Apple to Host Conference Call Monday Concerning its Near $100 Billion Cash Balance

[IJ Reilly]

I'm guessing they will announce plans for a special dividend sometime in 2012 (maybe $15-25/share). Right now, qualifying dividends are taxed at 15% rather than at normal income rates (i.e. the same as long term capital gains). That special tax treatment is set to expire at the end of the year. It is also possible they will announce a small regular dividend (perhaps $1/share) that would not be very costly, but would open up their stock to investment by pension plans and mutual funds whose charters require them to invest in dividend-paying stocks. A stock buyback is also possible, but a bit silly when the stock is trading at record highs.

I also would not be surprised if they announce plans to invest a portion of their stockpile in an "incubator" for research and development (i.e. making private equity-type investments in startups). That would be productive use of the money, and potentially give Apple some leverage in the coming years in terms of intellectual property. Apple has a big enough stockpile of cash and investments that today, it really looks like an investment manager and technology company rolled into one. I'm not saying they will, but it would not surprise me.

Good thoughts, quite possible scenarios -- though I'd expect a regular dividend on the order of 1-2% if they go that route. A $1.00 dividend wouldn't even be worth processing the paperwork. It comes to something like 0.15%, pretty much a joke dividend, and especially for a company that takes in that kind of free cash every five days.

Buybacks, I just don't like. They don't do much for stockholders except in the abstract.

 

[cr2sh]

I think this is the most interesting media event since the original iPhone.. there's so many possibilities and it could really set the future direction of the entire company.

I'd love to see them do something to further their vertical product structure.. something that would allow them to provide data to end users without having to rely on third parties. Launch a cellular network, acquire T-mobile or something similar.

Other ideas include some sort of massive Steve Jobs statue or a massive and aggressive patent acquisition strategy.

 

[Bigredhawkeye]

Maybe they'll donate it to the government to lessen our debt by $100 billion.

Not like that'd do a whole lot

 

[Warbrain]

This happens a couple hours after the Tokyo market closes I believe.

We're gonna see a new subsidiary in the making.

7 hours after.

 

[basesloaded190]

I always thought the general consensus was that dividends are for when companies see their growth potential dwindling and use dividends as way to attract more share holders.

I remember Microsoft was in a similar position as Apple is now with billions of dollars sitting not doing anything. They were getting pressure from shareholders wanting them to do something with it and they paid out dividends.

 

[Slurpy2k8]

I bet they'll buy Twitter, integrate it with Ping, etc.

I know this fell through once, but they should try again - Buy Dropbox. Seriously, iCloud with Dropbox features (or erm, Dropbox with iCloud features) would be a dream come true.

Maybe they could spend the money on upping their free storage for iCloud users? 5GB *sigh*

I also wouldn't mind if they paid for my college education

Steve Jobs approached Dropbox re an acquisition. They refused.

http://www.businessinsider.com/drop...-2011-12?utm_source=alerts&nr_email_referer=1

 

[IJ Reilly]

I always thought the general consensus was that dividends are for when companies see their growth potential dwindling and use dividends as way to attract more share holders.

No sir. Dividends are paid when a company accumulates cash more quickly than they can reinvest it in growth. This may happen for a number of reason, not just when companies have significant cash throw-offs and very limited earnings growth opportunities. Think banks, utilities. It is also appropriate when the company is growing earnings quickly and has low capitalization requirements. That's Apple.

 

[Mr. Gates]

Iron Man suit .

 

[IJ Reilly]

That makes sense from the perspective of a stock holder, a stock buy back makes more sense for apple.

Keep in mind that many of the company's largest shareholders sit on the board, and are their top executives. Those are the stockholders they really care about.

 

[Peace]

7 hours after.

That means the value of the Japanese companys stock won't be affected.

 

[smithrh]

Sony or Nintendo?

Why buy something you're currently competing against pretty handily?

