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Post by phoebear611 on May 9, 2014 3:21:14 GMT -8
Good morning... While you were sleeping... --- Asia mixed --- Europe in vampire red mode --- US futures looking weak News on Apple:The BEAT goes on, the BEAT goes on Drums keep pounding a rhythm to the brain La de da de de, la de da de da It's ALL about the supposed BEATS acquisition this morning. My take on it is that Apple leaked this as a trial balloon to investors/public or as a strategic negotiation tactic. My gut tells me this acquisition may very well not even happen. There has been no confirmation other than from news outlets saying that a conversation was had. Analysts - for the most part - questioning WHY. Anything BEATS has, Apple could have done on their own. Will AAPL buy them and just blow them up? (because they didn't want GOOG to acquire the streaming part) There are a million theories out there this morning. Everyone is still scratching their heads. A smaller rumor - and one hardly not mentioned - is that iPhone 6 will come a month ahead of time - in August instead of September. Anyway, markets are not liking this whole thing and certainly not understanding the rationale to any great extent. Try to enjoy the day but it doesn't look like it's going to be a very good one for the most part.
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Post by appledoc on May 9, 2014 3:30:45 GMT -8
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Post by rob_london on May 9, 2014 3:32:22 GMT -8
I must admit that I had never heard of Dr. Dre until yesterday. What has he got a doctorate in?
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Post by macwire on May 9, 2014 3:38:46 GMT -8
This is chump change. Apple makes this in like a few weeks. Who cares lol.
FWIW all I see is kids and sports stars with these headphones. Very recognizable and very much a premium status thing.
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Mav
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Post by Mav on May 9, 2014 3:52:52 GMT -8
Alcohol + acquisition talks = potentially iffy PR?
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Post by nagrani on May 9, 2014 3:55:09 GMT -8
Apple can create a subscription model for music that can work on android phones. Think about that
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Post by phoebear611 on May 9, 2014 3:55:36 GMT -8
AAPL has never bought a brand ... they ARE the brand. The headphones that Beats puts out probably has Jony Ive gagging as far as design is concerned. Furthermore, various outlets have commented that acoustically they are not even that great. So I'm having difficulty believing it's about the headphones....must be the streaming. HOWEVER, this will be (if it happens) the largest acquisition that AAPL has ever made, correct? And I'm just not feeling it people....I keep telling myself that I'm lost in the rough and not seeing the diamond. Someone let me know when they have their epiphany on this move.
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Post by macwire on May 9, 2014 4:11:33 GMT -8
Phoebez I don't like the deal but it wasn't really that expensive or important tbh. Shrug.
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Post by hledgard on May 9, 2014 4:13:44 GMT -8
I do not see the epiphany either. There has to be a reason.
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Post by Lstream on May 9, 2014 4:18:36 GMT -8
Apple can create a subscription model for music that can work on android phones. Think about that Why couldn't they do that anyway if they wanted to? Without buying this company.
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Post by appleaddict on May 9, 2014 4:29:15 GMT -8
I do not see the epiphany either. There has to be a reason. Well we needed *some* reason to leave the $600s in the rearview mirror.
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Post by osx10 on May 9, 2014 4:31:38 GMT -8
This doesn't make sense.
Why spend 3.2b for Beats when for a little bit more they could have purchased iheartradio from Clear Channel?
For 10b, they likely could have bought all of Clear Channel which would have given them a lot of cross-platform media opportunities and access to a local/national sales structure that could propel iAds sales.
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Post by incorrigible on May 9, 2014 4:46:03 GMT -8
There must be a reason, and a good one. We just don't know and can't figure out what it is. Might be some new tech they have in the works that no one knows about.
With Apple's conservatism with regard to acquisitions, there must be *some* explanation. We'll know soon enough.
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Post by zzmac on May 9, 2014 4:55:03 GMT -8
Let's hope there's a really great reason because this was looking like a banner year up until now. And for those who think 3.2 Billion is chump change, give your head a shake.
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Post by macwire on May 9, 2014 5:47:46 GMT -8
Let's hope there's a really great reason because this was looking like a banner year up until now. And for those who think 3.2 Billion is chump change, give your head a shake. Exaggerate much?
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Post by hamourabi on May 9, 2014 5:49:50 GMT -8
This Beat stuff stinks stock manipulation.....
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Post by Lstream on May 9, 2014 6:07:24 GMT -8
This Beat stuff stinks stock manipulation..... Nope - not manipulation. Just rational reaction to a deal that on the surface makes no sense.
