Apple is now Debt Free

[AndrewMT]

Re: Early adopters - "Suckers"

Originally posted by MacRAND
"There's a sucker born every minute" P.T. Barnum
Apparently in excess of 100,000 of them.
Admittedly, the iPod Mini is cute and well designed, just a bit over priced.
Besides, $4.3-Billion in the bank is hardly enough, right Steve?

Come on Steve, stop screwing around with toys, tunes and yellow capped cola bottles.
Give us what we really need, a G5 PowerBook...NOW!

I've been using a pc for a year-and-a-half (since I sold my G4 powerbook) and I am simply waiting for the G5 powerbook to resume using macs. Until then, I could care less about Apple's notebook offerings. As far as I'm concerned, Apple should go back into debt to deliver my G5 powerbook ASAP.

 

[JJTiger1]

Re: Re: Re: Apple out of debt = cash cow

Originally posted by MacRAND

GOOFY™ Computers

{major snippage}

Major funny !!!


=-=
JJ

 

[mclosers]

THE WHY DOESN"T Apple buy microsoft

If they don't need that much money then Apple should just buy Microsoft then... It's not really plausable to buy a company with a higher market cap than your own company has reguardless of loans stock or cash deals.... It just doesn't make sense.... even if Apple had enough cash to buy Disney I don't think they would. There are more important companies to buy that are much smaller like macromedia and adobe.... LOL JK

 

[Wendy_Rebecca]

Has anyone stopped to consider...

Has anyone stopped to consider that most of Apple's "profits" come from interest on the $5B cash hoard?

Honestly. Think about it.

-----------

Fear the Steve:

 

[MacRAND]

Why doesn't Apple buy DISNEY

Originally posted by mclosers
It just doesn't make sense.... even if Apple had enough cash to buy Disney I don't think they would.

But, Apple should.
The best reason is obvious, so Apple can start up a PC company called
GOOFY™ Computers, etc. etc. etc. ...
Do I have to dink another bottle of Crown Royal and explain it all over again?
Suffering suck a tash...

 

[grouse]

or contribute a load of dosh to....

I dunno

John Edwards?

 

[mikeabnooy]

if Apple is debt free... how does that benefit them? what does that do for them as a company?

 

[NusuniAdmin]

Originally posted by mikeabnooy
if Apple is debt free... how does that benefit them? what does that do for them as a company?

absolutely nothing, except that they can go in debt again haha

 

[billyboy]

Apple have more spare cash than Walmart, and about the same as M$. The only difference financially, is that MS have another $40bn in highly liquid assets to call on. There are plenty of other differences between the three companies, but there are endless threads on that.

As someone mentioned earlier, I would think that the debt free stage is just part of a model that Jobs and co have been working on for several years. He is obviously more savvy than the days when Apple basically misread the plot and lost out to MS and co, so we can only wonder what the "Pixar touch" will equate to with Apple in the near future.

 

[fatbarstard]

loads of cash = burn hole in pocket

The point made ealrier that Apple's profits come from the interst on its cash is completely right - it doesn't make money from operations, presumably becuase it is spending so much on development and product innovation.

LIke a lot of growth companies their short term profits would improve dramatically becuase their margins before development costs are quite high (just like Apple's). Cut the development and boost the earnings. But this is a nonsense becuase the value of the growth option in Apple is so large that only an idiot (read accountant) would want to cut development and boost short term profits...

Despite that Wall Street does investors really do take a long term view of a company's earnings power when setting the share price.

Cash in the bank give Apple flexibility - $4.3 billion worth of flexibility. That in itself has a huge option value in an industry sector like computers.

 

[tychay]

Originally posted by mikeabnooy
if Apple is debt free... how does that benefit them? what does that do for them as a company?

A debt free company means that it is a larger takeover target (because the takeover company won't assume any debt).

Also, the bond rating of tech companies is usually not very good relative to their cash position (I think Apple's rating is a BB or a B even though they sit on $4bn). This means that usually issuing debt is sort of a rip off.

Basically this does nothing except make some people feel good. Apple has had $4bn+ vs. $300mn in debt for a long while now. The $300mn in bonds finally came due and Apple paid it off. Simple as that.

BTW, those bonds were issued in 1994! some people here remember what Apple was like in 1994--a year before Windows 95 came out.

Take care,

terry

 

[dgdosen]

Originally posted by tychay
A debt free company means that it is a larger takeover target (because the takeover company won't assume any debt).

Also, the bond rating of tech companies is usually not very good relative to their cash position (I think Apple's rating is a BB or a B even though they sit on $4bn). This means that usually issuing debt is sort of a rip off.

Basically this does nothing except make some people feel good. Apple has had $4bn+ vs. $300mn in debt for a long while now. The $300mn in bonds finally came due and Apple paid it off. Simple as that.

BTW, those bonds were issued in 1994! some people here remember what Apple was like in 1994--a year before Windows 95 came out.

Take care,

terry

What? The debt a company has is just one part of the equation to determine a takeover target. A company is worth its future cashflows discounted by it's risk rate - and debt it just one part.

The fact that a company has no little bearing on their bond rating (meaning many companies have no debt with high ratings). The fact the company might not be a going concern or a is in a riskier industr is a driver of that rating.

The fact that Apple has no debt indicates to me that they have no projects worth investing in that can provide a return greater than their current borrowing rate. That either means that all thsoe neat projects of well-funded (I hope) or that many of these projects aren't worth the gamble. As an investor, I'd ask why they can't find products to invest in during today's record low interest rates, surely Apple has more good ideas. Somone is afraid to pull the trigger.

 

[ebuddy889]

99mac.se publishes an internal memo from Steve Jobs to Apple employees today.

According to the Memo, Jobs states that "Today is a historic day of sorts for our company." Apple used $300 million in cash to pay off the rest of their debt, and is now a debt-free company. A big turnaround from over $1 billion in debt in mid-1997. Also noted in the memo is that Apple currently has $4.8 billion in the bank at this time.

What the memo didn't tell you was the $300 million was a loan paid back to Bill Gates. Now Windows will be superior..... Just kiddin.

 

[Urdam]

Wow, good news