It is actually $60B and they will be covering the incentive shares with cash. So it would leave 939 million shares - 150 million shares = 789 million outstanding shares. By comparison Dell has 1.75 billion outstanding shares.
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Apple More Than Doubles Capital Return Program to $100 Billion
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It is actually $60B and they will be covering the incentive shares with cash. So it would leave 939 million shares - 150 million shares = 789 million outstanding shares. By comparison Dell has 1.75 billion outstanding shares.
So what point are you trying to make? What relevance is the number of Dell shares to the point I was making?
Apple is flooding cash out but the owners of the company (shareholders) are getting hosed.
They were up over 5% for a little while then fizzled off within an hour after announcing their financials in after hours trading. Tomorrow will be more interesting though, I predict AAPL will see a range of -3% - +1.5%. Give the hedge fund managers and robo-traders exactly what they were looking for only to get punished for it, that's the Street for you, of course.
I think we need to create a FAQ to explain to folks about how share buy backs work and what the point is. the point is to benefit the shareholders. that is a valid goal for a company. it will help the stock price either in the long run and that support might show up as early as tomorrow. but even if it doesnt. shareholder will get the benefit of having the opposite of share dillution. this is great news for shareholders. it also signals to be that apple has plans for.robust revenues going forward. I can't wait for the Fall product launches!
Frankly I think it's totally stupid. If Steve Jobs was still alive he wouldn't be paying out a dime in dividends or buying back any of Apple's shares. He would never set Apple on a path of basically trying to keep shareholders happy. He would focus on innovation, innovation and still more innovation. If shareholders weren't happy, he would tell them to sell their shares. If the stock price was up or down, he wouldn't care. What he cared about was is Apple being the most innovative it can be and are consumers happy with our products.
And you know what? That's what having 100B+ dollars in the bank truly buys you - freedom from having to care about what the analyst think or worrying over who buying or selling your shares.
But apparently Cook hasn't come to the realization yet. He is too busy trying to keep Wall Street happy rather than trying to get a new Mac Pro out.
And you know what? That's what having 100B+ dollars in the bank truly buys you - freedom from having to care about what the analyst think or worrying over who buying or selling your shares.
But apparently Cook hasn't come to the realization yet. He is too busy trying to keep Wall Street happy rather than trying to get a new Mac Pro out.
That's a stupid move.
The only reason a corporation needs shareholders, or a high stock price, as a living entity, is to have cash for its development.
Returning cash means the shareholders are a burden on the operations of the company instead of being a help, and to be at the mercy of Wall Street if it needs later more cash.
Keeping 60 billions cash means Apple don't need to heed shareholders for 5 years at least.
I can't understand why Tim Cook would do this, the shareholders are not stupid enough to request a change of management. Except if he wants to inflate the management stock options, but even that is very short term, he can't announce 60 billions buy back everyday.
The only reason a corporation needs shareholders, or a high stock price, as a living entity, is to have cash for its development.
Returning cash means the shareholders are a burden on the operations of the company instead of being a help, and to be at the mercy of Wall Street if it needs later more cash.
Keeping 60 billions cash means Apple don't need to heed shareholders for 5 years at least.
I can't understand why Tim Cook would do this, the shareholders are not stupid enough to request a change of management. Except if he wants to inflate the management stock options, but even that is very short term, he can't announce 60 billions buy back everyday.
Of course Apple doesn't need it's shareholders NOW, but they needed or wanted the cash infusion when they went public. The shareholders are collectively the company. That's like getting a loan to open a business, the business is widely successful then not wanting to pay back the bank since you don't need the loan anymore, it doesn't work that way.
About shareholders not being stupid enough to vote out management although in my opinion it would be a horrible idea, I think you under estimate the possibility. Who knows it is possible that the company would be more successful under new management, again I highly doubt it, but seeing an equity drop this much causes people to get emotional and want the head of someone warranted or not.
It was bound to happen, no matter who was sitting in the CEO's chair. Apple's cash hoard just got too big. A shareholder could generate more return with that cash than Apple could just hoarding it in banks.
And when you say that Tim Cook is wasting time trying to keep Wall Street happy, it's funny, because I've read quite a few posts calling Tim Cook an inept and clueless CEO for not saying anything when his company's stock has lost $200 billion in market value.
I dont think thats it at all. There are benefits to having sustainable and sensible amounts of debt on your balance sheet. Borrowing to pay a dividend or repurchase shares is a common way of introducing debt. It would be done by choice, not out of necessity.
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If 50B disappeared from the balance sheet from a share buy back, it wouldnt be much of a balance sheet would it. They dropped the $50b asset (cash), and also reduced the owners equity by 50b.
Investors do have squat to show for it - (completely oversimplified but anyway...) if they took the buy back they have $400 per share more. If they didnt, they have a bigger slice of a smaller pie so are in the same situation they were the day before. If the company paid a dividend, investors have their dividend, but they have the same slice of a smaller pie so theoretically their shares are worth less.
Anyway, its good for Apple. A company usually buys back its shares when it is undervalued and when it has confidence the share price is going to increase. Wall street knows this, so the buy back is a good signal for them - that Apple is betting on its own shares increasing.
Hang in there.
They arent throwing cash away. A buy back is good for everyone. Investors get the chance to cash out at above market rates. The company gets to reduce its outstanding shares while prices are depressed.
If the company needs cash in the future to make an icar or buy rupert murdoch, they can just issue new shares and get more cash. if the market price is higher at that time (as apple obviously thinks it will be), they will have more cash for every new share issued compared to the ones bought back, so they can buy a bigger slice of rupert.
The buyback is better than sitting on a pile of cash.
