Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Adam Nash who wrote (23988)	4/14/1999 5:50:00 PM
From: tschneider	Respond to of 213177

On Valuation only...Apple great company but will be greater come next quarter...this was the quarter the boys were looking for to prove Apple coming back...There will be real pressure in am but should come out later at around 31-32...

To: Adam Nash who wrote (23988)	4/14/1999 6:38:00 PM
From: Jonathan Bird	Read Replies (1) \| Respond to of 213177

Unfortunately, that means we will have selling pressure as people who cash in their bonds get stock and then sell it. Consider that if the people who hold AAPL convertibles didn't believe the stock was a good investment then they either never would have bought the convertibles in the first place, or they would have sold them prior to conversion to someone who did believe. The convertibles just naturally fall into the hands of those who believe in the future of the stock, because the convertible feature is most valuable to those who believe the stock is valuable. Jon Bird

To: Adam Nash who wrote (23988)	4/14/1999 6:55:00 PM
From: rhet0ric	Respond to of 213177

Unfortunately, that means we will have selling pressure as people who cash in their bonds get stock and then sell it. Not so according to Eric Yang. His belief is that a large part of the unusually high short position in AAPL is from the convertible bond holders, who shorted AAPL at higher prices to lock in their profit. So they will buy back those shorted shares to match the bond/shares that they sell, with the net effect on AAPL's share price being neutral. rhet0ric

To: Adam Nash who wrote (23988)	4/14/1999 7:11:00 PM
From: Eric Yang	Respond to of 213177

"The fact is, the convertible debt is already included in the "fully diluted" earnings calculation. (Or so I have been informed)' That's correct Adam. The 22.6 million shares equivalent from the $661 million in convertible notes have already been factor into the diluted EPS for the last few quarters. Calling of the convertible notes is a very good thing. I asked Fred Anderson about whether Apple will call those notes by June 1st after the shareholder's meeting and he said that it would be up to the board of directors... but hinted that it would be the logical thing to do. The calling of the notes have a number of positive consequences... too many and complicated in fact for me to discuss in this post. But among the benefits is that it elimates the trading advantage that convertible notes holder has over regular share holders, will eliminate $661 million off of Apple's long term debt and actually add $661 million to Apple's book value. It will save $10.8 million or so in interest every quarter. It also makes it more likely for Apple to repurchase shares. (Once the notes have been converted by June 1st) Eric