$100 Million Says Apple Is Cheap
In addition to the $50 billion that saysApple is cheap, we can now add another $100 million of funds conveying the same message.
The first figure refers to massive increase in Apple's share repurchase program, which represents the single largest authorization from any company in history. That hefty total is a vote of confidence directly from Apple that its shares are currently undervalued.
The latter figure corresponds to a personal investment from Russian billionaire Alisher Usmanov, who just invested as much in the iPhone maker. Usmanov is Russia's richest man, and made a fortune as an early investor in Facebook via Digital Sky Technologies. DST invested in the social network as early as 2009, and Usmanov reportedly profited a cool $1 billion through the controversial IPO.
The billionaire is now putting some of those gains toward Apple, expressing confidence in the company even after Steve Jobs' death. Especially when considering the freshly boosted capital return program, Usmanov thinks Apple will be "very promising" over the next three years.
In some ways, the personal investment speaks louder than Apple's repurchase program. Companies are inherently biased when it comes to valuing themselves, and buyback programs are frequently badly timed as a result. A $100 million vote of confidence from an outsider goes a long way.
Al Gore also loaded up recently. The former vice president and Apple director exercised options to buy 59,000 shares at the envious price of $7.48 in January heading into earnings. That cost Gore "just" $441,000 for shares that were valued over $29 million at the time. He'd been hanging on to those options for nearly a decade and they were set to expire in March 2013, but Gore's timing suggested he might have expected an earnings pop. If so, he was sorely mistaken.
Will Usmanov's $100 million bet pay off?
There's a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.
The article $100 Million Says Apple Is Cheap originally appeared on Fool.com.Fool contributor Evan Niu, CFA, owns shares of Apple. The Motley Fool recommends Apple and Facebook. The Motley Fool owns shares of Apple and Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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