What drives Apple? Tim Cook, executives, board of directors, customers, and somewhere down the line, shareholders. Yet, supposedly shareholders own Apple, so they should be able to call the shots, vote out board members and bring in people that shareholders– collectively, if that’s possible– want to run Apple.
It has happened to many companies, private and public, so why doesn’t it happen at Apple?
I see at least two major reasons.
Fragmentation. Some shareholders own large blocks of shares, but not enough to effect much change on the management climate, so Tim Cook is almost free to do as he sees fit (in concert with management, board members, and monetary requirements).
Dividends and Buybacks – Apple has so much money on hand that it cannot figure out what to do with it, so buying back stock makes shareholders feel good about their stock price (less competition for outstanding shares), and paying out quarterly dividends definitely makes shareholders feel good.
Many companies carry their worth in shareholder value; and worry less about profits and revenue, although growth can impact value.
Apple seems to care less about shareholder value these days and that’s a good thing. Shareholder value is overrated.
Sure, legally, shareholders are part owners of a company, but with Apple and many other successful, publicly traded companies, after the initial investment to get the company on the road to success, shareholders are worthless and bring nothing of value to a company.
Shareholder value is overrated because shareholders do not give money to the company when they buy stock. They’re simply buying and selling– trading– with other APPL shareholders. Apple Inc. gets nothing from the transaction, so shareholders provide no worth or value as so-called owners.
If Apple is well run and brings in profits on a diversified product base, great. But the hell with shareholders. They add nothing to the company and only take away Apple’s profits.