Up to a certain point, it is more beneficial for a company to finance itself by borrowing money rather than financing itself by shareholders, so it isn't necessarily a bad thing.
I don't see the point in buying back their own shares? It's not like they are going to take the company private. What do they gain from buying back their shares? Can they sell them again if the price goes back up and make a tidy profit?
Surely if they used that cash pile to make major strategic acquisitions that directly affect the bottom line then the shares would be more likely to go back up again. Use the cash to generate revenue and profits.
Most of the share price volatility comes from the institutional investors essentially playing one big game of roulette. Buy > drive the price up > sell and take a profit > drive the price down > then buy again > repeat cycle over and over again until the people losing out each time get fed up and stop playing ball.
Surely if they used that cash pile to make major strategic acquisitions that directly affect the bottom line then the shares would be more likely to go back up again. Use the cash to generate revenue and profits.
Most of the share price volatility comes from the institutional investors essentially playing one big game of roulette. Buy > drive the price up > sell and take a profit > drive the price down > then buy again > repeat cycle over and over again until the people losing out each time get fed up and stop playing ball.
It's amazing how many people seem to know what Steve would/wouldn't have done. As if everything Steve did/didn't do was always right.
Sweet! I bought some Apple shares yesterday, already paid off the transaction fees 
Obviously it won't last without some momentum, hopefully we'll get some news sooner than autumn, I think maybe some info on the next OS X should be due soon, maybe an iOS preview?
I hope new Mac Pros aren't going to be in autumn, Apple needs to release something as buying back shares won't inflate the share value for long.
Obviously it won't last without some momentum, hopefully we'll get some news sooner than autumn, I think maybe some info on the next OS X should be due soon, maybe an iOS preview?
I hope new Mac Pros aren't going to be in autumn, Apple needs to release something as buying back shares won't inflate the share value for long.
I'm so sick of Cook
Steve Jobs would have told the shareholders to take a walk. I'm ready for a regime change, Cook is proving to be weak in regards to dealing with the corps.
Steve Jobs would have told the shareholders to take a walk. I'm ready for a regime change, Cook is proving to be weak in regards to dealing with the corps.
When companies buy back their own stock means they are out of ideas to grow the business with cash they have and instead use it to fiddle with their stock price.
Apple with 40+ billion on the balance sheet, buying back stock, is telling you it has nothing in the pipeline to drive future Earnings Per Share.
Reducing shares boosts EPS and makes earnings beats easier. BUT if their is a miss and loss it magnifies the loss more than it magnifies the beat.
Their number 1 problem now has got to be margins. The margins they post I bet are impossible to keep up. 10% or less is where they are headed. The only way to stop this is to continue to innovate. BUT once you buy back shares you pretty much just let the market know the truth. Those listening to the earnings call I bet figured this out VERY QUICKLY!!!
One thing though "MAC PRO", if they can get the Pro going again and release it this spring and its a knockout then maybe they can get margins going again. BUT if they cant pull a rabbit out of the hat on it then they really don't have any idea what to do!
I give them to the end of this year and thats me being "Real NICE" with timelines. Yes I know MacPro is the lowest seller but margins would be high.
OH and lastly""
Wait for it.
They are BORROWING the money to avoid paying taxes on the overseas funds. WTF THIS IS STUPID!!
I Don't think they are done for good just their ability to steer the market and the industry is about done.
Apple with 40+ billion on the balance sheet, buying back stock, is telling you it has nothing in the pipeline to drive future Earnings Per Share.
Reducing shares boosts EPS and makes earnings beats easier. BUT if their is a miss and loss it magnifies the loss more than it magnifies the beat.
Their number 1 problem now has got to be margins. The margins they post I bet are impossible to keep up. 10% or less is where they are headed. The only way to stop this is to continue to innovate. BUT once you buy back shares you pretty much just let the market know the truth. Those listening to the earnings call I bet figured this out VERY QUICKLY!!!
One thing though "MAC PRO", if they can get the Pro going again and release it this spring and its a knockout then maybe they can get margins going again. BUT if they cant pull a rabbit out of the hat on it then they really don't have any idea what to do!
I give them to the end of this year and thats me being "Real NICE" with timelines. Yes I know MacPro is the lowest seller but margins would be high.
OH and lastly""
Wait for it.
They are BORROWING the money to avoid paying taxes on the overseas funds. WTF
THIS IS STUPID!!I Don't think they are done for good just their ability to steer the market and the industry is about done.
Shareholders want growth. They don't care about dividends and buybacks when the stock is appreciating. These are concerns when the stock is flat or down.
They need to focus on the products again as Steve would and the stock price will take care of itself.
When your best ideas for getting the stock price up is coming from the CFO and not your product team, that's not a good long term business plan.
Not sure your analysis is correct. My point is that $50,000,000,000 in CASH is gone - money that could have been given to the owners - $51 per share. An increase in shareholder equity gets distributed how?
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If you mean Steve Jobs was their source of innovation, well then you are greatly mistaken. Steve Jobs never invented anything. His genius was his "vision". The uncanny ability to recognize someone else's great idea and then to hone an polish that idea and finally release that great new innovation to an unsuspecting public. He was also a master showman/salesman, but never a real inventor per se.
You sure about that are you? Why is he named on over 300 patents and has been inducted into National Inventors Hall of Fame in 2012?
Also - http://patft.uspto.gov/netacgi/nph-...tm&r=0&f=S&l=50&d=PTXT&Query=IN/"Jobs,+Steve"
They are BORROWING the money to avoid paying taxes on the overseas funds. WTF
Shares they buy back don't get dividends paid. If they can manage to borrow money for less than the dividends they'd pay out on those shares, they've made money with the loan.
Governments and large corporations don't work like your checkbook does.