Apple Issues Statement About Returning Cash to Shareholders

[anthony11]

"Reiterating"? Seriously?

What is it with financial types and their passion for abusing this verb?

[CIA]

Originally Posted by TallManNY

First of all, spending $40 billion, the high end of your estimate, is unlikely to even use up each year's free cash flow. They made 23 billion dollars last quarter. The smartphone and tablet markets continue to grow. Apple will have a better Christmas quarter this year.

Second, when a company goes private it gets owned by someone. Who in the world would have the necessary hundreds of billions of dollars to buy Apple? It would probably take at least $600 billion to take Apple public (the current Market Cap is NOT the price that a company will go private at because that price does not include the control premium) and "only" $137 billion could be funded from Apple's cash pile.

As mentioned in my original comment, taking a company the size of Apple private could not happen overnight. I'm talking about over the course of 7-10 years (or more). For what it's worth, a private company can still be owned by a group, not a single person. Put the right people in that group and Apple can still shine. It's all hyperbola anyway, but an interesting concept to toss around.

There are some pretty damn big private companies out there..

[akadmon]

Originally Posted by lazard

the board of directors could care less about the customers. Their only concern is their shareholders.

As it should be.

The "loyal customers" get to enjoy the superior (arguably) Apple products. Us shareholders (most of whom are also "loyal customers") are entitled to share the spoils of Apple's success, especially when Apple doesn't seems to have any idea what to do with the cash it is sitting on (i.e, something new and exciting that would gain mindshare and increase the price of AAPL stock).

I stand with Einhorn.

[mrsir2009]

First time the stocks gone up in a while

[maxosx]

This isn't your Fathers Apple anymore

[kalsta]

Originally Posted by lazard

the board of directors could[n't] care less about the customers. Their only concern is their shareholders.

Originally Posted by akadmon

As it should be.

And with that attitude, Apple will slowly lose its customers. How much will your shares be worth then?

[Squeak825]

Originally Posted by IJ Reilly

All it means is that the company is generating more free cash than God, way more money than they any company could use for growth. They can easily fund any idea you or anyone else can imagine.

Microsoft did issue a large, one-time dividend. It didn't help the stock price longterm because earnings are not growing much longterm. But it did shove a lot of dollars into the pockets of investors, which is sort of a nice thing, if you are an investor.

----------



Sort of. Stockholders do own the equity in the company, but the stock markets do not price in cash assets (or any others, really) since stockholders don't see any of that cash unless the board declares a dividend. Or if a stockholder buys the entire company. Only in those two ways do stockholders care about cash.

If that $140B in Cash disappeared tomorrow (as in gone instantly, not given to shareholders), you would see a significant hair cut in the price of the stock.

Of course the cash assets are baked into the price (maybe not 1:1, but it still there). Why else do do you think a stock drop in price almost identical to the amount of a dividend when it trades ex-dividend?

[apple-win]

Originally Posted by Squeak825

If that $140B in Cash disappeared tomorrow (as in gone instantly, not given to shareholders), you would see a significant hair cut in the price of the stock.

Of course the cash assets are baked into the price (maybe not 1:1, but it still there). Why else do do you think a stock drop in price almost identical to the amount of a dividend when it trades ex-dividend?

Apple does not have $140B in cash. It has $10.7B cash and cash equivalents.

http://finance.yahoo.com/q/bs?s=AAPL...e+Sheet&annual

Apple holds $92B long term investments.

http://www.zerohedge.com/news/2013-0...ge-funds-shame

[Badandy]

Originally Posted by 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.

I always wait for you to post because it's hilarious how ridiculous your comments are. Get it through your brain: Apple wasn't using the cash they had. Period. As a shareholder, I'd rather get that money back in my pocket for other investing rather than earning a percent on cash reserves. That's what people don't seem to get. If they were using most of their cash to generate their growth then it wouldn't make sense to distribute the money to shareholders who probably couldn't make a higher return than Apple. But that's not the case.

