I'm pretty confident that this won't have any ill-effects; I trust that they know what they are doing. Plus it isn't like they haven't the money to afford these programmes.
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Apple Announces Plans to Initiate Dividend and Share Repurchase Program
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....and aftermarket trading tanks. I can never quite understand the logic of the stock market
Anytime you make plans to spend so much money - of course the stock will tank.
This is a worrying move as its so soon after Steve passed away and it goes completely against what he has been saying for the last few years. Lets just hope Apple keep that same culture of producing great products and are just becoming a more corporate friendly company.
I expect the stock to rocket over the next week as dividend funds buy the stock and people just rush to it now it is paying dividends. Tiny dividend though.
I expect the stock to rocket over the next week as dividend funds buy the stock and people just rush to it now it is paying dividends. Tiny dividend though.
It's sort of amusing to see the responses and compare them to letdown of not getting unrealistic product updates. "New iMacs don't have 512GB SSDs standard and touch screens - lame": becomes "Apple doesn't use cash pile to buy T-Mobile or donate it all to charity - lame"
....and aftermarket trading tanks. I can never quite understand the logic of the stock market
Edit* It's back up now anyway.
Yep, 1.5% and climbing.
Sigh...a monorail would have been cooler.
I was hoping for a full-blown Apple-World amusement park.
Just to show how small the dividend is, you'd need to own over 50 shares just to be able to buy an additional share annually, if you reinvest the dividends.
Steve always said they should have enough cash on hand to do whatever they want.
Today's announcement shows that Apple is committed to keeping enough cash on hand to do whatever they want.
What's the problem?
"Want to maintain flexibility to take advantage of investment opportunities
- Current income for our longterm shareholders
- Increase attractiveness to a broader investment base"
Don't like this at all.
- Current income for our longterm shareholders
- Increase attractiveness to a broader investment base"
Don't like this at all.
Then they could be buy a NHL team and name them The Bondi Blues with an iMac G3 mouse as logo! (Disney did that with the, then, Mighty Ducks of Anaheim).
Perhaps this was always the plan, its just odd that after years of hoarding the cash they finally give out a dividend but its very minimal so very little benefit to the shareholders in terms of actual income and may just help the price go up further.
The $2.65 is a quarterly dividend, so you'd get that much per share every 3 months.
They paying $10.60 annually per share.
My favorite part of this announcement was:
"annual dividend payments to be over 10 million dollars [stream silence...]
...
......
...
[stream dies again]"
Great broadcast.
"annual dividend payments to be over 10 million dollars [stream silence...]
...
......
...
[stream dies again]"
Great broadcast.
Sigh...a monorail would have been cooler.
Right, a missed opportunity for Tim to pull out 'one last thing', that's for sure.
It isn't really a "non-Steve" move in that most likely the $100B that "Steve" put in the cash horde will still be there after they execute $45B over 3 years. The stock buy-back is offset by the dilution Apple employees are going to put into the flow over next 3 years and the dividend is a small fraction of the expected free cash flow. Apple was on track to put at at leas another $30B into the cash hoard this year. So $45B over next 3 years isn't a whole lot to change the "hold $100B in cash" position.
Apple will still be sitting on top of more money than its other corporate policies demand ( a limited number of small company acquisitions, only staying in high margin businesses , etc. ).
This isn't like Microsoft in the 90's. Microsoft started "swing for the fences" moves ( XBox , Internet-ads company , etc. ) that were all giant money sinks funded by Windows/Office profits. So far Apple hasn't really funded any giant money sink. Even their "hobby" products ( AppleTV, TimeCapsule , etc. ) at least break even. That may change (Apple intros a stinker.) but I wouldn't bet on it. They will let growth pull back before shooting themselves in the head in part because have the $100B to play with.
Someone with $10,000 worth of AAPL shares would have quarterly income of $45. Not great is it. Just don't see the point if they're trying to give long term investors income! Will just make the price go up higher but no real gains from that.
I wasn't stating that they would come out and state these acquisitions in this call just that a more generic acquisition talk that would end up resulting in these two moves.
I still think Vimeo and Steam/Valve make the most sense. Apple is already using Vimeo in ads and demos since Google owns Youtube and it has the matching cache of Apple compared to the chaotic and less polished Youtube. Steam/Valve allow them a huge entry into gaming along with a great ecosystem already similar to theirs.
They will happen. (or something very similar)