nothing new
IIRC, Apple Computer has paid dividends before when they were sitting on far less cash.
IIRC, Apple Computer has paid dividends before when they were sitting on far less cash.
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Apple Preparing to Offer 'Significant' Dividend for Investors Early Next Year?
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They did it exactly because they had no other means to prop up share prices or attract investors back then...
Speaking as stockholder I'm not too excited about a dividend. I'm somewhat certain that Apple can turn money into more money far FAR better than I can. I'd rather let them do that instead of giving it to me.
It'll be better for me in the long run, and the long run is why I'm into it.
It'll be better for me in the long run, and the long run is why I'm into it.
I think I calculated a little while back that based simply on the interest Apple is making off of their cash, they could offer a dividend of about $.50 per quarter... and that doesn't even touch profits.
Paying out dividends is an absolutely horrible idea. A dividend-bearing stock is a sign of:
1. the company is shifting from a growth company to a value company (like GE or Microsoft), and in the mind of investors and customers, it means the company is no longer on the cutting-edge and is more of a utility. The end result is that the stock price will languish.
2. the company board has absolutely no idea how else to build value with its cash
Disclaimer: I have shares in AAPL.
1. the company is shifting from a growth company to a value company (like GE or Microsoft), and in the mind of investors and customers, it means the company is no longer on the cutting-edge and is more of a utility. The end result is that the stock price will languish.
2. the company board has absolutely no idea how else to build value with its cash
Disclaimer: I have shares in AAPL.
I think it's interesting how rather quickly Apple execs are flexing their power now that Jobs is gone.
First, they gave themselves $400 million in bonuses. They rearranged some of their positions. It looks like they're going to give dividends as people have asked.
What could be next?
Seven inch tablets? iPhones with keyboards? Dogs and cats, living together??
First, they gave themselves $400 million in bonuses. They rearranged some of their positions. It looks like they're going to give dividends as people have asked.
What could be next?
Seven inch tablets? iPhones with keyboards? Dogs and cats, living together??
Yes, they could "just sell," (and there is actually a tax advantage for doing that vs. receiving a dividend), but at some point a successful company eventually needs to start paying dividends to return earnings to shareholders.
The IRS has rules that prohibit companies from "hoarding" cash. Since dividends are taxable income to recipients, the longer a company can hold out before paying, the longer it is before shareholders have taxable distributions. The IRS realizes this and thus if a company can't demonstrate that it has a need to hold cash, it can assess a special tax on a company. Microsoft ran into this issue about 10 years ago (when it started paying dividends).
Normally, growing companies claim (truthfully) that they need the cash to finance further growth. However, if a company has amassed $80 billion, and invests about $4-8 billion per year that argument weakens a bit.
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Steve Jobs was definitely stubborn. My guess is that some of these executives had these ideas for quite a while but didn't want to go against Steve Jobs. Obviously there's a danger that they do what Walt Disney's successors did after he died, but on the other hand, there's also a chance that they make some good moves that might not have been possible in the Steve Jobs era.
Wasn't all that cash necessary to fulfill one of Steve Jobs' last wishes - to destroy Android?
Google, you f...ing ripped off the iPhone, wholesale ripped us off. Grand theft. I will spend my last dying breath if I need to, and I will spend every penny of Apples $40 billion in the bank, to right this wrong. Im going to destroy Android, because its a stolen product. Im willing to go to thermonuclear war on this. They are scared to death, because they know they are guilty. Outside of Search, Googles productsAndroid, Google Docsare ****."
Steve Jobs, Isaacson Walter (2011-10-24).
Or perhaps this is a way to save face and avoid the embarrassment of flushing cash down the toilette? C'mon Apple, we want to see a good fight! let's see how many hourly lawyers can all those billions buy!
Google, you f...ing ripped off the iPhone, wholesale ripped us off. Grand theft. I will spend my last dying breath if I need to, and I will spend every penny of Apples $40 billion in the bank, to right this wrong. Im going to destroy Android, because its a stolen product. Im willing to go to thermonuclear war on this. They are scared to death, because they know they are guilty. Outside of Search, Googles productsAndroid, Google Docsare ****."
Steve Jobs, Isaacson Walter (2011-10-24).