 

[Rocketman]

They will announce that during the sell in May and go away time frame they will buy back stock. Or, they will announce they have received $500B in Fed finance at 1% to go private, and make their technology available to the other 50% of the world population that craves freedom.



Rocketman

 

[smithrh]

Buybacks, I just don't like. They don't do much for stockholders except in the abstract.

Yep.

I've worked for a few companies that did massive stock buybacks. It really pissed me off as there were really critical projects that needed funding - it went to the stock buyback instead.

Oh, and by the way, the stock price kept on dropping, so that money was essentially thrown in the furnace.

Actually, an incinerator as furnace implies you get something of value (heat) for burning something.

 

[Glideslope]

This happens a couple hours after the Tokyo market closes I believe.

We're gonna see a new subsidiary in the making.

Interesting. Apple has been trying to move closer to Japan with collaborations which is nice as they are the only country left in Asia with Honor.

What about a purchase of Sharp, and a huge investment in production capacity?

I like this one.

 

[ohbrilliance]

Everyone has more money then them! They are tens of trillions in debt. There is no one more poor than the USA.

The USA as a whole is rich, it's the government that's poor.

 

[ThisIsNotMe]

My goodness you're not the first one to say this it's probably sarcasm, but no they couldn't. First of all the DOJ would put a stop to it before Tim Cook could get the words out of his mouth. Secondly yes, Apple has tons of cash probably around $105 billion or more by now, but much of that would have to pay a 30%+ tax on to get it back to the states and Microsoft has a market cap of around $275 billion. That's just the market cap Microsoft would not agree to it without a premium for their shareholder most likely a pretty significant one. Lastly why in the world would Apple even want Microsoft? Don't get me wrong Microsoft is a massively profitable company, but I can't see them adding anything to Apple who already have their own OS, hardware, etc. The only thing I could see apple maybe getting any use out of is their entertainment division, and even that is questionable.

What makes you say that?

The DOJ let Google buy DoubleClick and AdMob.

 

[Bubba Satori]

We're gonna see a new subsidiary in the making.

Apple Computer Inc.

Featuring a full line of computers.
Totally configurable models, BTO by the customer.
No options forbidden to the customer.

CEO? Somebody who likes Macs.

 

[GenesisST]

Why not the US Government!

They have more money than them..so why not!

Well we all have more money than the US Government!

 

[diamond3]

As a stockholder, I hope they don't do any dividends. It seems to me that where they are at financially and how well the stock has performed this year, some sort of news or glimpse into the direction the company would have a greater effect than a dividend. As much as I wish it wasn't something as simple as a dividend, that's probably what it will be. I can't imagine apple having something big up there sleeves as far as investing goes and there not be a single rumor about it.

 

[iMikeT]

I doubt dividends are going to happen so my pick would be among these:

• New data center
• US factory
• Acquisition of other tech companies
• New R&D facility
• Launch a satellite in space
• Donate to charity
• Buy their own country

 

[lostngone]

Clone Steve Jobs

They are going to use all that money for R&D to clone Steve Jobs.

 

[adversus]

Well we all have more money than the US Government!

No, the US government has cash. What they also have is debt. So while my debt is lower than the government's, their cash is much, much, much more.

 

[OT2000]

Tim Cook will make it rain.

 

[Macboy Pro]

Donate a billion to the Ron Paul campaign.

Heck, the only thing worse than that would be to donate it to the Iranian Nuclear Weapon Development Fund....

 

[IJ Reilly]

Yep.

I've worked for a few companies that did massive stock buybacks. It really pissed me off as there were really critical projects that needed funding - it went to the stock buyback instead.

Oh, and by the way, the stock price kept on dropping, so that money was essentially thrown in the furnace.

Actually, an incinerator as furnace implies you get something of value (heat) for burning something.

In theory at least the money didn't totally go down the proverbial rat hole, since it increased EPS from whatever it would have been by the percentage of the buyback. Still, I say give us the money. I could figure out something to do with it, like pay for that new iPad I just bought.