[dpark]

Do you really not see the problem with this scenario? Apple "goes private" and somehow ends up in the hands of "a small pool of insiders"? How do those insiders end up holding 100% of the stock?

Right now insiders hold maybe 1% of Apple stock. So there's a 99% transfer of ownership happening when the company "buys itself". Does the company lose 99% of its value in this or is there somehow a transfer of about 500 billion dollars into the hands of these insiders? How are either of these situations not entirely terrible?

[icedchai]

I agree it is completely unrealistic. This is a fantasy scenario originally described on Seeking Alpha, and most of us are just having fun with it (I think.)

It will never happen and is logistically impossible: you are absolutely correct.

[dpark]

It's a flawed fantasy scenario though, and not just because it's implausible. For this to happen the vast majority of the company's value must be destroyed.

Imagine the final two shareholders, each holding one share with 250 billion. For the company to buy one of these shares, it will require 250 billion in cash. The value of the company will drop by 250 billion after this transaction (because it just spent all that money) and therefore half the value has been destroyed. Now do the math upward and you'll see that to buy the 3rd share, the company lost 1/3 of its value. And for the 4th it lost 1/4 and so on.

Putting the entire company into the hands of a few insiders would require destroying virtually all the value in the company, including liquidating its assets because the market cap is far higher than the cash on hand is or could be (because market cap will always reflect cash on hand). In fact, if Apple tried to "go private" this way, it would fail to do so because much of its value is in intangible assets like tribal knowledge that cannot be sold. It does not have tangible, fungible assets that total to its market cap.