Apple Conference Call • Hacker News Board

Re: Apple Conference Call

#51

Post by beatle » Mon, Mar 19, 2012, 2:30 AM UTC

DavidSJ wrote: post #49

dkrich wrote: post #40

I think a dividend is imminent because at the rate of inflation that is likely to occur over the next several years, holding that much cash is a huge mistake. If there isn't a use for it in the long-term, and they can reasonably expect to print more, I agree that they should start dispersing it to shareholders. Typically I would think the beginning of a dividend program to be a signal that the company has hit an inno…

at the rate of inflation that is likely to occur over the next several years, holding that much cash is a huge mistake Market expectations for inflation are usually factored into interest rates already. While the market could be wrong, Apple probably shouldn't get into the business of speculating on inflation rates.

>Market expectations for inflation are usually factored into interest rates already.

Actually that is not true. Historically Interest rates on currency-based investments have not caught up with inflation and taxes. Majority of Apple's cash is invested in long-term securities though so their investment is protected from inflation.

Re: Apple Conference Call

#52

Post by philwelch » Mon, Mar 19, 2012, 2:30 AM UTC

cageface wrote: post #22

cobychapple wrote: post #9

Completely wild, uninformed, and ignorant guess: They'll buy Twitter or Intel.

If anything Apple seems to be moving away from Intel chips and emphasizing their own ARM designs. Much more likely they will release an ARM-based laptop.

Nope--running x86 software natively (see: Windows, Linux) is still a competitive necessity. If Apple wanted their laptops to run on embedded-class processors with an x86-incompatible ISA and no other venders than themselves, they would have stayed with PowerPC.

Re: Apple Conference Call

#53

Post by beatle » Mon, Mar 19, 2012, 2:31 AM UTC

martingordon wrote: post #16

It's likely a dividend or a major infrastructure investment. If it were a major user-facing acquisition (such as a carrier or media company) or a new initiative they would have done an event for it.

More likely a major share repurchase. check my other post below for an explanation.

Re: Apple Conference Call

#54

Post by philwelch » Mon, Mar 19, 2012, 2:32 AM UTC

meastham wrote: post #14

krakensden wrote: post #12

Earlier quoted context omitted.

Intel's market cap is about twice their cash reserves, isn't it?

Less than twice, but still substantially more. Apple has $98bn [1] on hand and Intel's market cap is 138.54bn [2] [1] http://www.chicagotribune.com/business/sns-rt-us-applebre82f... [2] http://www.google.com/finance?q=intel

So they could easily afford a controlling share, not that they'd have anything interesting to do with it. As far as the Mac goes, Intel is doing more or less exactly what Apple would want them to do, and as far as iOS goes, Intel is already irrelevant.

Re: Apple Conference Call

#55

Post by apaprocki » Mon, Mar 19, 2012, 2:55 AM UTC

beatle wrote: post #48

dkrich wrote: post #40

I think a dividend is imminent because at the rate of inflation that is likely to occur over the next several years, holding that much cash is a huge mistake. If there isn't a use for it in the long-term, and they can reasonably expect to print more, I agree that they should start dispersing it to shareholders. Typically I would think the beginning of a dividend program to be a signal that the company has hit an inno…

>at the rate of inflation that is likely to occur over the next several years, holding that much cash is a huge mistake Actually majority of Apple's cash is invested in long-term and short-term securities so they are protected from inflation. I don't think Apple will pay a dividend. 1. the Massive increase in Apple's stock price is more than enough compensation for shareholders. A dividend will just be drop in the bu…

Completely with you and I hope it is a repurchase. Given the tax situation I don't see how a dividend would really be an effective use of the cash.

Re: Apple Conference Call

#56

Post by apaprocki » Mon, Mar 19, 2012, 3:03 AM UTC

liamk wrote: post #47

malandrew wrote: post #42

Earlier quoted context omitted.

Buying a position in a company like Samsung (solid-state memory or screen tech), Foxconn (manufacturing), LG Display (screen tech) makes sense. Apple is a hardware company, so pretty much all their investments are in hardware or software that increases the value of or margins on their hardware (like chips designers and firms that increase the value of OS X or iOS, which in turn increases the value of Mac and iOS base…

I'm not sure where you've read that Foxconn has a 1.1 trillion market cap. According to Bloomberg they have a cap of 149.5B [1]. Which makes significantly more sense than Foxconn being worth way more than Apple! [1] http://investing.businessweek.com/research/stocks/snapshot/s...

The market cap is in exchange-local currency. 147.76B TWD is about 5B USD.

Re: Apple Conference Call

#57

Post by brisance » Mon, Mar 19, 2012, 3:06 AM UTC

My uninformed opinion is that Apple will either announce a dividend or a stock split.

In theory a stock split/reverse-split has no impact on a stock's price movement, but those studies were done in the 90s. More recent studies on various stock exchanges have shown that splits/reverse splits have a statistically significant impact on price movement, with splits signaling a bullish move.

Splits may also help in narrowing the bid-ask spread which improves price discovery.

On the other hand, splitting a stock will increase transaction costs of delta-neutral hedged portfolios since strike prices of derivatives are closer and more delta are needed.

Re: Apple Conference Call

#58

Post by bgentry » Mon, Mar 19, 2012, 3:08 AM UTC

brisance wrote: post #57

My uninformed opinion is that Apple will either announce a dividend or a stock split. In theory a stock split/reverse-split has no impact on a stock's price movement, but those studies were done in the 90s. More recent studies on various stock exchanges have shown that splits/reverse splits have a statistically significant impact on price movement, with splits signaling a bullish move. Splits may also help in narrowi…

A stock split doesn't really have anything to do with their massive pile of cash, and they said that's all they'll be discussing on this call.

A dividend, while not out of the question, has not been something they've acted willing to consider in the past. That would be quite the change in their stance.

Re: Apple Conference Call

#59

Post by ams6110 » Mon, Mar 19, 2012, 3:14 AM UTC

rpledge wrote: post #4

cosjef wrote: post #2

Apple about to announce dividend program?

That's my guess. Or else they'll announce that they're starting a space program! My understanding is that ably $66 billion is offshore. I really expected them to sit on the cash until the US government gave them some sort of tax amnesty

Don't rule out something completely boneheaded. Jobs isn't there anymore. Remember Netflix/Quikster

Re: Apple Conference Call

#60

Post by brisance » Mon, Mar 19, 2012, 3:15 AM UTC

bgentry wrote: post #58

brisance wrote: post #57

My uninformed opinion is that Apple will either announce a dividend or a stock split. In theory a stock split/reverse-split has no impact on a stock's price movement, but those studies were done in the 90s. More recent studies on various stock exchanges have shown that splits/reverse splits have a statistically significant impact on price movement, with splits signaling a bullish move. Splits may also help in narrowi…

A stock split doesn't really have anything to do with their massive pile of cash, and they said that's all they'll be discussing on this call. A dividend, while not out of the question, has not been something they've acted willing to consider in the past. That would be quite the change in their stance.

You are right of course. I was thinking a split followed by the announcement of a dividend. In this way hedge funds and index funds can offload some of their AAPL exposure to retail investors who do seek a dividend.

I think Apple under Tim Cook is quite different, and is taking shareholders' interests very seriously. Why else would they adopt the resolution to have Apple directors being voted in by majority in the last shareholder meeting?[1]

[1] http://www.bloomberg.com/news/2012-02-23/apple-ceo-cook-says...