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Apple Sells $14 Billion in Bonds to Take Advantage of Low Interest Rates
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So they take on debt to pay out 50% of next years profit in dividends.
Next year shareholders will want atleast the same dividend forcing Apple to either grow at an extreme rate or take out another loan.
"Markets" are nuts and sooner or later something will give.
Next year shareholders will want atleast the same dividend forcing Apple to either grow at an extreme rate or take out another loan.
"Markets" are nuts and sooner or later something will give.
I don’t think you understand the business Nintendo has if you’re talking about power. Their IP is the money earner and aside from actually buying Nintendo money can’t get you what they have.
I suggest they buy the world’s smallest violin factory.
After years of hoarding cash, Apple has sold $14 billion in bonds to take advantage of cheap borrowing costs in order to return more cash to shareholders, according to a report by Bloomberg.
The report notes that until last year, Apple hadn't borrowed in the U.S. investment-grade market more than once in a calendar year since 2017, but low interest rates were too tempting for the company in its pursuit of aggressive share buybacks and dividends. Apple may also use it in funding for working capital, capital expenditures, acquisition and repayment of debt, according to Bloomberg's source.
Apple is believed to be sitting on $196 billion of cash, but has been working to reduce its net cash position, largely through payouts to stockholders. The company recently reported on earnings on the last quarter in which revenue topped $100 billion for the first time.
Article Link: Apple Sells $14 Billion in Bonds to Take Advantage of Low Interest Rates
that way everyone can play on the smallest iViolin about having too much billions in cash.
They are...but they can't get past the mythical man-month. No one can. R&D takes time.Imagine if they'd invest even a fraction of this amount into R&D instead of sticking to minor iterations over and over and over
Otherwise, Intel would have reached a $10T valuation in 2000 and Exxon would be selling solar/wind energy for 50% less than everyone else on the planet...and again, be worth $10T.
OK... Of course. Then please elaborate in detail to support your opinion.
No, I get that, my point is that with the money spent on Apple TV+ you could be building your own gaming IP and third-party exclusives, in turn generating a call effect to position the whole ecosystem as a first-class player and go-to platform in the industry.
Nintendo has sold 80 million Switch to date (it took 4 years), Apple has sold 1 billion iOS devices in the same timeframe (iPod touch, iPhone and iPads). The devices are there, the money is there, it's a matter of Apple pursuing it.
Remember once Steve Jobs wanted to buy Bungie, Halo's maker, loosing it to Microsoft. With so much cash in hand, I really dont see why Apple is investing on making a Car and not on a AAA gaming strategy.
Waiting for someone to say that Apple should give away all that money away to the less fortunate
I think by not increasing prices along with inflation, they are lowering them. For instance, I bought a macbook in 2006 and paid the educational discount price of $899. I bought my niece an M1 macbook air in 2021 and paid $899 educational price. I don't think they are necessarily taking a loss, but I do think they are charging less than they could.
A company can fund itself in three ways broadly speaking: cash from earnings, equity or debt. It makes sense to fund yourself with the cheapest source.
They clearly think that their cash will yield higher than Treasuries + spread across all maturities, whether it's through acquisitions or some investments. Their cost of equity is in the double digits. Issuing lots extremely low yield debt is a no brainer, up to a point. They're very far away from the point where having too much debt becomes a concern of being overleveraged.
Apple's done this before and they're continuing to make smart long term money moves. In other words, their CFO is doing his job.
They clearly think that their cash will yield higher than Treasuries + spread across all maturities, whether it's through acquisitions or some investments. Their cost of equity is in the double digits. Issuing lots extremely low yield debt is a no brainer, up to a point. They're very far away from the point where having too much debt becomes a concern of being overleveraged.
Apple's done this before and they're continuing to make smart long term money moves. In other words, their CFO is doing his job.
Maybe because a LOT more people watch TV vs playing games? Same goes for driving cars. My parents both have iPhones, my dad plays solitaire, other than that, they play zero games, but they both watch TV regularly. They can bleed money trying to enter a market with billions of consumers (TV) or one with millions of consumers (Games). In all honesty, I'd love to see them work on both, buy a couple of top-notch gaming rights and have them showcase what can be done, but don't give up on TV to do it.
Automating cars is a win/win for Apple and Google. If you aren't driving a car but still stuck sitting in it what are you likely to do, consume content. Where are you going to do that? Your phone or tablet most likely.
Apple bonds are safer than U.S. Treasurys over the long term in terms of preservation of buying power. Apple has the real printing press.
It's called Financial Engineering, & Congress should make it illegal, at least for U.S.-based companies.
They prop themselves up, as Projected P/E equations do NOT take into account Debt !
An alternative would be a Debt-adjusted Projected P/E ... let's just call it the "Timmy P/E"
For some UN-known reason, Wall Street doesn't catch on !
They prop themselves up, as Projected P/E equations do NOT take into account Debt !
An alternative would be a Debt-adjusted Projected P/E ... let's just call it the "Timmy P/E"
For some UN-known reason, Wall Street doesn't catch on !
Do you own a 15" 2018 MBP? After many years of Apple Macbook ownership the price, keyboard problems, poor battery life (both life and lifetime), overpriced storage options this one had really soured me on the new Apple...
This is sick and will bring the US down. The cash should go to growth and margin reduction, and not to the stockholders. This is a stupid and short-sighted policy.
YES, Apple - Boost the dividend so it's substantial enough to make new investors want to buy shares. A win-win for all.
Not sure - I can imagine that there are actually reasons to not want growth, in case it opens you up to monopoly scrutiny (this is why MS provided a loan to Apple in the 1990s to avoid them going bancrupt) - Apple wants all the profits, but not all the market share - therefore this might be a good strategy.
This is EXACTLY why they are funding these buybacks with debt. They have the cash as collateral and the cost of debt is way cheaper than the cost of taxes to onshore the money, even at 21% corporate tax rate
No. Though I do own a BTO 13" 2017 MBP. No problems at all. It has served me well with heavy daily usage.
Wasn't wild about the touchbar. But sort of got used to it. That problem was solved moving to an M1 MBA, which I've had since early December. For me, it's as close to perfection as one could expect for an entry level laptop. Super fast, long battery life, astonishing 3,750/2,750 Mb/sec SSD speeds, no fan, stays cool (gets a little warm running X-Plane), and light weight.
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LMAO would you? Be real about it. If you were running a major corporation selling products that sell regardless of the higher price the last thing you're going to do is lower the price of goods. Having a boat load of cash is not a reason to do so.
Let's assume you aren't just completely clueless about how multinational corporate tax strategy works. How on earth is one company borrowing money, at historically low interest rates, that it could completely cover with cash in hand if they wanted to repatriate it - going to "bring down" a whole country?
That used to be an issue. But with the passage of the Tax Cuts and Jobs Act, it isn't now. The previously not repatriated foreign earnings are deemed repatriated now, and Apple owes U.S. income taxes (at a lowered rate) on them regardless. Going forward, foreign earnings of U.S. corporations are generally not taxable in the U.S. even if they are repatriated. There are some minimum taxation rules for those earnings, but those rules apply even if the earnings aren't repatriated.