actions show himself to be a strong leader, and not someone whose going to shy away from a fight, or from doing whatever it takes to defend , and strengthen AAPL, as well as reward loyal AAPL investors.
For those continuing to question Cooks leadership, as the head of AAPL, you might just want to reassess your point of view. This guy’s the real deal.
AAPL was up 7.67%, to $5.65 in after hours trading, after the 30 billion expanded share buyback, and 7 for 1 stock split were announced, and after the shares had closed down 1.31%, at $524.75, during the regular trading session.
Quick technical take.
Something to notice as you look at the chart of AAPL on the day that this buyback was announced, are the white channel lines that seemed to be descending ever since December of 2013. Cooks’ announcement of the 30 billion dollar share buy back, 7 for 1 stock split, and 8 percent quarterly dividend, has sent the share price breaking above that upper channel line to $567.77, and above three fibonacci retracement levels.
Well played, sir. Well played.
Disclaimer: I have no position, short or long AAPL.