Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Hmmmm.

Hastily Called Weekend press conference??!?!!?!?!?!?!?!?!?
Why not wait until the shareholders conference call.
Buying back stock at an all time HIGH!!!!!???!?!?!?!?!?!?!
Doesn't make sense unless they had to.

In short sales are SOFT. Its the only reason Sales were way off expectations.

Buying back stock is how they will pay executives while the shareholders Nuked.

The tech area reminds me of March 2000

The market is full of HFT and little volume or Liquidity. Don't stand under this or you will be crushed when it falls.

DISCLOSURE: NO POSITION

You're missing something besides a position...
 
So what? Anyone who works on a visa overseas has to pay double taxes. It may not be 'fair', but that's the game you play for doing business internationally. If individuals have to do it, so should corporations.

Because what, corporations should pay no local taxes to the U.S. just because China or Germany or Jamaica already got a tax slice? If Congress changed the law, corporations would just move ALL of their revenue overseas and the U.S. corporate tax revenue would plummet (it's already WAY below where it should be). Yes, tax law needs to be drastically reformed, but not so corporations can get a free ride while the average taxpayer gets screwed.

Individuals are actually excluded up to about 95k from income earned overseas.

It's also similar to how my work done in another state is taxed in my home state. It would be unfair if I had to pay two states worth of taxes. If no US recourses were used earning that income - why should the US be entitled to it?

To think that suddenly corporations would move all operations overseas would be ludicrous. How do you suppose that would happen? Corporations still have to sell services in the US.
 
I'd rather see them do something BIG (start their own cellular service, for one) than just shrug their shoulders and return the money because they can't think of anything better to do with it. There's a lot they could do with the money they have, and dividends is the worst option.

You seem to contradict yourself. You say they can't think of anything better to do with the money, but they should do it anyway. So are you saying they should invest in worse things to do with the money?
Or are you saying they should invest in things they can't think of? The first seems to be a bad idea on the face of it, they second just weird.
 
I would think that Apple would expect a good % of the dividends payed to come right back to them with the purchase of new Apple products.
Probably not. $10B in dividend disbursements will not result in $10B in disposable income to consumers, nor $10B additional revenue from product sales.

There are 28,500 shareholders of record, of which approximately 1,750 are institutions. In a lot of financial accounts (like mutual funds sitting in a 401k), the dividends are reinvested in the issue, so Joe Investor with shares of Fidelity Contrafund isn't going to get a cash dividend payment; they would get additional shares of FCNTX instead of return of capital.

Of the remaining 26,750 individual investors, probably a couple thousand are Apple employees via ESPP, and they already get a discount on products (plus Apple gives away a lot of freebies to employees).

Thus, we are talking about maybe 25,000 individual investors. Some of their AAPL shares are probably being held in retirement accounts, so even a cash dividend payment isn't disposable income.

Remember about 71% of outstanding shares are being held by institutions so roughly $3B will be paid out to individuals holding direct shares.
 
Last edited:
All I'll do with the dividend is just reinvest it in the company.

That's a fine thing to do. And it's because you now have that individual option that this dividend was such a good thing to do. Investors now have the individual option to buy more Apple stock, invest in Facebook, or buy a yacht, as they see fit.
 
That's a fine thing to do. And it's because you now have that individual option that this dividend was such a good thing to do. Investors now have the individual option to buy more Apple stock, invest in Facebook, or buy a yacht, ...

Or to diversify and rebalance ones investments and savings, which portfolio theory indicates is the proper way to lower outlying risks when one investment greatly outperforms the others. An AAPL shareholder now has a greater choice, depending on their personal risk aversion, wild gambling addiction, or anything in-between.
 
To think that suddenly corporations would move all operations overseas would be ludicrous. How do you suppose that would happen? Corporations still have to sell services in the US.

I'm not a corporate accountant so I won't claim to know a lot about such things, but most corporations have very smart people who can figure out many ways to launder their profits overseas via shell corporations and the like. Hell, GE didn't pay ANY taxes last year.
 
I'm not suggesting they make some huge acquisition -- that usually turns out badly and Apple's culture would be at risk.

Starting a cellular service was off the top of my head, but what I'd really like Apple to do with that $100B instead of dividends is to build manufacturing facilities here in the States in order to bring some jobs back from China. That would help the American economy a lot more than handing out dividend checks. If Apple is making so much money that they have to give it away, they can certainly afford to pay American workers to produce Apple products.

They're not giving it away. They're paying the people who own the company.

Manufacturing in the U.S. just doesn't make sense from a cost perspective by a long shot. Look to Washington DC to try to make it a little more affordable to produce here.

----------

I'm not a corporate accountant so I won't claim to know a lot about such things, but most corporations have very smart people who can figure out many ways to launder their profits overseas via shell corporations and the like. Hell, GE didn't pay ANY taxes last year.

