"With such amazing and innovative products, strong executive team and labor force, loyal customer base, significant capacity for debt, $109 billion of cash in marketable securities, it is surprising that Tim Cook has not already initiated a leveraged management buyout of the company."
So writes Marwaan Karame of IDG Capital Group in a provocative Seeking Alpha article backed with eleven spreadsheets, seven graphs and two Monte Carlo simulations.
You can read his analysis at Apple's Leveraged Management Buyout Potential. But don't miss the lively back and forth in the comment stream.
-- alistairt: One of the best examples I've seen to date of someone mindlessly applying a LBO model without consideration of the underlying business reality.
-- relayer75: Not going to happen. The largest LBO in history was RJR Nabisco, at $31 billion. This would be 18x that amount.
-- rroo: Cook is a level-headed guy, more like Gates or Buffet. LBO (money and power) are for those infected with megalomania.
-- rsbduff: This is the same attitude that has ruined many a company. They buy them...load them up with debt...rape them...then dump them on stupid investors...once again
-- Timmiesregular: There are some benefits to being public -- especially if you are profitable. Going private is only done when the company needs to be out of the public eye - like Dell.
-- Hank890: An AAPL LBO would be a major GIFT to any I-bank tasked with handling it. But it is not clear that the customers or employees would get much out of it. Just because an LBO is possible does not mean it is advisable.
-- wdchil: An LBO might have almost have made sense when Apple was below $400 but it certainly doesn't now. The debt would be in the "sketchy junk" arena.
-- petergrayhill: This latest surge from high 400's to 635 will end badly for the millions of mom'n'pop retail investors as well -- head fake to trade. LBO is a certainty within 5 years.
-- alexkeywest: An LBO of this company is delusional at best.
-- doc: "Its a wonder that Tim Cook has not pursued a leveraged management buyout already" He doesn't live in a theoretical world with too much time on his hands.
-- brittlerock: Does SA pay people to write this junk?
To answer brittlerock: Seeking Alpha's rates are $0.01 per page view. Authors of PRO articles receive a minimum guaranteed payment of $150-500.