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

Apple has a record $250B in the bank

arstechnica.com

Post reply on HN
Print view View original

11–20 of 21 posts

Re: Apple has a record $250B in the bank

#11

Post by easilyBored »

AndrewKemendo wrote: post #6

The St. Louis FED did a story on this last year [1] that basically said there are two main reasons why you would stockpile cash if you're a regular company (non-finance, non-utility): precautionary motive and repatriation taxes. With respect to the first it comes down to uncertainty and credit constraints. Since the credit issue is basically zero for thees companies then it likely comes down to uncertainty in the mar…

Apple's "burn rate" is about 33BN a year, which means that 250BN would give them ~5-6 years to find a new market in the event of a nuclear holocaust if they kept spending the same with ZERO income.

In your case, that burn rate would go down to $5 billion in a year or two. Apple justifies the burn rate because it's making a killing, when that stops...

Lower the corp tax and they'll repatriate the day after.

Re: Apple has a record $250B in the bank

#12

Post by AndrewKemendo »

valuearb wrote: post #7
AndrewKemendo wrote: post #6

The St. Louis FED did a story on this last year [1] that basically said there are two main reasons why you would stockpile cash if you're a regular company (non-finance, non-utility): precautionary motive and repatriation taxes. With respect to the first it comes down to uncertainty and credit constraints. Since the credit issue is basically zero for thees companies then it likely comes down to uncertainty in the mar…

No, it's all the massive taxes on repatriated profits. Apple doesn't even have $250B because it borrowed $78B to pay out as dividends. When the 12% tax holiday is approved, almost all of that money comes back and most gets paid as dividends. You don't need it overseas for safety, and you don't need to burn $30B a year if your revenues disappear. A "skeleton crew" can spend a couple billion a year developing new profi…

You don't need it overseas for safety, you just keep more of it for safety.

Re: Apple has a record $250B in the bank

#13

Post by jjtheblunt »

arcanus wrote: post #2

I can't help but think of Peter Thiel's very appropriate comments (admittedly targeting GOOG, but still applies) here: https://www.youtube.com/watch?v=2Q26XIKtwXQ As I read it: if AAPL had any idea at all what to do with this cash, they would deploy it. They are completely out of innovative ideas, and are just turning the product crank. Instead, they should return $$ to investors in the form of a dividend.

You didn't justify the "should return" sentence: why should they?

Re: Apple has a record $250B in the bank

#15

Post by valuearb »

AndrewKemendo wrote: post #12
valuearb wrote: post #7

Earlier quoted context omitted.

No, it's all the massive taxes on repatriated profits. Apple doesn't even have $250B because it borrowed $78B to pay out as dividends. When the 12% tax holiday is approved, almost all of that money comes back and most gets paid as dividends. You don't need it overseas for safety, and you don't need to burn $30B a year if your revenues disappear. A "skeleton crew" can spend a couple billion a year developing new profi…

You don't need it overseas for safety, you just keep more of it for safety.

You don't need $250B for "safety". Apple needs maybe $50B tops. If it has a bad year it's going to slash spending. It's got professional management that know pretty much how much it will make in a quarter and how much it can spend. It also has access to further financing, both debt and equity.

Repatriate the $250M, payoff the $78M in debt, and pay out at least $100M to shareholders. Apple will have over $100M in cash again by the end of the year.

Re: Apple has a record $250B in the bank

#18

Post by ksec »

arcanus wrote: post #2

I can't help but think of Peter Thiel's very appropriate comments (admittedly targeting GOOG, but still applies) here: https://www.youtube.com/watch?v=2Q26XIKtwXQ As I read it: if AAPL had any idea at all what to do with this cash, they would deploy it. They are completely out of innovative ideas, and are just turning the product crank. Instead, they should return $$ to investors in the form of a dividend.

How about starting their Innovative ideas does not require $250B?

But I have always wanted Apple to 1. Go into Property market. Not sure if that is possible for their choice of Location, but may be they should pick 50+ flagship store and actually own it.

2. Build a worldwide Neutral LTE / Wifi Network.

Both Huge in capital investment but offer a long term return.

Re: Apple has a record $250B in the bank

#19

Post by sammydavis »

valuearb wrote: post #8
arcanus wrote: post #2

I can't help but think of Peter Thiel's very appropriate comments (admittedly targeting GOOG, but still applies) here: https://www.youtube.com/watch?v=2Q26XIKtwXQ As I read it: if AAPL had any idea at all what to do with this cash, they would deploy it. They are completely out of innovative ideas, and are just turning the product crank. Instead, they should return $$ to investors in the form of a dividend.

They have, which is why they only have $160B in net cash. They will do more when allowed to repatriate it at a reasonable tax rate.

Yeah, how can you do anything just that little amount? /s

The could give their shareholders billions and still have plenty left over to do anything.

Re: Apple has a record $250B in the bank

#20

Post by valuearb »

arisAlexis wrote: post #16
valuearb wrote: post #9

Earlier quoted context omitted.

Massive US tax penalties for doing either.

How about investing

They invest internationally. To invest in the US effectively requires surrendering 40% of that money to CA and the federal government first.
Post reply on HN