Apple’s Samsung Holdings: A Profit Maker?

  • Posted: 26 March 2002 07:33 PM

    Samsung has announced that it will be buying back shares of its stock ahead of a possible conversion of bonds held by big PC makers that can be converted into stock. Apple is among the bondholders and Samsung’s stock has risen significantly since the beginning of the year.

    Samsung’s Share Buyback

    Apple has had some success with its financial investments in business partners and suppliers. For a time, Apple’s significant investment in Akamai supported higher prices for Apple’s shares prior to the dotcom implosion and the thrashing of Akamai’s share price.

    Apple’s investment in StongARM (a company that makes RISC-based chips such as the ones used in Apple’s now-cancelled eMate product) provided the company with a cash windfall as Apple’s management periodically sold the shares.

    Apple’s investment in Samsung was intended to shore up the company’s relationship with its Korean supplier, help Samsung increase manufacturing capacity for the components Apple needed and ensure that Apple had a solid supply of components that were in heavy demand world-wide.

    Apple’s management has periodically sold its holdings in its partners as Apple’s needs changed, to smooth rough spots in Apple’s quarterly sales and profits picture and to take advantage of remaining tax-loss carry forwards from the pre-Jobs era.

    Robert

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    <font size=-1>[ This Message was edited by: DawnTreader on 2002-03-30 11:44 ]</font>

         
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    Posted: 26 March 2002 07:33 PM #1

    Very interesting, and very enlightening. That might just shave off some of the iMac-related financial troubles this quarters.

    Very educational post, DawnTreader!

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    -Jon Roth

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