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while the fund managers may have a point that apple probably is heavy on the cash side, i find it funny how these 'certified financial analysts' who has probably never worked a day running the tech or consumer electronics company is trying to tell one of the most successful companies what to do.

too much cash ... coming from the same folks that (arguably) brought the global financial sector to the brink of disaster - giving commentary on the team of people who brought a company from the brink of disaster.


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Apple has a fiduciary duty to its shareholders. Apple is obligated to make decisions that maximize shareholder wealth. If holding a large amount of cash runs counter to the goal of maximizing shareholder wealth, shareholders have every right to demand that Apple shape up.

As a shareholder, I don't mind if Apple holds that much cash. Apple's track record has shown that they know what they're doing. Steve Jobs is a man of few peers. So is Tim Cook. I'm inclined to let Apple do their thing. But other shareholders may not see it that way. They're entitled to their opinion.
 
Apple has a fiduciary duty to its shareholders. Apple is obligated to make decisions that maximize shareholder wealth. If holding a large amount of cash runs counter to the goal of maximizing shareholder wealth, shareholders have every right to demand that Apple shape up.

As a shareholder, I don't mind if Apple holds that much cash. Apple's track record has shown that they know what they're doing. Steve Jobs is a man of few peers. So is Tim Cook. I'm inclined to let Apple do their thing. But other shareholders may not see it that way. They're entitled to their opinion.

The REAL issue is whether Apple's shareholders would be able to generate a higher rate of of return if the cash equivalents were to be distributed via way of dividend or stock buyback.

As an Apple shareholder, I would not want Apple to distribute the money to me, as I know I will not able to generate the same rate of return as Apple.
 
I wonder if Apple will pay cash for their new headquarters or if they will leverage (i.e. take out a loan).

In my opinion, it would be smart to use a loan, but that is if the cost of borrowing is low and/or the use of cash will be used in higher percentage rate projects.
 
I'm guessing you don't understand the concept of the stock Market if you think the time to run is when a company starts handing out dividends.

More importantly I don't think many people have understood what Tony is saying. He is saying not that he thinks the company should give up all of it's cash but instead once you get beyond a certain level it is pointless having cash. Most fund managers want a roi and they are investing in the performance of the company not it's cash holdings. Cash especially right now makes literally nothing and there is an opportunity cost of holding cash.

Of course having a strategic reserve is great and clearly works for apple as can be seen in it's ability to invest but a strategic reserve of $65bn is only useful if you want to go on a huge buying spree of other companies in fact it's approx 20% of the Market cap and as such is just silly.

Surely you can see the pointlessness of holding so much cash by the fact that their reserves are higher than the combined Market caps of rim,nokia, htc et al.

Surely you can see if the company has enough cash to wake up tomorrow and buy them all up on a whim it's a little too much?

This is a nonissue, or the fantasy of market watchers stuck in conventional thinking mode. Apple's holding onto cash has not hindered it's research and development efforts or it's ability to bring new products to market. Nor has the company indulged in questionable acquisitions. The company may be too conservative here, playing it safe, but it is also a good strategy for now.
 
With all that wealth they could have actually made a move by shifting their desktop line towards the high end for the same price points or even releasing a low end mac mini for a lower price point. This would make the move towards buying a mac a bit more reasonable. Lets not forget that the current mac mini still comes with an intel Core 2 Duo from 2007 which by today's standards is archaic.
Of course apple has never been on the high end of technology. I remember the first mac looking a decade out of date compared to the original amiga back in 1985.:rolleyes:

All i'm trying to say is that apple could make an i3 based mac mini for 299 and satisfy alot of those wannabe mac users who'd otherwise not concider buying a mac. Apple would have a lower profit margin but they;d gain in userbase.

This would also attract developers to create better apps for the mac, an area in which the mac platform is currently far behind it's windows competition.
 
This is so cool. Apple see something they like and buy it out. It's shocking how much cash they have to throw away these days. I really hope this means better R and D.
 
From an investor point of view it could be frustrating. You are investing money in a company, and that company is just holding onto that money as cash. Most companies want to have some % of their expenses in cash for various uses. Having too much money can make investors upset.

But, Apple is not a standard company, so they can play by different rules in the stock market.

You don't really understand investment do you? Apple aren't "just holding onto that money as cash" -where "that money" is the stock in the company. Apple are though holding onto their profits as cash. And in an environment where banks are charging businesses whatever they want in interest for loans, Apple is being very very smart indeed to use its own cash reserves to lower its operating overhead. Any investor that gets "upset" with that strategy is an idiot.

As we learned from Etiquette of the Banker, The first rule of business is to protect your investment. Apple's investment is everything they develop, everything they design, everything they buy, everything they make, basically, everything they do.

So if they need a new technology, they don't have to think about whether they can afford it, or if their competition can afford to pay more. They have the liquid capital to just buy it - at any cost. That not only puts them ahead of the game in the technology stakes, it puts them ahead in every game, not least the future profits game - because if you beat the competition to a new technology, you gain first mover advantage, you force the competition to play catch-up, and rob them of sales and profits.

This strategy, as we've already seen several times, also makes that technology more expensive for the competition to buy - if indeed there's any capacity left in the system when Apple have bought it all up!

