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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

#151

Post by brudgers »

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."

In Apple's case, what it signals may be a little worse - i.e. that they have given up on trying to find those better ways despite having had several years to work on it as the cash accumulated.

If Apple had announced dividends a year ago, before Jobs' death, it would look like Apple had a long term vision - and there was certainly opportunity to have provided dividends.

More importantly, there was opportunity to spend the money. If Apple couldn't figure out how to make a dent in $30 billion or $50 billion or $70 billion, it doesn't look like their problem has gotten any easier.

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

#153

Post by ef4 »

veyron wrote: post #85
nikcub wrote: post #40

Earlier quoted context omitted.

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…

They were pressured by wall street to actually do something with the money. I for one would have liked to see apple carry the cash balance. Sure they aren't making much from the cash, but I'm pretty sure there are better uses of the money. For example, why not buy a few suppliers?

> For example, why not buy a few suppliers?

Antitrust regs.

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

#154

Post by Cushman »

kytmizuno wrote: post #148
Cushman wrote: post #130

Earlier quoted context omitted.

It's the first one that excites me. Apple could completely upend the wireless market by selling data service at cost as a loss-leader for their devices-- or even building lifetime unlimited data into the price of every Apple device. Compared to the cost of building the network, what's $100 million on lobbying to nab some free spectrum? Alas, I think the current arrangement is working too well for Apple to want to tak…

I think spectrum is quite a bit more expensive than that. Qualcomm recently sold a spectrum block to ATT for nearly $2 billion. Granted it was probably a more desirable block (lower 700 Mhz) than most others.

Yeah, that's a good point. But even a billion dollars wouldn't put it out of their price range. I'd also imagine they could drum up serious public support by offering to give everyone free cell service, and maybe squeak out a legislative discount.

But I guess it's all a pipe dream anyway.

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

#155

Post by ma2rten »

ajross wrote: post #104
ceejayoz wrote: post #98

Earlier quoted context omitted.

Pixar wasn't a "money-printing-quality hit" because other studios make a lot of money on some movies too? Titanic's studios have had plenty of flops and shitty movies to offset their successes. Pixar has had a string of commercial and critical successes.

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.

You can't really compare iPhone and Pixar that way. IPhone was a product by an established company that was already producing the iPod. Pixar on the other hand was a startup (sort of), which Steve Jobs invested $10 million in and sold for $7.4 billion, quite an impressive return on investment.

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

#156

Post by raldi »

SoftwareMaven wrote: post #131
ChuckMcM wrote: post #125

Earlier quoted context omitted.

But you only have to have 50.1% of the shares to force the other 49.9% to let you go private :-)

Serious question: wouldn't the SEC say "no way" if that 49.9% constituted more than 500 (at least, I believe that's the number) people?

No, they'd just require the private company to disclose the same sort of quarterly information that a public company does.

You're clearly alluding to Facebook being "forced" to go public, but they too could remain private with 501 investors. But once they're revealing their numbers, they figured they might as well jump in with both feet and do the IPO.

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

#157

Post by csomar »

nikcub wrote: post #16
csomar wrote: post #10

Earlier quoted context omitted.

It's actually trading +1.67% (pre-market).

which is up on Fridays close but down a few points on the highs reached in after-market over the weekend (~609). get a better sense a bit after the markets open and then at the end of the day today. this news should be a disappointment, but nothing about the hysteria around AAPL surprises anymore.

The day ended. Apple closed on +2.6% over $600 for the first time.

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

#158

Post by aero142 »

philwelch wrote: post #95
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…

Without either dividends or a stock buyback plan, stocks are no more an investment than baseball cards. The point of not paying dividends is so you can reinvest your cash to increase the dividends you can pay later, and Apple's dividend is so low that they're clearly planning to reinvest the vast majority of their cash even with these dividends. I don't get the criticism that Apple has no better way to spend its mone…

When I collect all of the Tops '88 baseball cards, I don't suddenly own the NY Yankees. Stocks have fundamental value beyond novelty.

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

#159

Post by stevewilhelm »

padobson wrote: post #113
andylei wrote: post #64

Earlier quoted context omitted.

> 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 = $559.0…

You omitted the premium shareholders would want from Apple to agree to sell their shares back to the company.

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

#160

Post by stevewilhelm »

SoftwareMaven wrote: post #131
ChuckMcM wrote: post #125

Earlier quoted context omitted.

But you only have to have 50.1% of the shares to force the other 49.9% to let you go private :-)

Serious question: wouldn't the SEC say "no way" if that 49.9% constituted more than 500 (at least, I believe that's the number) people?

Typically when a company goes private, it buys back the shares from the current shareholders. The number of shareholders would then drop back under 500.
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