Warren Buffett Says Apple Should Buy Back Stock, Ignore Einhorn's Calls for Preferred Stock

Barron's reports on a couple of Apple-related comments made by Berkshire Hathaway chairman Warren Buffett during a three-hour appearance on CNBC's Squawk Box show this morning. Buffett, known as America's most famous investor, suggests that Apple ignore all of the recent controversy surrounding a recent proposal from Greenlight Capital's David Einhorn to issue new dividend-paying preferred stock and instead simply continue focusing on creating value for the company's existing stock.

I would ignore him. I would run the business in such a manner as to create the most value over the next five to ten years. You can’t run a business to push the stock price up on a daily basis. Berkshire has gone down 50% four times in its history. When that happens, if you’ve got money you buy it. You just keep working on building the value. I heard from people each time [Berkshire shares went down], saying why don’t you do this or that.

buffett_cnbc
Buffett suggests that increasing Apple's stock buyback would be the most prudent use of the company's cash and notes that he had previously discussed the possibility with Steve Jobs.

I don’t own any Apple and I haven’t, though I did talk with Steve Jobs a few years ago about what they might do with the cash. [...]

When Steve called me, I said, Is your stock cheap? He said, yes. I said, Do you have more cash than you need? He said, a little. [laughs] I said, then buy back your stock. He didn’t. Now, when our stock went from $90,000 to $40,000 to $45,000, I wrote about, we wanted to buy the stock. We didn’t quite manage to. But if you could buy dollar bills for 80 cents, it’s a very good thing to do.

Apple last year initiated a relatively small share repurchase program primarily designed to offset the issuance of new stock as employee compensation. The program was authorized to buy back approximately $10 billion in stock over three years and accompanied a dividend program to distribute cash back to investors.

But with Apple's share price having moved from approximately $600 at the time of the program's announcement to a peak of $700 and now back down to roughly $425, many are calling for Apple to accelerate its share repurchasing plans while the stock is at its lowest levels in 15 months.

Top Rated Comments

kirky29 Avatar
113 months ago
Listen to the man! I love Warren Buffett.
Score: 13 Votes (Like | Disagree)
Gordy Avatar
113 months ago
What most of the people moaning that apple should do this or that don't seem to realise is that Apple are not like most large companies.

The don't make stupid large purchases of other companies that just destroy value. EG Compaq, AOl, Skype etc.

They don't really care about short term stock price and in particular short term investors.

They base their entire company around making a small number great products that will fly off the shelves. It's a simple plan and has been working very well for them.
Score: 12 Votes (Like | Disagree)
basesloaded190 Avatar
113 months ago
No, Apple doesnt need that kind of burden on them.

Warren Buffet's investing guidance > Your investing guidance.
Score: 12 Votes (Like | Disagree)
LagunaSol Avatar
113 months ago
Google is at another all time high today for their stock and Apple is at another 52 week low today. Seems to be the norm for the last 6 months.

Not looking to invest in a tanking stock.

AAPL is greatly oversold and Amazon/Google's stock bubbles are filling rapidly (AMZN is insane). At some point they will pop and the smart money comes back to AAPL.

It's just a waiting game right now. We've been here before. AAPL always bounces back.
Score: 10 Votes (Like | Disagree)
SAdProZ Avatar
113 months ago
I'd listen to the man.
Score: 10 Votes (Like | Disagree)
3N16MA Avatar
113 months ago
Apple needs to introduce something very quick in order to stop this continual slide of their stock. Everyday it seems they hit a new low including today.

Tim Cook said he was concerned about the stock price but did nothing more than say they had great stuff in the works.

Buffet is an amazing investor and Apple had all time sales increase but the market is looking for future growth and without a new product I just don't see it happening.

Google is at another all time high today for their stock and Apple is at another 52 week low today. Seems to be the norm for the last 6 months.

Not looking to invest in a tanking stock with nothing but rumors to look at for the future quarter.
Good thing you are not in charge. Your answer is to "introduce something very quick."
Score: 9 Votes (Like | Disagree)

Related Stories

studio buds family

Beats Studio Buds Debuting Today With Active Noise Cancellation, Stemless Design, and More for $150

Monday June 14, 2021 8:00 am PDT by
We've seen a lot of teasers about the Beats Studio Buds over the past month since they first showed up in Apple's beta software updates, and today they're finally official. The Beats Studio Buds are available to order today in red, white, and black ahead of a June 24 ship date, and they're priced at $149.99. The Studio Buds are the first Beats-branded earbuds to truly compete with AirPods...
macos catalina legacy system extension alert