Check their cash flow statements. What you find might surprise you.
 
As a European i pay almost 50% tax on these dividends (US and national taxes combined), i don't need big dividends, this seems on the spot to please both sides.
You're in Belgium, Double Taxation Treaties apply... you should not be paying that much.
 
Jobs would have never allowed this. It's happened before and will happen again.

Steve never had a $100 billion in the bank. If you have faith in Steve, know that he appointed Tim and told him to NOT go down the "What would Steve do" track
 
If you agree with the move or not, I think it's obvious Jobs wouldn't have agreed to this under his watch.
 
More like exhausting. Some investors understand the implications of a company carrying excess cash on the books and others don't. Some have a concept of the size of Apple's cash hoard, and the rate of accumulation, and others don't. That's pretty much the entire difference we are talking about here.

You're starting to scare me.
I'm worried about an impending tinfoil shortage. Seriously.

Who do you think is going to make all your iToys? A commune?
Where are they going to get the financing to do it?

Investors. Oops.

----------



Apple is up $13 this afternoon.
Any other investing insights, Bernie? :D

Absolutely backwards. Sitting on that big pile of unproductive cash was
the antithesis of focusing on great products. Apple was wasting too much effort trying to manage financial instruments in order to maximize the return on their cash pile.

Now they are doing the right thing, by turning back some of the cash to their investors, who can manage their own money themselves. Apple shouldn't be doing it for them.

Someone said it best....

The buyback and dividends are a substantial loss of money for Apple. Losing $45 BILLION over 3 years is NOT a "toe in the water" move.

This leaves Apple only $65 BILLION left, with almost all of it being trapped outside the U.S.

This gives Apple less flexibility in aggressively buying up components to keep its monopsony that crushes its competitors.

Apple's Cash Hoard is a weapon. Steve Jobs would have kept this weapon. Steve noted that companies that give out dividends are at the end of their growth period - this includes companies like Microsoft, whose stock has been flat for the past decade.

Weakening Apple makes me unhappy. What the buyback and dividends do is make it much more difficult for Apple to become a trillion dollar company.

What the buyback and dividends do is to make Apple a much more fragile company, whose market cap depends on the psychological whims of pundits.

This doesn't make me happy as a Apple shareholder
 
Where did you get the ex-dividend date, or is that a guess on your part?

----------



A dividend paying stock tends to rise a bit before ex-dividend and fall a bit afterwards. The ex-dividend effect washes out.

True, since it essentially is a payout and thus incorporates itself into the price and then resumes movement based on expectations.
 
Someone said it best....


You literally have not comprehended anything people have said in response to your posts. Unbelievable. And just so no one can fault me for just calling you out without any substance, here it goes:

The buyback and dividends are a substantial loss of money for Apple. Losing $45 BILLION over 3 years is NOT a "toe in the water" move.

It's not losing $45 billion! It's returning return to the shareholders. That's the point of companies: conferring economic benefit on the owners. Implicit in every company's valuation is a return of cash. Apple is merely giving the owners some cash back that they aren't using.

This leaves Apple only $65 BILLION left, with almost all of it being trapped outside the U.S.

I see we're forgetting the fact that Apple is generating about $10 billion (I could be a little off here) per quarter of free cash flow.

This gives Apple less flexibility in aggressively buying up components to keep its monopsony that crushes its competitors.

Please. Apple with $65 billion (and that assumed NO cash generation, which is ludicrous) is more than enough to do anything they want.

Apple's Cash Hoard is a weapon. Steve Jobs would have kept this weapon. Steve noted that companies that give out dividends are at the end of their growth period - this includes companies like Microsoft, whose stock has been flat for the past decade.

So Microsoft has no growth because it pays a dividend? C'mon. Apple has more than enough money to pay a dividend and grow. It has been growing all this time WITHOUT using that money.

Weakening Apple makes me unhappy. What the buyback and dividends do is make it much more difficult for Apple to become a trillion dollar company.

It's not weakening Apple. Apple has become this strong without using that $100 billion. And what good is a trillion dollar company if $400 billion of it is in cash earning 1%. People need to understand that had Apple been returning money to shareholders, they could not only have invested just as much as they have, but their return on equity would be higher because a quarter of your investment isn't sitting in a cash account.

What the buyback and dividends do is to make Apple a much more fragile company, whose market cap depends on the psychological whims of pundits.

Absolutely ridiculous.
 
Last edited:
If you agree with the move or not, I think it's obvious Jobs wouldn't have agreed to this under his watch.

Under his watch they didn't have $100 billion in the bank, rapidly growing at that. The company is entering a new era. They are not the underdog anymore. They're the biggest, toughest kid on the block. It's hard to justify being the most valuable company in the world and not paying a dividend.

Apple is going to make more than $45billion over the next three years. They will still maintain a massive war chest. Steve Jobs was brilliant, and in his brilliance he chose Tim Cook to run the company. His financial expertise is one of the reasons he made that choice.

