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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

#111

Post by rmc »

arn wrote: post #72
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.

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?

No that sounds silly. But I don't know how much is enough and how much is too little. How do we know Apple has too much?

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

#113

Post by padobson »

andylei wrote: post #64
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…

> 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 this is exactly what they're trying to signal because its true. what's wrong with that? they've been extremely profitable while not spending the $45 billion they're giving back to shareholders, and they can continue to be profitable without it. > In reality Apple could probably jus…

I just want to point out that the amount of cash it takes to take a public company private is not equal to Shares * Market Price.

It's actually Float Shares * Market Price.

This doesn't make much of a difference in Apple's case, because most of their market share is floating on the public market. Quick calculations:

932.37M Shares Outstanding x ~$600/share = $559.4B Mkt Cap

931.79M Float Shares x ~$600/share = $559.0B Price to go Private

$400mm, in this case, doesn't make much of a difference, but if you talk about this for other companies in the future, keep it in mind.

Source: http://finance.yahoo.com/q/ks?s=AAPL+Key+Statistics

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

#114

Post by tonyx »

My intuition doesn't feel good about this. Whatever Tim Cook says, if apple draw attention away from product innovation into optimizing for financial markets and pleasing shortsighted loyalty-less public market investors, it would no longer be the Apple that we have come to know over the past decade. 

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

#115

Post by w1ntermute »

Although it's not part of their core business, from the news that's leaked about Steve Jobs' discussions with a CBS exec who refused to license CBS content because he felt he would be cannibalizing their profits, perhaps Apple could purchase one of these stations to spur the adoption of a new model for TV watching. It might cost them a pretty penny at first, but if it forces the other broadcasters to fall in line, it would be worth it.

Another obvious "lateral" purchase would be a cellular company. It doesn't make sense to keep pandering to the desires of the likes of AT&T and Verizon (4 GB data limit on LTE iPad WTF?) when there's so much more potential that could be realized with a good data plan for iDevices.

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

#116

Post by grandalf »

w1ntermute wrote: post #115

Although it's not part of their core business, from the news that's leaked about Steve Jobs' discussions with a CBS exec who refused to license CBS content because he felt he would be cannibalizing their profits, perhaps Apple could purchase one of these stations to spur the adoption of a new model for TV watching. It might cost them a pretty penny at first, but if it forces the other broadcasters to fall in line, it…

I imagine both of these would have been seriously considered if it weren't for antitrust concerns.

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

#117

Post by ajross »

ceejayoz wrote: post #109
ajross wrote: post #104

Earlier quoted context omitted.

Pixar didn't enjoy iPhone-like profitability ( edit: that's not the same as revenue, everyone knows that, right? ). And the reason is that it had very successful competitors. The Mac likewise. That's not good enough. Apple investors can make their own decisions about buying into new products like that. The GP post was implying that the "leadership team" was likely to do better. My point is that (1) no, they really ca…

> Pixar didn't enjoy iPhone-like profitability. Personally, I'd say Pixar seems to be the Apple of the movie industry. A few products, done right, and hugely profitable: > As of February 2012, its films have made over $7 billion worldwide, with its $602 million average gross by far the highest of any studio in the industry. In addition all the films produced by Pixar are among the fifty highest grossing animated film…

And... the expected Apple fan flames have begun. Pixar, iPod and iPad didn't have anything like the iPhone's level of profitability. I lump the latter in with the iPhone because the current implementations are one platform (no one calls it, ahem, "intellectually dishonest" to talk about "windows" profitability instead of "windows home" vs. "windows server" numbers).

But there's no need, so I'll simplify. If all Apple can do with that $100B is generate another Pixar, Macintosh, iPod or iPad, it is not enough and they should give the money back. To make it seem like a good bet, they need to produce another iPhone. And they can't, because no one can do that at will. We'll see another hit like that in 15 years or so if we're lucky.

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

#118

Post by Bud »

adnam wrote: post #79
astrodust wrote: post #66

Earlier quoted context omitted.

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.

I disagree. But it's interesting that you mention Alexander Fleming (it's one m in his name, btw). Fleming actually has some similarities to Apple's role in technology.

Fleming discovered penicillin and its effects, but he abandoned the discovery because he was unable to produce it in quantity, and also did not believe it would last long enough in the human body to cure infections.

It took the work of several others, and fifteen more years, to actually produce an effective drug.

Similarly, those who made various fundamental discoveries and inventions in computing are certainly significant and worthy of attention, but Apple also deserve much credit for making easy-to-use, refined products out of these discoveries, especially over the last ten years.

Giving people better tools makes them more productive in whatever endeavors they pursue. It would be short-sighted to not see Apple's value to society.

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

#119

Post by orky56 »

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…

It's pretty simple when you think about it. Apple has a certain hurdle rate for their projects that is extremely high, when compared to other companies. The only projects that can make it are ones that can draw on their existing resources. For them to go into something completely new would aberrate from their investment philosophy that has made them the most valuable company. On the new product front, I have more confidence in Apple knowing that they plan to think things through rather than announce something just for the sake of spending their hard earned cash.

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

#120

Post by jiggy2011 »

celticninja wrote: post #34
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.

You could argue that they have moved humanity forward in the sense of setting the bar higher for the sort of experience that people expect with everyday things.

Of course they are not primarily a science/research company so they rely on "standing on the shoulders of giants".

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