Is Carl Icahn Buying The Wrong Stock?
-
Upload
longboardam -
Category
Business
-
view
2.388 -
download
3
description
Transcript of Is Carl Icahn Buying The Wrong Stock?
Is Carl Icahn Buying the Wrong Stock?
October 25, 2013 Microsoft Corp. NASDAQ: MSFT
Disclosure!
2 For Investment Professional Use Only
Longboard Asset Management, LLC (“Longboard”) is an investment advisor to funds that are in the business of buying and selling securi>es and other financial instruments. Longboard currently has a long posi>on in MicrosoB Corpora>on (“MicrosoB”) common stock. We do not own any op>ons on MicrosoB common stock. Longboard will profit if MicrosoB stock increases in value and will lose money if it decreases in value. Longboard may change its views about or investment posi>on in MicrosoB at any >me for any reason or for no reason. Longboard may buy, sell, cover or otherwise change the form or substance of its MicrosoB investment. Longboard disclaims any obliga>on to no>fy the market of any such changes. The informa>on and opinions expressed in this presenta>on (the “Presenta>on”) is based on publicly available informa>on about MicrosoB. Longboard recognizes that others may disagree with Longboard’s analyses, conclusions and opinions. The Presenta>on includes forward-‐looking statements, es>mates, projec>ons and opinions. Such statements, es>mates, projec>ons and opinions may prove to be substan>ally inaccurate and are inherently subject to significant risks and uncertain>es beyond Longboard’s control. Although Longboard believes the Presenta>on is substan>ally accurate in all material respects and does not omit to state material facts necessary to make the statements therein not misleading, Longboard makes no representa>on or warranty, express or implied, as to the accuracy or completeness of the Presenta>on or any other wriNen or oral communica>on it makes with respect to MicrosoB and Longboard expressly disclaims any liability rela>ng to the Presenta>on or such communica>ons (or any inaccuracies or omissions therein). Thus, shareholders and others should conduct their own independent inves>ga>on and analysis of the Presenta>on and of MicrosoB and other companies men>oned. The Presenta>on is not investment advice or a recommenda>on or solicita>on to buy or sell any securi>es. Except where otherwise indicated, the Presenta>on speaks as of the date hereof, and Longboard undertakes no obliga>on to correct, update or revise the Presenta>on or to otherwise provide any addi>onal materials. Longboard also undertakes no commitment to take or refrain from taking any ac>on with respect to MicrosoB or any other company. As used herein, except to the extent the context otherwise requires, Longboard includes its affiliates and its and their respec>ve partners, directors, officers and employees.
!
3
To Buy, or Not To Buy, That is the Ques3on
A No Brainer?!
4
Apple Buyback Thesis § Carl Icahn is calling for a
$150 Billion Apple share buyback
§ Says buyback is a “no
brainer” § Thinks Apple board is
doing a poor job § Believes the stock is
undervalued
Is Carl Icahn Missing Something?! § We believe Apple
shareholders over the next 5 years would be far beMer off if Tim Cook ignored Mr. Icahn and instead bought $150 Billion of MicrosoR
5
The Future of MicrosoB?
$15
$20
$25
$30
$35
$40
$45
$50
$55
$60
? Microsoft: MSFT
?
Apple Value Hinges on 3 Key Questions!
6
Key Ques>ons § Does Google, Samsung,
Amazon & MicrosoR building their own Android OS devices help or hurt aggregate Apple demand?
§ How vulnerable is iPad
demand to more produc3ve and innova3ve devices?
§ How aMrac3ve are higher
produc3vity tablet devices which run both Windows + Android to PC buyers?
Why is Tim Cook Afraid of Microsoft?!
7
If the Apple buyback is such a “no brainer”, why is Tim Cook so worried about MicrosoB? “Our compe33on is confused. They’re turning tablets into PCs and PCs into tablets. Who knows what they’re going to do next?” Tim Cook just dedica3ng his key note speech to talk about a compe3tor. If MicrosoR is confused and irrelevant, why is Apple spending so much 3me talking about the Windows 8 strategy during their own product launch?
Same Picture, Different Views!
8
MicrosoB Percep>on = Confused MicrosoB Reality = Success
Microsoft is Out Innovating Apple!
9
Windows 8 Device Strategy § MicrosoR Surface plaaorm is a
completely new category of tablet devices
§ Delivering the most produc3ve
and innova3ve compu3ng devices on the planet
§ PC users want a unified new
experience which delivers Android + Windows on one device
§ Leveraging Android is the future
of MicrosoR device strategy and Tim Cook knows that’s a serious problem for Apple
Will Surface 3 Include Android?
Apple Vulnerable to Competition!
10
Apple Threats § Fickle Consumer Dependence § Hit product dependent § iOS geeng flanked by Android § Dual Boot Windows + Android
Devices become iPad category killer
§ Weakness in Enterprise § MicrosoR Mojo is Back
Summary!
11
Mr. Icahn has Right Idea, Wrong Stock § We believe an Apple buyback is not as
much of a no brainer as Mr. Icahn thinks § A large buyback does not improve
Apple’s strategic posi3on or hedge serious fundamental business risks on the horizon
§ Buying $150 Billion of MicrosoR stock
gives Apple economic exposure to enterprise market dominance, hedges fundamental business risk and provides a beMer long term value and risk reward use of cash for Apple shareholders
§ If Mr. Icahn truly cares about maximizing
long term value for Apple shareholders, he should be pitching MicrosoR stock to Tim Cook
About Longboard!
12
An alterna>ve approach to naviga>ng the investment ocean Longboard is an asset management firm specializing in trend following strategies. The firm’s principals have been inves3ng in and researching trend following strategies since the late 1990s. We manage both private investment funds and mutual funds applying our trend following investment style.
“Trends come like a series of ocean waves, bringing the high 3de when things are good and, as condi3ons recede, the low 3de appears. These trends come unexpectedly, unpredictably, and they have to be weathered with temperance, poise, and pa3ence-‐ good or bad.” Jesse Livermore, Reminiscences of a Stock Operator
Contact Us!
13
To learn more about Longboard, connect with us at:
info@longboard-‐am.com 602.910.6961 2355 East Camelback Road, Suite 750 Phoenix, Arizona 85016 www.longboardmutualfunds.com www.longboard-‐am.com For media inquiries, please contact: Dukas Public Rela>ons [email protected] 212.704.7385