Jobs knew these days were coming. Moves like this are necessary to keep Apple on top. A big acquisition or development would've been more exciting, but this was a necessary move.
 
The richest company in the world, yet they don't want to pay taxes. They set up operations in extremely tax lenient countries (Luxembourg and Ireland in Europe), in order to avoid contributing to the society they enjoy the fruits of operating in. It's all rather disgusting. Apple doesn't need a tax holiday.

I take it you feel the same way about U2?
 
The richest company in the world, yet they don't want to pay taxes. They set up operations in extremely tax lenient countries (Luxembourg and Ireland in Europe), in order to avoid contributing to the society they enjoy the fruits of operating in. It's all rather disgusting. Apple doesn't need a tax holiday.
They still pay taxes on all income that is generated within each of those countries, the only difference is that they can move it to another with the EU without being tax again.

Edit: Someone is an idiot that does not understand how it all works eh? must be an American.
 
Last edited:
Am I the only one getting sick and tired of all this "Steve wouldn't have done this" crap.

Face it, Steve is dead, he is no longer in charge of the company. Another person is now holding the reins, he has the right to helm it whichever way he deems fit without having to live in the shadow of his predecessor.

It is okay to discuss the merits or drawbacks of such a move, but please, can we just leave poor Steve out of this. :(
 
Not sure how the US taxes dividends but I believe the dividend is tax free to a US citizen because the dividends come from the after tax profits of the company.

Interest paid by a bank would be taxed. So $1 of dividends is not equal to $1 of interest.

The idea of paying a dividend is a good one. More companies should do it. Although I would rather they let us reinvest the dividend into fractional shares. It is very tough to add to ones position at these prices. Even a stock split would help (for those who don't get what that is - 100shares at $600 becomes 200shares at $300 and the dividend is cut in half as well).

Well the Republican Party wouldn't mind it if dividends were tax free. The double taxation argument is one that Presidential Candidate Mitt Romney makes. But they are not, they are taxed as capital gains, which is currently taxed at 15%. Incidentally, since most income for the wealthy in the U.S. is capital gains, this is why you hear complaints that the wealthy's tax rate is only about 15% overall. If capital gains weren't taxed (based on the double taxation argument), the wealthy would have their tax rate reduced to near zero. Mitt Romney released his tax records for last year and the $40 or so million he made was taxed at a rate just above 15% because it was mainly capital gains (technically, a form of income called Carried Interest").

Also, I believe your broker will sell you a fractional share of a stock. You are right that it will be hard to take dividends of this size and buy $600 shares if they didn't (unless you already have 300 shares or so). I'm pretty sure the brokers don't want to lose a sale and have figured out a way to keep records of fractional shares. And I know that I currently have a fractional share position in Microsoft because I've been reinvesting its dividends.
 
Last edited:
If you agree with the move or not, I think it's obvious Jobs wouldn't have agreed to this under his watch.

I think it's obvious you're fetishizing a dead guy.


Am I the only one getting sick and tired of all this "Steve wouldn't have done this" crap.

Face it, Steve is dead, he is no longer in charge of the company. Another person is now holding the reins, he has the right to helm it whichever way he deems fit without having to live in the shadow of his predecessor.

It is okay to discuss the merits or drawbacks of such a move, but please, can we just leave poor Steve out of this. :(


QFT.
 
Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 5_1 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9B179 Safari/7534.48.3)

Even though apple is doing better than ever something doesn't feel right....
 
Under his watch they didn't have $100 billion in the bank, rapidly growing at that. The company is entering a new era. They are not the underdog anymore. They're the biggest, toughest kid on the block. It's hard to justify being the most valuable company in the world and not paying a dividend.

Apple is going to make more than $45billion over the next three years. They will still maintain a massive war chest. Steve Jobs was brilliant, and in his brilliance he chose Tim Cook to run the company. His financial expertise is one of the reasons he made that choice.

Jobs knew these days were coming. Moves like this are necessary to keep Apple on top. A big acquisition or development would've been more exciting, but this was a necessary move.

It's difficult for any company to justify an unmitigated accumulation of cash, to no obvious purpose. It's dead capital.

As a stockholder, you're always going to prefer a dividend to a big acquisition. Mega-mergers and acquisitions rarely work out. Even the ones that ultimately do are huge distractions for management and drags on earnings for years (take Oracle's purchase of PeopleSoft for example). No stockholder wishes that on the company or themselves. Apple has wisely refrained from such desperate measures. I hope they will remain prudent in their acquisitions and keep them small and complementary to existing businesses.

As for Steve, I think it's pretty clear that if he were still with us, that the dividend would not have happened. By all accounts, he was unalterably opposed to the entire idea. For him, investors were only to be marginally tolerated. I suspect investor relations under Tim Cook will be much better.
 
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.