Apple Issues Statement About Returning Cash to Shareholders

[wovel]

Originally Posted by Squilly

I didn't see that coming....
On another note...
"We find ourselves in the fortunate position of continuing to generate large amounts of cash, including $23 billion in cash flow from operations in the last quarter alone. "
That's a lot of $$$$.

What they said there was: "Damn, he's right, we are making so much damn money we don't know what to do with it. We were confused by the rumors of our impending doom."

[you people smh]

Originally Posted by Peace

Their initial investment is their money. Along with any profit or loss from their investment.

If they want "their money" back sell the stock.

Their money is only a portion of the money Apple has.

So what exactly does "ownership" mean to you, as it apparently doesn't mean "owning" anything?

[Ryth]

Originally Posted by voyagerd

Trying to decide if I should buy some more AAPL.

That time was before they announced it.

[Squeak825]

Originally Posted by Peace

Their initial investment is their money. Along with any profit or loss from their investment.

If they want "their money" back sell the stock.

Their money is only a portion of the money Apple has.

No, when you buy a share of stock you are buying a portion of the right to the assets, which includes cash.

The stock is very much priced to include the amount of cash in hand.

Right now the $468 per share price can be split between $145 for the right to the cash on hand, and $323 for the right to future earnings.

[MacSawdust]

The day after they distribute the cash, people forget about it and Apple has less cash. Nobody wins.

Just buy Sharp instead.

[Bonte]

Originally Posted by you people smh

Non-voting
Guaranteed Dividends
Paid before any common stockholders
Owed regardless of company's ability to pay (accumulating)

Yes, but what is it to me as a holder of regular stock? Its hard to see the benefit in preferred stock with 1 billion regular stock on the market and Apple that doesn't need the extra cash.

A stock split 10:1 and joining the Dow Jones index would help the stock a lot more, now it seems that the stock is settling on a price based on the dividend at 2,5 %. Its almost as if Apple want's to keep the stock price low.

[xVeinx]

So, Einhorn is basically suggesting that Apple give him $32 million (based on the number of shares and his $32 per share estimate). Apple has a ton of cash. Giving it all to people like Einhorn to either pocket or cover the loses for his poor management ( ) of his funds doesn't seem like it's in Apple's best interest. Then again, what do I know (don't answer that )?

[Squeak825]

Originally Posted by Bonte

Yes, but what is it to me as a holder of regular stock? Its hard to see the benefit in preferred stock with 1 billion regular stock on the market and Apple that doesn't need the extra cash.

A stock split 10:1 and joining the Dow Jones index would help the stock a lot more, now it seems that the stock is settling on a price based on the dividend at 2,5 %. Its almost as if Apple want's to keep the stock price low.

Stock split or joining the DJIA would do absolutely NOTHING when it relates to the stock price.

[SPUY767]

Originally Posted by OasisNYK

Personally I don't see this as such a good thing. I know Wall Street generally likes it, but this is basically Apple admitting that they cannot get a better return investing that money in the business so they are giving it to the shareholders instead. My concern is they have either run out of ideas to use the money, the future tech is far too expensive to invest in, or some other unflattering reason that is masked by the news of a large dividend.

I wonder what their hurdle rate is. Didn't Microsoft do a one time dividend to give back some of their cash hoard at some point? I don't think it generally helps a stock long term but I could be wrong.

You simply can't compare this to anything else on the street. No one has ever run a balance sheet like Apple.

[CIA]

They should just continue to buy back stock. The low stock price can only enhance that. As much as I love the public nature of companies that are, well, publicly traded on the open market, it would probably help Apple to go private. This isn't something that happens overnight with a company this large, but spending 25-40 billion a year on stock buy backs will only increase stock value overall, and eventually help them become private. Private companies have a lot more leeway in how they run their businesses. Also we all know how much Apple wants to be "secretive", going private will help that cause.

[neuropsychguy]

Originally Posted by iMikeT

I just hope guys like this don't Bain Apple.

"Bain Apple"? You mean take a struggling company and help turn it around? That certainly doesn't apply here.

[hundleton1]

Aren't Apple giving back to shareholders more than Dell it paying to go private lol.

[paul4339]

Originally Posted by Bonte

What is up with the preferred stock and why is this good or bad?

Basically preferred shares get paid first at a specified dividend, before other shares, but they can't vote.

So for example you may see AAPL A shares, and AAPL B shares, with Apple maybe pays $10/share dividend and trades at $450. Apple B shares is 'guaranteed' to pay say $20/share and trades at a different price.

