AAPL: Borrowing Money To Repurchase Shares -- Doing The Math -- iPad Sales -- July 11, 2021

Jim Cramer says Apple, Inc, can now buy a boatload of its own shares -- a buyback -- having just borrowed $6.5 billion.

Let's do the math.

Outstanding shares: 16.53 billion (16,530,000,000)
Share price: $145.86
Market cap: $2.4 trillion ($2,411,000,000,000)

At $145.86, how many shares can be bought with $6.5 billion?

6,500,000,000 / 145.86 = 44,563,280

What percent of outstanding shares does that represent?

44,563,280 / 16,530,000,000 = 0.0026959 or 0.26959%.

Now, switching gears.

16,530,000,000 - 44,563,280 =16,485,436,710 shares.

Today, market cap of $2.411 trillion with share price at $145.86 and 16.53 billion shares.

Keeping market cap at $2.411 trillion; and dividing by "new number of shares after the theoretical buyback" = $2.411 trillion / 16,485,436,710 = $146.25.

So, Apple, Inc. borrows $6.5 billion for share buyback and all things being equal, increases the value of the shares from $145.86 to $146.25.

Hellooooo! AAPL shares were just shy of $150 before the buyback was announced and before the company announced it would borrow $6.5 billion for share buybacks.

In this market, share repurchases and fundamentals seem to make little (no) difference in the perceived value of these companies or their shares. It's all about MOJO, FOMO, YOLO, ESG, emotion, the Fed, and hucksters.

TheStreet headline: Apple stock gains on new bond sale plans: Jim Cramer sees share buybacks. 

Nonsense. 

They can spin this anyway they want, but the average mom-and-pop retail investor cares not for repurchase programs. 

On the other hand, the following note is what Apple fanboys like to see: Apple shipped more tablets than Samsung and Amazon did combined last quarter. Link here. 

While the iPad has long been the world's most popular tablet, newly published market research helps put Apple's lead into perspective.

According to estimates shared by research firm IDC, Apple shipped 12.9 million iPads in the second quarter of 2021. By comparison, IDC estimated that Samsung and Amazon shipped a combined 12.3 million tablets in the quarter, suggesting that Apple shipped more tablets than Samsung and Amazon did combined in the quarter.

iPad sales continued to surge last quarter as many people continue to work, learn, and communicate with others remotely. According to Apple CEO Tim Cook, the ‌iPad‌ had its best June quarter in nearly a decade, with the company reporting iPad revenue of $7.4 billion in the quarter, a significant increase over $6.6 billion in the year-ago quarter.

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Ted Lasso

Apple's biggest hit is an overnight success eight years in the making. Link here.