[CIA]

Originally Posted by Badandy

I always wait for you to post because it's hilarious how ridiculous your comments are. Get it through your brain: Apple wasn't using the cash they had. Period. As a shareholder, I'd rather get that money back in my pocket for other investing rather than earning a percent on cash reserves. That's what people don't seem to get. If they were using most of their cash to generate their growth then it wouldn't make sense to distribute the money to shareholders who probably couldn't make a higher return than Apple. But that's not the case.

I present the post directly above yours:

Originally Posted by apple-win

Apple does not have $140B in cash. It has $10.7B cash and cash equivalents.

http://finance.yahoo.com/q/bs?s=AAPL...e+Sheet&annual

Apple holds $92B long term investments.

http://www.zerohedge.com/news/2013-0...ge-funds-shame

Seems like 72 billion in long term investments is making money.

[TallManNY]

Originally Posted by mcfrazieriv

People in this forum really have an issue with belittling others. My comment about applying 20 billion to R&D is an exaggeration (obviously) and comes from my opinion that iOS/OS X has become stale.

CAN I GO TO YOUR STORE AND ORDER $20 BILLION IN BELITTLEMENT, PLEASE?

Okay. Sorry if I came off as harsh.

A new skin for iOS/OS X is basically just a group of ideas, it wouldn't cost much since it is mainly a design thing. Programing the guts, which is based off on Unix, right, would be a huge endeavor and while it is probably going on right now in some way shape or form, is also just going to be the work of a few hundred coders, right? When talking about billions coming in per month, even reprograming the operating systems probably doesn't cost much.

So really I don't see the cash release really crimping any of Apple's plans.

[apple-win]

http://finance.yahoo.com/q/bs?s=XOM+...e+Sheet&annual

http://finance.yahoo.com/q/bs?s=AAPL...e+Sheet&annual

Who has more cash? Who has more assets?

[TallManNY]

Originally Posted by CIA

As mentioned in my original comment, taking a company the size of Apple private could not happen overnight. I'm talking about over the course of 7-10 years (or more). For what it's worth, a private company can still be owned by a group, not a single person. Put the right people in that group and Apple can still shine. It's all hyperbola anyway, but an interesting concept to toss around.

There are some pretty damn big private companies out there..

I know it can be group, but really isn't Apple too big now for any group to basically do a takeover of it?

I'm not really sure how you take a company private over a long term unless it is the board and the executives that are implementing that plan. And none of those folks have that kind of money. If it is an outsider who doesn't own much of Apple, how do they get Apple to do your long term plan?

Good point though that there are some huge private companies. But I think they grew to those huge sizes. I don't know if anyone takes a company this size public. It just seems like there would be too many shareholders to buy out.

[apple-win]

Originally Posted by CIA

I present the post directly above yours:




Seems like 72 billion in long term investments is making money.

Why would a share holder like to have Apple to reinvest the profits for him/her? Is Apple a mutual fund company?

How about get the profits back from Apple and buy Exxon Mobil?

[TallManNY]

Originally Posted by CIA

I present the post directly above yours:




Seems like 72 billion in long term investments is making money.

I don't think they make much. They disclose the returns on those investments. As I read it they made about about a billion dollars last year on their investments. Not a very impressive return for this amount of money.

The investments are in highly rated corporate bonds, US treasuries, other US agencies, and some foreign government bonds. All those high rated securities are giving terrible returns these days.

[CIA]

Originally Posted by apple-win

Why would a share holder like to have Apple to reinvest the profits for him/her? Is Apple a mutual fund company?

How about get the profits back from Apple and buy Exxon Mobil?

Apple didn't give a dividend for years, decades.... The last 10 years has shown great growth, and they still didn't give one out. Now suddenly they trickle out some money, and all these broke relatives show up demanding more. If you don't like your investment in AAPL, move your money elsewhere. I look at AAPL long, and if the tech world has shown us anything, is long in the tech world means lots and lots of HUGE shifts in the computing world. So yea, I'd like Apple to have the money in the bank, so they stick around long regardless of the economy. I enjoy the products. Not my fault you bought at $690. If it makes you feel better I sold at $360. Still made money, so I'm happy tho.

