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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

#171

Post by droz »

uptown wrote: post #23
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…

"Why not invest in space exploration , electric cars, self-driving cars, medical devices, green energy" Why should they? Just throwing money at something doesn't guarantee success, and deviating from a company's core competencies can become a distraction that drags down the parts of a company that are succeeding. The dividend puts money back into the hands of investors that can choose to either re-invest back into Ap…

Used to be that all Ball made was jars. Now they are sending successful probes out into space and helping the advancement of science.

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

#172

Post by furyofantares »

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…

> but "phones" have not been the business of "Apple Computer" as well.

I don't think of the iPhone as a phone at all. It's a computer I always have with me.

Now, the main reason I always have it with me is because, rather than being an additional thing I need to carry in my pocket and always remember, it replaced a thing I need to carry in my pocket and always remember, but the "Phone" feature is the least used feature of my iPhone by far.

This is how Apple approached the iPhone, too. It was initially thought of as an iPod that had the sweet feature that it could replace your phone rather than require you to carry an extra device.

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

#173

Post by marbletiles »

ceejayoz wrote: post #161
marbletiles wrote: post #63

Earlier quoted context omitted.

"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." They can't use the shareholders' money (which is what this is) to take themselves private. You can't buy something from someone with their own money. EDIT: Any of these downvoters care to explain themselves? Apple can't buy back most/all of the public shares using this pile of c…

A public offering is the company saying "here is ownership in exchange for your money". A share buyback is the company saying "here is money in exchange for your ownership." You're getting downvoted because it doesn't make sense for a company to be able to move in one direction, but not the other.

Right, they can buyback, but no matter how far they go in that direction they won't end up as a private company.

The shares they purchase don't transfer the ownership they imbue to the board of the company -- they are either retired, held as treasury stock or given to other shareholders. The majority shareholders remain majority shareholders of a smaller amount of stock.

To think of it in a very simplified way, if the company bought back all the shares except 10 from some staunch holdout, that guy would own 100% of the shares of Apple, (and each share would have a stratospheric price).

For the board/management to take control of Apple from the shareholders (which is what people mean when they talk about going private, really), they have to personally acquire more shares.

They obviously can't do this with the company's money, because shares bought with that transfer to the company and either dissolve or are transferred. They have to use outside finance to do it.

This is what I mean about you can't buy the company from the shareholders with their own money.

(They could in the simplified world use the money to buy back the stock and grant it all to board members, but in this world there is a tonne of legislation preventing this, and if they did it to take control out of the hands of shareholders they'd be open to action.)

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

#174

Post by zukhan »

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…

Relevant bit from pg's keynote:

"I was talking recently to someone who knew Apple well, and I asked him if the people now running the company would be able to keep creating new things the way Apple had under Steve Jobs. His answer was simply "no." I already feared that would be the answer. I asked more to see how he'd qualify it. But he didn't qualify it at all. No, there will be no more great new stuff beyond whatever's currently in the pipeline."

Looks like they probably won't be dreaming up innovative devices anyway unless a new Steve Jobs takes over.

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

#176

Post by _delirium »

maaku wrote: post #166
_delirium wrote: post #59

Earlier quoted context omitted.

That's true, but the shareholders have delegated the decision on how to spend the money to their legal representatives on the board. There's a strong presumption that the shareholders have elected board members whose decisions they support, so if the board makes decisions and the shareholders don't vote them out, those are presumed to express the preferences of the shareholders. Note that those decisions do not have…

Board members and executives have a fiduciary duty. Executives and board members who knowingly and willfully undertake actions that decrease the value of the company can be held personally (financially) responsible for those actions. (That's why you purchase director's and officer's liability insurance.)

They have an extremely vague "duty of care", i.e. to run the company in a manner in accordance with the wishes of the entities they serve as representatives of. Beyond that, they don't have any specific obligation; shareholders can, at least in principle, have many different wishes, and so elected board members can represent a variety of positions, from an aggressive profits-uber-alles position to some kind of safeguard-the-brand-reputation-for-generations viewpoint.

The main enforceable obligation is a negative one, to not actively do things that benefit themselves at the expense of the corporation they oversee, e.g. by making decisions primarily designed to enrich themselves personally. Almost anything that isn't active wrongdoing is defensible though; if a board member thinks in good faith that doing X would enhance the goodwill towards the Apple brand, and in good faith thought that prioritizing brand goodwill was the best long-term strategy, it would be fine to undertake a short/medium-term money-losing course of action to pursue the strategy. Courts generally defer to board elections to resolve those kinds of disputes over strategy, since courts are very bad at predicting whether a given strategy is actually in a particular entity's long-term interests.

Insurance these days is more often directed at government regulations than shareholder lawsuits; board members have various possibilities for personal liability if their company is doing illegal things on their watch.

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

#178

Post by velus »

And this for people who don't understand how stock buyback "works"

The stock purchased is "canceled". Yes, canceled.

So if a company has no operation but 100 billion in cash, after a stock buyback of 100 billion, the company is worth $0. It's a super bad deal for the employees who sees nothing, but great for Wall Street traders

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

#179

Post by ceejayoz »

ajross wrote: post #117
ceejayoz wrote: post #109

Earlier quoted context omitted.

> 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…

> 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.

http://www.codinghorror.com/.a/6a0120a85dcdae970b0163030a719...

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

#180

Post by nandemo »

beambot wrote: post #126
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 disagree with your assessment of dividends vs. share buybacks. My opinion mirrors that of Mark Cuban. A few choice quotes from [1]: Dividends offer _true_ returns: They send a message to shareholders that you want them to stay as shareholders and are rewarding them for their committment to your company. Its a reminder to shareholders that the business investments you have made have actually worked and the reward is…

The quote describes stock grants and stock options for managers (and employees). That's orthogonal to the question of dividends vs buybacks.

An individual investor might prefer dividends for tax reasons, while a mutual fund might prefer buybacks. But other things being equal, both sorts of investors don't want unnecessary dilution.

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