Apple has a record $250B in the bank
arstechnica.com
Apple has a record $250B in the bank
1–10 of 21 posts
Re: Apple has a record $250B in the bank
#2I 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 $$ to investors in the form of a dividend.
Re: Apple has a record $250B in the bank
#3I can't help but think of Peter Thiel's very appropriate comments (admittedly targeting GOOG, but still applies) here: https://www.youtube.com/watch?v=2Q26XIKtwXQ As I read it: if AAPL had any idea at all what to do with this cash, they would deploy it. They are completely out of innovative ideas, and are just turning the product crank. Instead, they should return $$ to investors in the form of a dividend.
Maybe there is no need for them to buy anything right now?
Re: Apple has a record $250B in the bank
#4Why does Apple need all that cash in the bank? Why not spending it in R&D or giving it to the shareholders?
Re: Apple has a record $250B in the bank
#5I think it's smart to keep cash... we're in economic boom right now with a lot of cheap money around. It will come handy when it's over
Re: Apple has a record $250B in the bank
#6The 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 market.
They want to be shielded in the case of a huge crippling depression or global catastrophe. 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.
At the same time, just like Venture Investors, they are all waiting for the next transistor level market shift to happen - whether they can make it or otherwise. So they are plinking away with small investments on projects that are high risk to try and flush them out.
Pick your poison:
Nuclear
Biotech/Genetics
Artificial Intelligence
Augmented Reality
Space Mining
Etc...
It's really about making sure that APPL will be around in the year 2200 irrespective of everything else.
[1]https://www.stlouisfed.org/publications/regional-economist/j...
Re: Apple has a record $250B in the bank
#7The 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 profits in the nuclear meltdown scenario.
Re: Apple has a record $250B in the bank
#8I 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 $$ to investors in the form of a dividend.
They have, which is why they only have $160B in net cash. They will do more when allowed to repatriate it at a reasonable tax rate.
Re: Apple has a record $250B in the bank
#9Why does Apple need all that cash in the bank? Why not spending it in R&D or giving it to the shareholders?
Massive US tax penalties for doing either.
Re: Apple has a record $250B in the bank
#10I can't help but think of Peter Thiel's very appropriate comments (admittedly targeting GOOG, but still applies) here: https://www.youtube.com/watch?v=2Q26XIKtwXQ As I read it: if AAPL had any idea at all what to do with this cash, they would deploy it. They are completely out of innovative ideas, and are just turning the product crank. Instead, they should return $$ to investors in the form of a dividend.
But if they do that they are admitting they aren't innovative.. Catch-22.