Apple Begins Warning Users That 'Legacy System Extensions' Won't Work With a Future Version of macOS

Wednesday March 25, 2020 9:53 am PDT by
Apple has shared a new support document that indicates kernel extensions — which it calls "legacy system extensions" — will not be compatible with a future version of macOS because they "aren't as secure or reliable as modern alternatives."System extensions are a category of software that works in the background to extend the functionality of your Mac. Some apps install kernel extensions, which...
General Spotify Feature

Spotify Pauses Plans to Add AirPlay 2 Support to iOS App [Update: Spotify Clarifies]

Friday August 6, 2021 9:07 am PDT by
See update at bottom of article Spotify this week confirmed that its plans to add AirPlay 2 support to its iOS app have been placed on indefinite hiatus. In an online discussion forum post, a Spotify representative said the streaming music service had been working on supporting AirPlay 2, but the company has paused the efforts "for now" due to "audio driver compatibility issues." The...
apple privacy

Apple Publishes FAQ to Address Concerns About CSAM Detection and Messages Scanning

Monday August 9, 2021 1:50 am PDT by
Apple has published a FAQ titled "Expanded Protections for Children" which aims to allay users' privacy concerns about the new CSAM detection in iCloud Photos and communication safety for Messages features that the company announced last week. "Since we announced these features, many stakeholders including privacy organizations and child safety organizations have expressed their support of...
youtube apple tv

YouTube Discontinuing 3rd-Generation Apple TV App, AirPlay Still Available

Wednesday February 3, 2021 3:09 pm PST by
YouTube is planning to stop supporting its YouTube app on the third-generation Apple TV models, where YouTube has long been available as a channel option. A 9to5Mac reader received a message about the upcoming app discontinuation, which is set to take place in March.Starting early March, the YouTube app will no longer be available on Apple TV (3rd generation). You can still watch YouTube on...
m1 macbook air

Kuo: Mini-LED MacBook Air Coming in Mid-2022

Thursday July 22, 2021 7:48 pm PDT by
Apple will release a new version of the MacBook Air around the middle of 2022, Apple analyst Ming-Chi Kuo said today in note to investors seen by MacRumors. The upcoming MacBook Air will feature a 13.3-inch mini-LED display, which would make it the second Mac to gain mini-LED technology after the 2021 MacBook Pro, which is rumored to include a mini-LED display and is expected to launch later ...
Apple Films Tom Hanks Finch First Look

Apple Original Film 'Finch' Starring Tom Hanks to Premiere November 5

Thursday August 12, 2021 8:52 am PDT by
Apple today announced that the original film "Finch," starring Tom Hanks in its titular role, will premiere on Apple TV+ on Friday, November 5 and shared a first-look image from the film. The first look at "Finch," shared by Apple. The film, which is anticipated to be an awards season contender, revolves around a man, a robot (played by "Get Out" actor Caleb Landry Jones), and a dog that form ...
whatsintheboxiphonexs

Apple's iPhone XS, XS Max and XR Won't Ship With Lightning to 3.5mm Headphone Jack Adapter

Wednesday September 12, 2018 12:58 pm PDT by
Since the headphone jack was removed from the iPhone with the launch of the iPhone 7, Apple has bundled iPhones with a Lightning to 3.5mm Headphone Jack Adapter for customers who continue to have 3.5mm headphones. With the launch of the iPhone XS, iPhone XS Max, and iPhone XR, Apple is discontinuing this practice and will not include the Lightning to 3.5mm Headphone Jack Adapter. On the...
macbook air m1 first benchmark

Apple Silicon M1 Chip in MacBook Air Outperforms High-End 16-Inch MacBook Pro

Wednesday November 11, 2020 4:43 pm PST by
Apple introduced the first MacBook Air, MacBook Pro, and Mac mini with M1 Apple Silicon chips yesterday, and as of today, the first benchmark of the new chip appears to be showing up on the Geekbench site. The M1 chip, which belongs to a MacBook Air with 8GB RAM, features a single-core score of 1687 and a multi-core score of 7433. According to the benchmark, the M1 has a 3.2GHz base...
iphone 13 teal with text

Apple Begins Preparation for iPhone 13 Production Ahead of Fall Launch

Monday June 28, 2021 3:29 am PDT by
We're just a few months away from when Apple is expected to reveal the 2021 iPhone, dubbed the "iPhone 13." In preparation for its launch, it has been pulling in shipments of different components needed to produce the new iPhones, according to a report from DigiTimes. In years past, Apple released its latest iPhone lineup, alongside a new Apple Watch, during a September event at Apple Park....