Color me a little jaded, but I think Steve Jobs’ famed Reality Distortion Field is alive and well at 21st century Apple.
Google, Samsung, Microsoft, Carl Icahn and Apple all have one thing in common. Money. OK, two things. Each of them want more money and they don’t care much about from whence it comes. It’s all about the money.
Losers And Winners In Capitalism
Among major countries I doubt if pure capitalism exists any longer, thanks to a power-to-the-people balance of socialist actions, but there’s enough to excite and incite the 1-percent to action.
I have a theory about capitalism. In a capitalist society, everyone is out to get your money. Some by hook or crook, others more subtly, but the end game is the same.
Corporate raider Carl Icahn is the latest capitalist to set his sights on Apple’s vast riches, now again nearing $150-billion.
What does Icahn want? Apple’s money. What do Google, Samsung, Microsoft et al want? More money, and if it comes at the expense of Apple, fine. Or, if they can persuade the great unwashed masses of technology buyers to part with their money, that’s fine, too.
Apple makes money by creating a variety of well polished, seamlessly integrated products (with grossly high gross margins) which delight customers and help them soothe the pain of giving up a few of their hard earned dollars by using Apple’s high tech bling.
Google makes money by giving away software so people will use their apps and view their advertisements, while the company collects data to sell and adds it all to their growingly obscene profits.
Microsoft makes money by using the time honored fear, uncertainty, and doubt method, coupled with an occasional illegal strong arm to make businesses fear the company enough to part with money for annual licensing packages.
Carl Icahn makes money the old fashioned way. He bullies businesses into submission by buying a chunk of the targeted company and then pressures management to bend to his will or never hear the end of it. If the company’s stock goes up, Icahn might take his profits and run. If the stock doesn’t go up, Icahn might be satisfied with a buyout of his stock at a premium (just to make the noise go away).
Apple is sitting on tens of billions of dollars and Icahn, now the 23rd largest shareholder, wants all of it. No, not part of it. All of it. The problem here is that his notorious tactics work on lesser companies, but are not likely to budget CEO Tim Cook or result in an extra hefty payday for Icahn.
Why not? Apple is part of that capitalist society, too, and wants to hang on to as much money as possible, Icahn’s public tantrums not withstanding. Icahn’s $2.5-billion investment in Apple entitles him the right to make requests, make some noise, and even rattle a saber. But his half percent stake in Apple’s stock doesn’t give him the right to dictate to management how it should run the company.
As to profits and stock price, Apple did fine before Icahn came along, and the company is likely going to continue along that path.