Apple Announces Plans to Initiate Dividend and Share Repurchase Program • Hacker News Board

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

#31

Post by brown9-2 » Mon, Mar 19, 2012, 1:36 PM UTC

jcfrei wrote: post #27

tptacek wrote: post #22

Earlier quoted context omitted.

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 expand…

The shareholders of Apple are the owners of Apple. They get the final vote in the end, although it has to be translated through boards of directors and management.

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

#32

Post by lusr » Mon, Mar 19, 2012, 1:37 PM UTC

jcfrei wrote: post #27

tptacek wrote: post #22

Earlier quoted context omitted.

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 expand…

The Apple Board of Directors has a fiduciary duty to investors. If they take action that causes the share price to fall dramatically, thereby losing investor value, you can be pretty sure the Board will not last very long so yes it would matter.

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

#33

Post by shingen » Mon, Mar 19, 2012, 1:37 PM UTC

nikcub wrote: post #24

shingen wrote: post #14

Earlier quoted context omitted.

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.

HP, Dell, Facebook, ARM Holdings, TXI, Cisco, Google, Amazon, Oracle, Intel, AT&T, Verizon.

Apple could buy any one of them, either through friendly or hostile means. Not a single one of those would make it through anti-trust. Shareholders for Cisco would love to get $200 billion for their company; the US Government would never allow it in a million years. Shareholders for Amazon would love to get $200 billion, and they'd likely outvote Bezos' family holdings to agree to the purchase. Larry Ellison would sell Oracle for $300 billion in a heartbeat, and all shareholders would agree. Intel shareholders would instantly take a $300 billion bid; the US Government would never allow that purchase either. Apple also would never be allowed to gobble up either of the telecom monsters; AT&T shareholders would take a cash + $250 billion in shares deal, and Verizon shareholders would easily sign off on a $200 billion deal.

I think Apple would love to own their own telecom network, given their love of all things integrated. The things they could probably do in owning something like Verizon's network would be astounding. It would never be allowed.

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

#34

Post by celticninja » Mon, Mar 19, 2012, 1:37 PM UTC

bbhacker wrote: post #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 bus…

>Apple has moved humanity forward

I would say this is quite a lot of hyperbole. They have refined what others have made but they have not moved humanity forward.

The Haber-Bosch process, Norman Borlaug, the space race, the production of a silicon chip etc have al moved humanity forward. Apple in comparison made some trinkets.

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

#35

Post by maukdaddy » Mon, Mar 19, 2012, 1:37 PM UTC

jcfrei wrote: post #27

tptacek wrote: post #22

Earlier quoted context omitted.

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 expand…

  but that doesn't really need to bother them

Oh yes it better bother them. Cook and the Board have a fiduciary duty to the shareholders. They can't just go spending money however they want without regard to shareholder wishes or stock performance.

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

#36

Post by brown9-2 » Mon, Mar 19, 2012, 1:37 PM UTC

rmc wrote: post #26

Why 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.?

Apple believes that it can offer a better return on that cash by giving some portion of it back to it's owners/shareholders than by continuing to hold it all in reserve. That's really all this is about.

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

#37

Post by dereg » Mon, Mar 19, 2012, 1:38 PM UTC

jcfrei wrote: post #27

tptacek wrote: post #22

Earlier quoted context omitted.

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 expand…

Tim Cook said on the conference call that they have well more than enough to make strategic investments and to support growth.

Plus, a company's #1 goal is to create shareholder value.

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

#38

Post by brown9-2 » Mon, Mar 19, 2012, 1:39 PM UTC

nikcub wrote: 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…

I don't think you can really point to any one single reason why Apple's stock has been driven up so far lately with any sort of confidence. The market is not always rational when it comes to individual stocks.

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

#39

Post by huggyface » Mon, Mar 19, 2012, 1:40 PM UTC

dpcx wrote: post #28

tptacek wrote: post #22

Earlier quoted context omitted.

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.

I think they're saying that it's the shareholder's money, which is absolutely true.

However that doesn't preclude them from doing good with it, even in money-losing investments, beyond perhaps shareholder revolt ousting the board. There's an oft claimed belief that corporations are somehow bound by corporate law to do everything in their abilities to increase profits/returns for their shareholders. That is not and has never been true. Corporations are essentially mini-democracies, albeit where your say is scaled by your ownership: If the shareholders don't like it they have mechanisms to deal with it.

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

#40

Post by nikcub » Mon, Mar 19, 2012, 1:41 PM UTC

rmc wrote: post #26

Why 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.?

the Wall St logic is that since Apple are not spending the cash and it is just sitting there and earning almost nothing then you are better off giving it back to investors to invest for themselves (buying t-bills isn't hard, we can do that ourselves).

the century old idea of stocks (and what buffet et al subscribe to) is about generating a yield from profits. the secondary effect is that now those types of investors will buy into Apple since it yields a dividend, like a good old blue chip stock should (which in-turn raises demand for the stock, which in-turn raises the share price - meaning the cash is being put to better use).