The result is A shares have volatile growth, and usually lower dividend; and B shares have set dividend and stable stock price.

Institutional investors, such as pensions (and people that want stable income) often like preferred because it adds a base, predictable ROI, and provides them with some potential growth.

Some people want the volatility because they want to cash in on the growth aspect of the company (non-preferred are better suited for this).

> what is it bad?

Because it 'guarantee' to the preferred shareholders is at cost of non-preferred shareholders and even at the cost of future opportunities. So if Apple, one day has flat earnings (for whatever reason) and needs money - they must still honor the preferred shares even if it means cancelling or altering strategic plans.


What Einhorn suggests makes sense, because he and others probably believes that Apple can sustain a consistent higher return, without need to borrow, for the long term. But more importantly his proposal is to vote against the blocking of preferred shares... he wants all options opened and considered (ie, don't rule it out)

On the otherhand, it could just be a ploy to get short term gains (because Einhorn has been incredibly successful by hedging).

.

[AlterZgo]

I thought a huge problem with paying dividends is due to the fact that a substantial portion of Apple's cash profits is held overseas and Apple has not been able to repatriate the funds back to the U.S. without substantial tax consequences.

So, while Apple may be sitting on a pile of cash, they really can't pay a majority of it to shareholders in dividends unless they are willing to take a huge corporate tax hit on the cash first.

[BRLawyer]

Too bad Apple got so defensive after SJ's passing. If he were still alive, his standard answer to Einhorn and his vulture clan would be: ******* OFF.

But now that spineless Cook has decided to issue dividends even though Apple is and has always been a growth stock, the toothpaste is out of the tube and won't come back.

Alas, a terrible decision that sets terrible precedents.

[you people smh]

Originally Posted by CIA

They should just continue to buy back stock. The low stock price can only enhance that. As much as I love the public nature of companies that are, well, publicly traded on the open market, it would probably help Apple to go private. This isn't something that happens overnight with a company this large, but spending 25-40 billion a year on stock buy backs will only increase stock value overall, and eventually help them become private. Private companies have a lot more leeway in how they run their businesses. Also we all know how much Apple wants to be "secretive", going private will help that cause.

Nobody but nobody has that kind of money.

[saturn88]

Originally Posted by Bonte

I'm european so the dividend is taxed twice, i lose a total of 35% on tax. I hate that, a stock buyback would be better or just invest in a new daughter company to build a self sustained tech-city or something, its a crime not to do something bold with that kind of cash.

Well, thats why you have cheap healthcare and education

[Ryth]

Originally Posted by SPUY767

You simply can't compare this to anything else on the street. No one has ever run a balance sheet like Apple.

Exactly...no one has ever had this much $$$ coming in.

[you people smh]

Originally Posted by Ryth

Exactly...no one has ever had this much $$$ coming in.*

*that they just let sit in the bank


There were 17 companies last year alone that had more $$$ coming in

[gnasher729]

Originally Posted by Yvan256

Anything that can shield Apple from the crazy mood of the stock market is a good thing. Their value keeps going up and down because of a few insane people who keep writing stupid rumors and predicting out-of-this-world profits based on wishful thinking.

What makes you think Apple is in any way influenced by the share price? It doesn't actually matter one bit except to people buying shares.

[pgwalsh]

chunk of Microsoft.

[SteveW928]

THIS is why a company shouldn't want to be in the public stock market.

If Apple doesn't get better at controlling the idiots, it will eventually be their undoing.

[Fatalbert]

Looks like I bought at the right time. Dividends?

----------

Originally Posted by pgwalsh

chunk of Microsoft.

It would be foolish to buy stock in a company that just released a tablet with a 30GB OS and a horrible battery life.

[Dave.UK]

Originally Posted by ogee

How about giving the staff, including retail, a bonus. We never get bonuses, and in my store all we were got for christmas was a small bag of peanuts!

Whats that saying about monkeys and peanuts......

[TallManNY]

Originally Posted by mcfrazieriv

How about invest 20 billion more into research and development

How? Do you suggest they go to the R&D store and say, "I'd like to order $20 billion in research please."

Assuming an engineer or software developer costs about $250,000 in salary and $250,000 in yearly supplies, office space, equipment (pretty large assumption) that would require hiring 40,000 new R&D folks. Setting aside Apple's retail stores, that would more than double the current number of Apple employees. Where would you find all these engineers and software developers.