Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Apple Announces Plans to Initiate Dividend and Share Repurchase Program

apple.com

Post reply on HN
Print view View original

71–80 of 183 posts

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

#71

Post by funkah »

programminggeek wrote: post #47

I 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 sh…

> I 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.

The ever-present notion that the leadership team of what is now one of the largest companies in the world has no real idea what they are doing is fascinating to me. Perhaps they deserve a bit of credit.

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

#72

Post by arn »

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.?

Are you suggesting there is no upper limit amount of cash that Apple could accumulate that it wouldn't make sense to distribute some of it?

Apple has hit that limit, where it has plenty of money to do all that (safety net) and more.

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

#73

Post by nknight »

[deleted] wrote: post #48
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.?

[deleted]

> The CEO and board have a legal responsibility to use those funds in a way that maximizes shareholder return or return it to the shareholders.

Please stop spreading this and related myths about the legal obligations of corporate officers and directors. They have a fiduciary duty, which has nothing to do with "maximizing shareholder X", or taking any other particular course of action.

These myths are simply a way to fool the masses into accepting amoral people acting in ways detrimental to society.

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

#74

Post by monochromatic »

programminggeek wrote: post #47

I 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 sh…

The stock buyback sends exactly the same not-great message that the dividends do.

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

#75

Post by nikcub »

shingen wrote: post #33
nikcub wrote: post #24

Earlier 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.

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 t…

The test for antitrust is competition being reduced to the point that prices can be controlled with monopoly-like behaviour, or suppliers are cut out from supplying competition.

Applying that test to all of those companies doesn't give Apple supplier control, extensive pricing control or monopoly power in any market.

for eg. even acquiring HP would be total 'PC' market share of ~25%. The only one that may be a concern is ARM, but that doesn't mean mergers are stopped, it just means that agreements are reached (for eg. as with Google and ITAR)

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

#76

Post by tnorthcutt »

chalst wrote: post #65
programminggeek wrote: post #47

I 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 sh…

Both dividends and repurchasing are ways to distribute money to shareholders, and are from the point of view of the Miller--Modigiani theorem equivalent: from this abstract viewpoint, neither should affect the value of shares. The differences are 1. Buybacks are usually more tax efficient, because with dividends, profits are realised at the point of sale; 2. Buybacks tend to be procyclical, since companies get a barg…

they would need to issue bonds valuing around $500 million

$500 _billion_

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

#77

Post by unreal37 »

ANH wrote: post #55
programminggeek wrote: post #47

I 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 sh…

There are institutions, e.g. pension funds, that only invest in equities that provide a dividend. By offering a dividend, Apple is making its stock more widely available => more buyers => more shareholder value.

I laughed when I saw this in the press release. Anyone conservative enough not to buy a stock unless it provides a decent dividend would not buy Apple. Apple is not a value stock.

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

#78

Post by debacle »

It makes sense - this isn't a dividend to lure investors, it's an effort to reduce their cash reserves to a more sane level. There's nothing out there right now that Apple has use for that they can't buy, so why not reduce their reserves a bit?

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

#79

Post by adnam »

astrodust wrote: post #66
adnam wrote: post #45

Earlier quoted context omitted.

>> Apple has moved humanity forward Twaddle.

Why are you so dismissive? Apple is not the only company that has done this. Many companies had MP3 players prior to the iPod, but it was Apple's device that completely up-ended the music industry. Now people have access to entire libraries of music on their phone, and a store where they can buy even more. Can you really say the situation would be better if Apple had blown out in the 1990s and we were at the mercy of…

Hyperbole. OK, I agree, Apple has move humanity forward. But by mere millimeters compared to Alexander Flemming's mile.

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

#80

Post by snowwrestler »

brown9-2 wrote: post #38
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.

There's probably a good argument to made that it could be higher. Their P/E is somewhere around 16, compare to around 20 for Microsoft. Does anyone really think Microsoft is going to grow faster than Apple in the near future? I think the recent stock bump has basically been the market realizing that despite growing very fast, Apple's stock price still hasn't kept up with real revenue growth.
Post reply on HN