Largest Reduction By Tim Cook in 2 Years, Bad News For $APPL?

Although $Apple(AAPL)$ ‘s hardware innovations in recent years have not actually been too much, and its toothpaste-like updates have disappointed many Apple fans, the life cycle of its products has to be said to be still very strong.

Since 2016, after Buffett's company $Berkshire Hathaway(BRK.A)$ bought $Apple(AAPL)$, the company has been rising sharply, and its market value once exceeded $3 trillion. Buying $Apple(AAPL)$ at low prices has become Buffett's strategy, and Berkshire has become the company most closely tied to Apple.

Of course, two people are crucial to Apple's ability to create business miracles. The first is Steve Jobs, and the second is Tim Cook.

As the helmsman of $Apple(AAPL)$, Cook has pushed Apple to a new level. During his more than ten years at the helm, $Apple(AAPL)$ has also given Cook a lot of rewards. Among the components of Cook’s salary, stocks are Occupied the bulk.

Recent filings submitted by Apple to the U.S. SEC show that Cook has recently sold a total of 511,000 shares of $Apple(AAPL)$ , with a market value of approximately $87.8 million, and after-tax gains of $41.5 million.

It is reported that this is Cook’s largest reduction in holdings in the past two years.

The document also shows that after this reduction, Cook still owns about 3.3 million shares of $Apple(AAPL)$ . Based on the latest closing price, the value of his stock holdings is approximately $577 million.

So, will Cook’s reduction of holdings affect $Apple(AAPL)$ ’s stock price? Is its reduction a negative signal?

• In fact, $Apple(AAPL)$ 's stock price has been running at a high level since 2021. And Apple's cumulative gains have exceeded 36% in 2023.

• According to its financial report, $Apple(AAPL)$ 's current financial indicators are still strong. Therefore, from this perspective, Cook's reduction does not explain anything, nor does it represent a turning point for $Apple(AAPL)$.

• Moreover, in the past few years, whenever Apple's stock price fell significantly, $Berkshire Hathaway(BRK.A)$ could choose the opportunity to increase its holdings. Therefore, $Apple(AAPL)$ 's stock price is supported by long-term logic.

• In addition, most of Cook's salary structure is issued in the form of stocks. It is also normal for Cook to reduce his holdings of Apple shares.

Apple CEO Tim Cook holds up a new iPhone 15 Pro during an Apple event on September 12, 2023.

According to the data, Cook's salary in 2022 will be $99.4 million, but the basic salary is only $3 million, and stock incentives and bonuses will be approximately $83 million.

Due to the less-than-expected impact, Cook's salary will also drop significantly in 2023, to $49 million. However, the connection between its salary adjustment and Apple's performance has been strengthened, and its stock awards have been increased from the previous 50% to 75%.

From this perspective, it is normal for Cook to reduce his holdings in Apple, and the reduction of less than $90 million will have a minimal impact on Apple, which has a market value of 2.7 trillion. Even if the reduction is People run Apple.

To sum up, I personally think that Cook’s reduction in holdings can only represent his personal behavior. As a well-known company in a mature market, as long as there are no major problems in the company itself, the impact of his personal reduction on the company will be relatively small. . In addition, Apple's continuous repurchases over the past few years have also given its stock price a basis for bullishness.

In addition to Apple, well-known companies such as $Microsoft(MSFT)$, $Berkshire Hathaway(BRK.A)$, and $Alphabet(GOOGL)$ have also continued to repurchase at high levels.

For example, this time $NVIDIA Corp(NVDA)$ announced a repurchase of $25 billion at a historical high. Therefore, from this perspective, Cook's personal reduction will not cause any pressure on Apple.

As of Friday, Apple's stock price rose 3.67% for the week.