Apple CEO Tim Cook was facing a Congressional panel today with tough questions about the way the company has organized itself in an effort to lower its tax burden. But at the end of the questioning, John McCain had something else on his mind. That, friends, is what we call a softball.
The quintessential question of our time.
Edward Kleinbard, a law professor at USC speaking to NYT about Apple’s overseas tax situation — or lack thereof.
One potentially good thing out of all this, Tim Cook will address it directly tomorrow in front of the Senate:
Mr. Cook is expected to emphasize that Apple is most likely “the largest corporate income tax payer in the U.S., having paid nearly $6 billion in taxes to the U.S. Treasury” in the last fiscal year. “Apple does not use tax gimmicks,” Mr. Cook is expected to testify.
He is expected to seek to rebut the Congressional findings by arguing that some of Apple’s largest subsidiaries do not reduce Apple’s tax liability, and to argue in support of a sweeping overhaul of the United States corporate tax code – in particular, lowering rates on companies moving foreign overseas earnings back to the United States. Apple currently assigns more than $100 billion to offshore subsidiaries.
I figured this would lead to a change in tax policy. Now I’m sure of it.
I’ve fixed Nick Wingfield’s headline for The New York Times.
The main problem is that if you had written this post on September 19, 2012, the story would have been that Apple’s stock is up roughly $320 a share — nearly 100 percent — since the day Tim Cook took over as CEO.
Under Ballmer, Microsoft’s stock price has never been higher than when he took over. That was January of 2000 and the stock was around $100 a share. The closest the stock has come to that again under Ballmer was around $50 a share, leading up to the stock split in 2003. Since then, the stock has basically hovered in the $20s a share range for a decade.
In other words, when you point out that Cook’s tenure has seen a collapse of Apple’s stock price, it’s silly not to mention that it was a fall from the unbelievable highs that he also presided over. With Ballmer, he’s presided over a loss of the market value that was run up by his predecessor, Bill Gates.
Anyway, I actually agree with the sub-point — that a stock price is often not as closely tied to financial performance as one might imagine. That has been made very clear with Apple. Instead, it’s largely a game about trying to predict the future. And some now feel that Apple’s future is as bleak as the future people have been predicting for Microsoft for the last 10 years (myself included).
But Apple’s stock crash has a different feel, in my opinion. It feels like hedge funds and other large entities are playing a different game with the most valuable company in the world. And the people who don’t realize that are on the losing side of that game, and will remain there.
John Cassidy for The New Yorker:
During the past year alone, as Cook pointed out today, its revenues have risen by forty-eight billion dollars—more than those of Google, Microsoft, Dell, Hewlett-Packard, and Nokia combined.
You might think that would be enough to satisfy the velociraptors on Wall Street, but you would be wrong.
The entire piece is worth the read.
Speaking of the Goldman conference this morning, there was another nugget of information. Matthew Panzarino of The Next Web:
Apple CEO Tim Cook today announced that Apple had paid out $8B to developers, a number that displays an increase of $1B since the last time numbers were announced on January 13th. That displays a massive increase in acceleration for developer payouts.
That’s an insane increase in such a short amount of time. I wonder why.
Has Google ever announced this number for Android? It seems like a smart metric to play up if you want developers to focus on your platform…
Tim Cook, speaking at the Goldman Sachs investor conference this morning. He’s obviously referring to the lawsuit being filed by hedge fund manager David Einhorn.
What Tim Cook reportedly said to employees at the latest Apple Town Hall event this past week.
“The most important thing to Apple is to make the best products in the world that enrich customers’ lives. That’s our high order bit. That means that we aren’t interested in revenue for revenue’s sake. We can put the Apple brand on a lot of things and sell a lot more stuff, but that’s not what we’re here for. We want to make only the best products.”
Tim Cook, to NBC News’ Brian Williams.
Yeah, that’s about as close to a confirmation of the project as you’re going to get out of Apple…
“A lot of companies have innovation departments, and this is always a sign that something is wrong when you have a VP of innovation or something. You know, put a for-sale sign on the door.”
Tim Cook on why the deep bonds that customers form with Apple products matters — again from his great BloombergBusinessweek interview. You’ll note that Cook worked at Compaq immediately before joining Apple.
Tim Cook on what becoming the permanent CEO of Apple has been like. Definitely read the entire excellent, lengthy interview by BloombergBusinessweek’s Josh Tyrangiel.