This is a strategic shift to turn the apple shareholder basis from a hedgefund hotel to a dividend fund stock. Very smart as in a deflationary shock hedge fund liquidate profitable assets first. With the recent AAPL performance the stock is probably on top of the list. Most interesting fact of the call: "Apple had a record weekend" Tim Cook (referring to sales start of the new ipad.)
Apple Announces Plans to Initiate Dividend and Share Repurchase Program
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Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program
#22I 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 bus…
They can't, unless they believe they'll be profitable doing it. It's not their money. That's a difference between Apple and Musk.
Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program
#23I 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 bus…
"Why not invest in space exploration , electric cars, self-driving cars, medical devices, green energy"
Why should they? Just throwing money at something doesn't guarantee success, and deviating from a company's core competencies can become a distraction that drags down the parts of a company that are succeeding. The dividend puts money back into the hands of investors that can choose to either re-invest back into Apple stock, or invest in companies whose core competency is space exploration, electric cars, or some of the other areas that wouldn't be in Apple's expected domain.
Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program
#24Not 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 +…
I can't think of a single business that Apple could buy (note: could buy, not 'look at the market cap and assume that is what it costs to buy the company') that would give it a level of control in an industry that the government would care about.
Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program
#25I 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 bus…
Maybe Apple doesn't feel they can be successful in areas other than consumer electronics. Trying to get into another line of business would be a HUGE distraction for management as well as the employees.
As for your green energy comment: I think Apple can do far more to promote green energy by being a customer and driving partners to produce better products than designing their own green business. For example, by buying a shitload of fuel cells for their datacenters, Apple funds Bloom's (or others') R&D efforts. Same with solar panels and other alternatives.
Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program
#26Why are Apple doing this?
I don't know much about stock and companies with money, but people on this thread are implying that Apple must get rid of it's cash? Why? Surely cash is good? Safety net? What if the sales plummet you don't go out of business, etc. etc.?
Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program
#27I 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 bus…
They can't, unless they believe they'll be profitable doing it. It's not their money. That's a difference between Apple and Musk.
that's not true. it is their money - the shareholders probably just wouldn't like the move and as a result, apples stock price would plummet (but that doesn't really need to bother them - it's not like somebody's just gonna buy the currently most expensive company in the world). however what would bother me more as an investor would be that apple apparently has no idea what to do with all that money (how about expanding R&D even more, like microsoft? and develop the next gen input devices (after touchscreens))
Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program
#28I 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 bus…
They can't, unless they believe they'll be profitable doing it. It's not their money. That's a difference between Apple and Musk.
Actually, I think that money is theirs. It's not part of their stock, it's cash that they have in reserve.
Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program
#29I 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 bus…
Because Apple's duty is not to pursue community goals. Furthermore, they don't have the competence to make those sorts of investments. Apple is not a philanthropic organization, and it would be to everyone's detriment if they were to act like one.
Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program
#30Earlier quoted context omitted.
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...
Haha, yep, that's me. I even owned the stock at the time. And yes, the stock was flat for the next 3-4 years, at which point I sold it and it continues to be flat.