[TallManNY]

If you go to their 10-K you can see the results of their investments. They really aren't impressive even when you factor in their conservative nature. Apple is getting soundly trounced by inflation on these long-term investments.

[AbyssImpact]

Originally Posted by mrsir2009

First time the stocks gone up in a while

Don't look now, but Apple will be back at $700 real soon.

[IJ Reilly]

Originally Posted by Squeak825

If that $140B in Cash disappeared tomorrow (as in gone instantly, not given to shareholders), you would see a significant hair cut in the price of the stock.

Of course the cash assets are baked into the price (maybe not 1:1, but it still there). Why else do do you think a stock drop in price almost identical to the amount of a dividend when it trades ex-dividend?

You'd see a significant haircut in the stock price if the cash disappeared because for that to happen Apple would have to not only become unprofitable but massively unprofitable.

Cash assets are not baked into the stock price, they simply are not a factor in stock valuation. Neither is debt, except to the extent that they have an impact on earnings. Dividends do however get factored in as they constitute real, tangible returns to investors. Stocks drop ex-dividend (all other things being equal) because buyers of the stock during the ex-dividend period do not get the dividend payout.

How so many people get the dividend proposition exactly backwards will always be a mystery to me.

[apple-win]

Originally Posted by TallManNY

I don't think they make much. They disclose the returns on those investments. As I read it they made about about a billion dollars last year on their investments. Not a very impressive return for this amount of money.

The investments are in highly rated corporate bonds, US treasuries, other US agencies, and some foreign government bonds. All those high rated securities are giving terrible returns these days.

If interest rate goes up, bondholders will lose money.

Right now interest rate is zero, it cannot go down but go up in the future

[IJ Reilly]

Originally Posted by TallManNY

If you go to their 10-K you can see the results of their investments. They really aren't impressive even when you factor in their conservative nature. Apple is getting soundly trounced by inflation on these long-term investments.

Exactly. Some people seem to think that Apple's business is banking and investments, or maybe that they are saving for their retirement. The really huge irony here is that Apple currently pays out about $10b a year in dividends. They added $25b in free cash in just the last quarter. At this rate the cash mountain will grow to over $200b by the end of the fiscal year. I've been arguing about what should be done with this money with the dividend-phobic since Apple stashed away their first $25b. Maybe when the total gets to a half trillion they will get it, but I wouldn't hold my breath.

[Evangelion]

Originally Posted by IJ Reilly

Misleading. First, the capital market can't function or even exist without a stock market for trading the stock. It is all one system. No stock market, no IPO. Second, the stockholders own the equity in the company. This is is why it is called an equity market. So while technically giving the money "back" to the stockholders is a bit of a misnomer, it is the stockholders who have invested their money in the company so they are first in line to get cash payouts, otherwise known as dividends.

Originally Posted by jpasca

What happens the original shareholder owned X shares of aapl. A part OWNER of the company. That is what you are. That VALUE you own goes up and down depending on the share price and the dividend. The share price is only what you bought it for and what you can sell it for. It's true the company no longer gets money from the sale of it's stock after it raised the initial capital and subsequent share offerings. However APPLE is you TOO if you own the stock. So the point of wanting apple to give money to shareholders- it is to distribute more of the profits to the part owners (shareholders) of apple.

I know all that. My beef is with using the term "giving money BACK to the shareholders". The money in question did not come from the shareholders, but from people who bought their products. So call it what it is: giving money to the shareholders. "Giving the money back" means that they received money, and now they are giving that money back where they got it from. And that would mean giving it back to the people who bought their products since they are the ones who gave them money.

No, I'm not advocating that they do that. If they want to give that money to someone, it should go to the shareholders. But that is not "giving money back to shareholders", its just giving them money.

[mrsir2009]

Originally Posted by AbyssImpact

Don't look now, but Apple will be back at $700 real soon.

...After dishing out all their dissapointing (record breaking) profits to the shareholders.

[Newton70]

Originally Posted by you people smh

*that they just let sit in the bank


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

Correct me if I'm wrong, but I believe you are talking about gross revenue whereas the discussion at hand is about net profit.

[griz]

Here's to the crazy ones....with a mountain of cash. Do something crazy.