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Post by dreamRaj on May 9, 2014 6:08:32 GMT -8
The language Tyrese and Dr Dre use in the video is so foul and soo not Apple that it overshadows (for the moment) any good that might be there for Apple in this deal.
Disappointed!
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bud777
fire starter
Posts: 1,354
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Post by bud777 on May 9, 2014 6:35:23 GMT -8
A day or so ago I posted a simple conjecture that the daily fluctuation in Apple would increase after the split. This was based on the historical performance of the stock pre and post the last split. I guess one could rationalize the results by saying that lower entry price might bring in more retail buyers, hence more activity.
Given that a 2:1 split moved the average daily price change from .791 to 1.146 (about a 45% increase), one would expect the 7:1 split to have a more significant effect. I do not think the effect would be linear, but it makes sense to me that more people would be willing to buy/sell if they are gambling with say $8000 rather than $$56,000. I am of course assuming a bias toward 100 share lots.
Lets assume that the above tendency is repeated and the average price change increases by a factor of say 2. Wouldn't this increase the beta and thus the option volatility? Is there an opportunity here to make some money off the subsequent change in option prices? So far, I cannot see that option prices have changed in anticipation of this. Those of you out there who really understand the Black-Schole equation, please help out a barefoot pilgrim who is trying to learn.
Edit: I guess I should have referred to Brennan and Schwartz since these are not European options. I obviously could use some help in understanding how options are priced, specially American options.
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Post by firestorm on May 9, 2014 6:46:50 GMT -8
Apple's management consists of a bunch of older guys and gals; with this acquisition they are trying to buy youthfulness and coolness.
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Post by redinaustin on May 9, 2014 6:51:53 GMT -8
@onnyevans_cw: Tim Cook is building a world-class brains trust to carry Apple forward t.co/oLEqHdcxtG via @computerworld
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Post by gtrplyr on May 9, 2014 6:54:43 GMT -8
Apple's management consists of a bunch of older guys and gals; with this acquisition they are trying to buy youthfulness and coolness. I have two young kids .... EVERY one of their friends love apple ... They already have the cool factor with the youth. I'll hold out on passing judgement until I get a better picture of why they might be .... "Might be" interested . I can't see it but I don't have the insight apples management team does.
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Post by appledoc on May 9, 2014 6:56:13 GMT -8
The language Tyrese and Dr Dre use in the video is so foul and soo not Apple that it overshadows (for the moment) any good that might be there for Apple in this deal. Disappointed! Who cares about the language. It's the fact that they're talking about the deal that makes me mad.
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bud777
fire starter
Posts: 1,354
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Post by bud777 on May 9, 2014 7:10:50 GMT -8
In looking at a few papers on the subject of option pricing, I realize how complex it really is. Sorry to ask a question that would require so much work to answer. I'll keep reading and see what I can figure out. For those who do understand it, i hope you can make some money off this
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Post by zzmac on May 9, 2014 7:37:13 GMT -8
Apple's management consists of a bunch of older guys and gals; with this acquisition they are trying to buy youthfulness and coolness. If Tim Cook starts wearing his pants down below his ass I'm selling my shares.
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Deleted
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Post by Deleted on May 9, 2014 7:39:10 GMT -8
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Mav
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Post by Mav on May 9, 2014 7:52:50 GMT -8
Apple's management consists of a bunch of older guys and gals; with this acquisition they are trying to buy youthfulness and coolness. If Tim Cook starts wearing his pants down below his ass I'm selling my shares. IF THIS FORUM STILL HAS A QUOTABLE SECTION THIS MUST BE QUOTED
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Post by artman1033 on May 9, 2014 8:39:23 GMT -8
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Post by archibaldtuttle on May 9, 2014 8:56:14 GMT -8
With the market flat to slightly up, news that Apple may have bought a company for $3.2 billion cut $5 billion off their market cap. As much as I don't like the price, I don't think Beats is worth negative 1.8 billion.
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Post by Lstream on May 9, 2014 9:38:20 GMT -8
With the market flat to slightly up, news that Apple may have bought a company for $3.2 billion cut $5 billion off their market cap. As much as I don't like the price, I don't think Beats is worth negative 1.8 billion. Most people don't do this math. They look at overall sentiment change driven by an action. And this action has dumb written all over it. I like the characterization - buying a fad. This deal on the surface says so many bad things about Apple management, that I would not be surprised to see more selling.
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