Taking Apple Private: Makes Sense but Nobody Has the Money

Matt Yglesias:

The current trajectory Apple is on, in terms of both share price and management strategy, is toward some kind of eventual management buyout scenario. But we’d need to walk another several hundred billion dollars down this road before that became feasible.

Yours truly, back in February:

Before Cook initiated the dividend last year, in the back of my mind I always wondered if “going private” was not the reason for Apple’s plan to just hoard its profits. Sort of “fuck you” insurance against Wall Street. (Even with the dividend, though, their cash continues to grow at an impressive rate. It’s sort of a token dividend.)

Legally, I think it’s impossible. A pipe dream. But culturally, Apple as an institution does seem better suited to being a privately held company.

According to Yglesias, I was wrong that it’s a legal problem. It’s simply a matter of time, if Apple continues to accumulate massive amounts of cash and its stock price remains so depressed on a P/E basis. (How low has Apple’s valuation dropped? As of today it’s lower than Dell. Wall Street thinks Dell has a brighter future than Apple.)

★ Thursday, 18 April 2013