Or perhaps this is a way to save face and avoid the embarrassment of flushing cash down the toilette? C'mon Apple, we want to see a good fight! let's see how many hourly lawyers can all those billions buy!
I'm not sure you understand investing. The purpose of owning stocks has always been to participate in the profits of a company. If you own stock you own a piece of the company. Dividends are a way of returning part of a stock holders investment to them.
So yes, if you are a shareholder you can and hopefully will eventually make back your initial investment plus profits via dividends. That's the point.
Companies need long term investors in order to guarentee stability in their stock prices. Day traders live and die by volatility. Companies need stability and long-term investors do not invest without dividends.
We just sold all out AAPL stock. Made a nice profit. But you must realize that without a dividend you have no profit until you sell your stock. Don't believe me? Go ask all those "paper" dellionairs. When the dotcom bust came a lot of people who were very rich on paper suddenly found themselves in the poor house and in a lot of debt.
Apple is a publicly traded company, Apple is owned wholly by it's share holders. If you own even one share of apple you are a part owner of the company. The better question is why would the Board of Directors want to issue a dividend, there are a couple reasons one being they own shares and would get dividends equal to their ownership, the other is if enough share holders think they are doing a dis service by refusing to issue a dividend a proxy fight can ensue and if successful the board members can lose their places on the board.
About whether it's a good thing or not for shareholders is hard to say on one side people may see it as the stock reaching maturity and therefore fall out of favor with growth investors, on the other if it's thought that an appreciable dividend would be continuing until further notice then many income investors and funds may flock to it increasing share price besides the dividend.
I agree with the later part there's a difference between a safety net and an unreasonable hoard of cash, this is the latter. I feel if a dividend were to happen income investors and funds would buy rapidly. Many dividend funds won't include an equity that doesn't pay a dividend and since for the most part companies in the Tech sector don't pay a dividend I feel it would be bought even more since the income oriented funds would add it to better diversify sector risk.
Just my opinion and worth exactly what I charge for it.
You have no idea what you are talking about as I said Apple is a public company, They aren't selling debt they aren't bond holders they are share holders, Apple's share holders are Apple.
Disclaimer: Long AAPL
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Excellent post............. and a bit too informed for this crew.
Disclaimer: VERY long aapl
JohnG
Well said. I would add one more thing. The major investors in any large company are usually big pension funds. They require dividends to survive. Any company hoarding cash and not returning some of the profits to the investors will in all likelyhood see an exodus of these large investors. It is simply not a viable investment for long term horizons. If these investors do leave the you will see a real drop in stock prices.
Having said that, I sold my 1000 shares a few weeks ago. If they had been paying a dividend I probably would have kept them. Still don't regret the sell though.
Hehe I wish I could say I had that much skin in the game unfortunately I do not, maybe someday.
We had been buying a little at a time for a few years. Stopped buying last year when the stock hit $200 or so. It was a good time to sell because we took some bad hits on our BRIC fund. So we do have some write-offs. It's not all a bed of roses in the stock market these days, especially for those of us who are older and don't have a lot of time to recoup losses. You'll be fine, I suspect you're young. Just pay attention and hang in there.
I'm 25 so most would probably consider that young, and thanks for the vote of confidence.
Steve is gone - so it doesn't matter what he would have done.
Dividends could help reduce Apple's cash position - which can be a liability in some situations.
You've outdone yourself as far as the absurdity of a single post goes. Congratulations.
I'm 60 and recently retired so, yeah, I would consider you young. I envy you. All the wonderful high-tech things to come. I have loved techy stuff since I was a kid watching Star Trek. I'm finally beginning to realize I may not live long enough to see warp drive. Sigh....
New Products in markets Apple currently doesn't target creates a need for them to invest into R&D, more jobs with a return on investment.
Providing a dividend does nothing but pacify a few large investors.
Providing a dividend does nothing but pacify a few large investors.
Only if Apple decides to donate it. And if memory servers me, Steve did away with their corporate charity donations. But it would be nice if they reinstituted it to a degree. The good news is that hopefully if they institute a dividend many stockholders will be donating some of their profits. No dividend, no profit until you sell so a dividend makes it more likely some will make it to donations.