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Apple Announces Plans to Initiate Dividend and Share Repurchase Program

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11–20 of 183 posts

Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program

#11
After reading the article about SpaceX, I think Apple should start their own program. They can afford it. SpaceX is being paid less than 2 billion to go to the space station. I'm thinking:

iRocket iSpaceShip iStation

See, there a product family already. And the best part is that the iSpaceShip can only dock with an iStation. So you gotta buy everything.

Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program

#12
post #4

The expectation of a larger dividend is what has been driving the share price up recently (which is why it will probably fall today). I don't know where that expectation came from. First Apple had the problem of repatriating international funds, so this was never going to be a $30, $50 or $100 (some crazy estimate) dividend. Second all precedent from similar companies issuing a first dividend (well not first for Appl…

For MSFT, they started dividends in Feb 2003, but then did a huge one time dividend in Nov 2004, $3.08 / share or about 11% of their stock price at the time. So there is precedent for tech companies issuing large dividends to get rid of cash stockpiles.

Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program

#13
post #6
post #3

Not exactly surprising or bold, i.e. it is the easiest way to deal with the surplus of cash. However, it could be seen as an indicator that Apple's management cannot figure out how to use all that cash to continue the company's growth. In that sense, the announcement of a dividend is a bellwether moment.

A big acquisition could just end up being a distraction from their core businesses. There is probably only so much you can spend on improving the current supply chain, $100 billion+ is a crazy large amount. What if they feel they can continue growth without spending every last cent?

They could buy a well run supporting business and leave it alone. Diversifying outside your core business is a bit risky, of course.

Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program

#14
post #3

Not exactly surprising or bold, i.e. it is the easiest way to deal with the surplus of cash. However, it could be seen as an indicator that Apple's management cannot figure out how to use all that cash to continue the company's growth. In that sense, the announcement of a dividend is a bellwether moment.

As the world's largest corporation, they are now under intense scrutiny by the US Government, which prefers to leash all massive corporations.

Apple is not allowed to spend its $100 billion buying companies, even if it wanted to. For example, they could buy HP and Dell and shut them down (maybe all PC manufacturers in fact, just with cash); such would not pass anti-trust concerns. They could buy Facebook with cash + stock; again, that wouldn't make it through anti-trust review. And so on.

Even though they're not formally regulated under anti-trust just yet as, say, Microsoft was - their actions are indeed strictly limited by what the government will allow them to do.

Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program

#16
post #10
post #4

The expectation of a larger dividend is what has been driving the share price up recently (which is why it will probably fall today). I don't know where that expectation came from. First Apple had the problem of repatriating international funds, so this was never going to be a $30, $50 or $100 (some crazy estimate) dividend. Second all precedent from similar companies issuing a first dividend (well not first for Appl…

It's actually trading +1.67% (pre-market).

which is up on Fridays close but down a few points on the highs reached in after-market over the weekend (~609).

get a better sense a bit after the markets open and then at the end of the day today.

this news should be a disappointment, but nothing about the hysteria around AAPL surprises anymore.

Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program

#17
post #3

Not exactly surprising or bold, i.e. it is the easiest way to deal with the surplus of cash. However, it could be seen as an indicator that Apple's management cannot figure out how to use all that cash to continue the company's growth. In that sense, the announcement of a dividend is a bellwether moment.

Or that is dosent need all of 100 billion dollars in cash to continue its growth.. If you look at the details, they will use 45 bil over 3 years, so in 2015 I believe they'll still have about 100 billion in cash.

They're now accumulating $40 billion per year in cash (for likely fiscal 2012 numbers).

So they'll continue to add to the stock pile of cash most likely. By 2015, under this plan, they'll have perhaps $135 to $150 billion in cash, unless they increase the buy-backs or dividend further, and that's assuming their annual profit stops growing.

Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program

#18
I am in no position to tell Apple how they should spend their money but after reading the articles about Elon Musk today I can't help but imagine how the world could be changed to become a better place with all this money.

And I don't mean that Apple should give money away to charities.

Why not invest in space exploration , electric cars, self-driving cars, medical devices, green energy,... It is not Apple's core business, but "phones" have not been the business of "Apple Computer" as well.

Apple has moved humanity forward with the personal computer and mobile phones. I don't want them to stop with computers, smartphones, tablets or TVs.

I want Apple to aim for more than just consumer electronics - but I guess we won't see that happening.

Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program

#19
post #12
post #4

The expectation of a larger dividend is what has been driving the share price up recently (which is why it will probably fall today). I don't know where that expectation came from. First Apple had the problem of repatriating international funds, so this was never going to be a $30, $50 or $100 (some crazy estimate) dividend. Second all precedent from similar companies issuing a first dividend (well not first for Appl…

For MSFT, they started dividends in Feb 2003, but then did a huge one time dividend in Nov 2004, $3.08 / share or about 11% of their stock price at the time. So there is precedent for tech companies issuing large dividends to get rid of cash stockpiles.

thats right, forgot about that special dividend. they also announced a huge buyback at that time as well.

here it is http://www.microsoft.com/presspass/press/2004/jul04/07-20boa...

I think their stock has been pretty flat since, and the dividend increases haven't done much to stimulate the price.

Edit: btw, is this you in the MF thread about it? :) http://ask.metafilter.com/11657/Why-Will-Dividend-Make-Micro...

Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program

#20
post #13
post #6

Earlier quoted context omitted.

A big acquisition could just end up being a distraction from their core businesses. There is probably only so much you can spend on improving the current supply chain, $100 billion+ is a crazy large amount. What if they feel they can continue growth without spending every last cent?

They could buy a well run supporting business and leave it alone. Diversifying outside your core business is a bit risky, of course.

Apple does not want to become a conglomerate. No matter how "alone" you want to leave a subsidiary it will always be a distraction to management.
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