What Apple will do with its cash has long been a topic for discussion, with analysts and investment specialists crying for a dividend
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
#42Earlier 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.
As I've said on HN several times, Disney.
http://www.hnsearch.com/search#request/all&q=brudgers+di...
Disney would actually brighten Apple's halo, they have a devoted customer base which would accept the merger, and produce the most salable content in the world.
Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program
#43Earlier 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.
The board aren't the owners, they're just the board, the owners are the share holders. The company literally belongs to them, as does this money.
Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program
#44Earlier quoted context omitted.
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.
that's only true in theory. the largest investors are usually pension funds and in general they approve whatever the board recommends.
Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program
#45I 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
Twaddle.
Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program
#46I 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 buy Applebee's or invest in ice hotels?
At some level it's necessary for a company as tight and as focused as Apple is to maintain a cohesion in its corporate expanse. They could easily spend their money on growing the company in a myriad of ways. They could invest in pharmaceuticals or unicycles, but the farther afield they get from their core competencies the less likely they are to succeed, and the less likely they are to remain a single, cohesive company.
At the end of the day the key question remains: what is Apple other than just a big ol' wad of money? If Apple is something other than just an amalgam of various profitable enterprises then they should keep on being that instead of trying to be something they're not.
Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program
#47I hate to say this is a bad idea, but dividends signal to the market that you have no better way to spend your money than just giving it back to investors to spend elsewhere.
Combining a stock buyback plan is smart at least because perhaps they can balance the two and counteract the dividend effect by buying up shares.
In reality Apple could probably just become a private company by buying back most/all the public shares, but I doubt they want to do that. There are obvious PR benefits to being the "most valuable" or "most profitable" public company in the world.
Also, as far as space travel and exploration, that makes no sense for Apple. Apple is not a company that invests huge in R&D projects that won't pay off for decades. It would ruin their incredible focus on what they are doing now and for the next 5 or so years. If you get too far out ahead, you build things the world isn't ready for yet or you stop executing on the here and now products and services.
Apple's still got a ton of room for potential growth on phones, pc's, and tv's. There are also a whole slew of "post pc" computing interfaces and devices that haven't even been dreamed up yet. Space travel would be a distraction.
Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program
#48Why 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.?
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Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program
#49Earlier quoted context omitted.
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.
As I've said on HN several times, Disney. http://www.hnsearch.com/search#request/all&q=brudgers+di... Disney would actually brighten Apple's halo, they have a devoted customer base which would accept the merger, and produce the most salable content in the world.
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Re: Apple Announces Plans to Initiate Dividend and Share Repurchase Program
#50Earlier 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...
The dividend and buyback has been an attempt to mitigate the stock price flatness problem. It's a very serious issue for the company, especially at the employee level (what's the use of stock grants and options if they have no value beyond mere cash payments?