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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Alomex who wrote (14137)	5/29/1998 11:41:00 AM
From: rhet0ric	Read Replies (1) \| Respond to of 213177

Actually I was referring at the stock dilution/resistance by the convertible notes and the drop of current assets over the last two quarters. I'm not even remotely an accountant but the thing reads like they financed their profits from selling the silverware, so to speak. I'm not sure about the convertible notes issue, but the latter, the "current assets" issue, seems like a good thing to me. My understanding is that companies declare their stock that is currently on order, i.e. ordered by consumers/resellers but not delivered yet by Apple, as an account receivable. If Apple has decreased its lag time between manufacturing and selling, which it has, or if it has cleared out a lot of old stock, which it has too, then their accounts receivable will go down. Assuming that Apple accounts on a cash basis rather than accrual basis, this means that that money can be reported as a profit, which would not have been possible otherwise. rhet0ric

To: Alomex who wrote (14137)	5/29/1998 12:21:00 PM
From: Eric Yang	Read Replies (1) \| Respond to of 213177

"I'm not even remotely an accountant but the thing reads like they financed their profits from selling the silverware, so to speak." Alomex...I've been reluctant to post here, but you're persistent statement about the convertible notes prompts me to do so. I suggest you do a bit more research on the subject before jumping into your simplistic conclusion. The convertible notes is a complicated issue which is why I been putting off writing an article on it for months. The convertible notes will neither be converted anytime soon nor cause earnings dilution until Apple's earnings becomes significantly higher. I've done the calculation a few months ago. I'll dig it up again if I have to. If earnings were to be calculated based on the "if converted" basis, we would add about $9 mil to Apple's earnings per quarter. That would offset the dilutive effect of the virtual shares. Another misconception that I often hear every time the convertible notes issue comes up is the fear that the note holder will convert them to Apple stocks. The simple but flawed logic is that if they convert the notes to AAPL stocks they would turn around and sell the stocks and drive AAPL price down. This is nuts. If you really take the time to understand the issue you'll realize that as shareholders it is to our best interest that the note holders convert those notes to AAPL stocks as soon as possible. The notes holders could sell AAPL short when AAPL rises significantly over the $29.205 conversion price when they want to lock in their profit. That way it'll allow them to continue to 1) earn the interest on the notes, 2) cover their shorts and close the transaction without exercising and losing the convertible notes. This type of transaction may have been causing some of the resistance near $30 that we saw earlier this month as well as the increase of short interest this month. By the way, this month's short interest data is out. As of 5/12/98 17.4 million shares as of AAPL was shorted which is an increase of 2.9 million shares. Eric

To: Alomex who wrote (14137)	5/29/1998 2:17:00 PM
From: Kurt Starnes	Read Replies (1) \| Respond to of 213177

Correct me if I am wrong, but wasn't the reduction in assets attributable to a reduction in accounts receivable? And if accounts receivable were reduced, isn't that a good thing? Kurt

To: Alomex who wrote (14137)	5/29/1998 4:34:00 PM
From: Alomex	Respond to of 213177

Paul Krugman, on Apple vs. Microsoft: But the fact is that MS has been very careful not to use its undoubted power to practice any crude, obvious version of what is known in the trade as "vertical foreclosure." WordPerfect and Netscape work just fine on my Windows-based machine. This restraint may partly reflect Microsoft's market strategy--after all, Microsoft beat Apple partly because Apple did practice vertical foreclosure, and as a result inhibited the development of complementary software (although the main problem was Apple's persistent belief, despite all the evidence to the contrary, that everyone would be willing to pay a premium price for a niftier machine). For sure, however, Microsoft has mainly been restrained by the knowledge that any crude use of its power would indeed land it in court.