But that's all obvious as a result of watching what's actually happened, rather than reading financial pundits b1tching because they learned everything they know in the last century.

Finally, there's one other very important lesson to be learned here. Rule breakers usually appear in the form of start-ups. It's appropriate to be cautious about start-ups, they have no track record and we often don't understand what they're saying, never mind what they are doing, or if we even need what they're working on.

But, even though Apple still manages to behave like a start-up - internally, it's a very mature, and appropriately diversified company in all its operations. This is primarily why they are at the top of their game, as well as the World's second largest company. So, they're getting it right. Other companies should be seeking to emulate Apple in as many areas as is appropriate to their own operation. But to do that, they actually have to understand what it is that Apple is doing!

And as some people seem not to understand what $65bn represents, I thought I'd put it in perspective. It's nearly enough to buy Rimm, Nokia and Dell - outright!
 
With all that wealth they could have actually made a move by shifting their desktop line towards the high end for the same price points

What? I've read this 5 times now and it doesn't make any sense. Where is the market?

or even releasing a low end mac mini for a lower price point. This would make the move towards buying a mac a bit more reasonable. Lets not forget that the current mac mini still comes with an intel Core 2 Duo from 2007 which by today's standards is archaic.

So? It sells. It's also smaller than any other PC out there.

Of course apple has never been on the high end of technology. I remember the first mac looking a decade out of date compared to the original amiga back in 1985.:rolleyes:

I almost never accuse anyone of being a 'troll' - because, having met the little folk of Norway, I can see no resemblance. But apparently people on here get upset if their sanity is questioned. However, what are we to make of your comparison of the original Amiga with the Macintosh?

All i'm trying to say is that apple could make an i3 based mac mini for 299 and satisfy alot of those wannabe mac users who'd otherwise not concider buying a mac. Apple would have a lower profit margin but they;d gain in userbase.

And cannibalize their market, make less money and you a happy little bunny - because you'd be able to afford one!

This would also attract developers to create better apps for the mac, an area in which the mac platform is currently far behind it's windows competition.

Em, no. Not on any level is this true. Mac developers are currently as close to the top of the food chain as any software developers in the history of software development. Yes, this is no small part due to iOS, but that's because mobile is where all smart software focus is right now.
 
How in the world does suggesting they bring in billions of dollars and pay taxes on it on like some other companies do, "sound" like they don't otherwise contribute? We all contribute to the economy, but most of us also spend our money here in the US after paying taxes on it.

Now that you bring it up, Apple certainly seems to be more of an asset to the Chinese and Korean economies. Ten times as many people work in factories overseas, and billions of dollars are spent on Samsung, LG and other suppliers. What do they buy here? Land for their stores and data centers seems the major buying contribution.

Heck, even Starbucks employs five times as many people in the USA as Apple does. Apple is also infamous for being far less philanthropic than other companies, even making it difficult for non-profits to benefit from the App Store. They also spend relatively little on R&D or hiring engineers.

So, while I think they're an asset to the US, they're certainly nowhere near the level of what they could be. That's not being mean. It's just the way they are.

Okay, I'm curious. Bearing in mind that it isn't any business' duty to do anything other than survive and make money efficiently selling ethical legal products and services, whilst being a good employer, what precisely do you suggest Apple should do?

And the Starbucks statistic is rather silly. Starbucks is a low wage, labour intensive beverage operation employing 137,000 mainly part time staff globally. This is also the company that has over 11,000 outlets in the United States, but announced 900 store closures in the United States since 2008. Not doing as well as they might be are they?

By way of contrast, as of February 2011, Apple, a computer manufacturer, had opened over 300 stores worldwide, with 236 in the USA and haven't closed any. In total Apple employs 49,400 staff and is increasing that number all the time. Given these facts, how is Apple supposed to even come close to Starbucks in employment numbers?

The problem with statistics is that they are meaningless, especially when spewed out like vitriol to try to make a point - or to support a comparison between Apples and coffee. Did you even think before posting that?
 
I'm a stockholder as well, and I think it's a good thing for them to keep stockpiling money. They are only a couple of years away from being able to buy Microsoft if they want to. I'm not saying that they will buy Microsoft, but they have/will have enough cash to make acquisitions that will push Apple to $500 per share. It can also help them buy a competitor if they start getting too competitive.

You do realize that, the view many express here is that it is wise to buy a piece of paper that entitles you to absolutely nothing.

The fact is, there is only one reason investors buy a stock: cash payouts (dividends or stock buyback), either now or expected in the future. The only reason your Apple stock is worth something NOW is because someone thinks the stock is securing a nice payback to investors in the future.

This isn't my opinion-- this is Finance 101.
 
You do realize that, the view many express here is that it is wise to buy a piece of paper that entitles you to absolutely nothing.

The fact is, there is only one reason investors buy a stock: cash payouts (dividends or stock buyback), either now or expected in the future. The only reason your Apple stock is worth something NOW is because someone thinks the stock is securing a nice payback to investors in the future.

This isn't my opinion-- this is Finance 101.

:rolleyes:It's an undervalued stock which I own because I believe that it will reach $500 per share. When it does, I will have made a nice profit.

This isn't my opinion--This is Finance 101 :rolleyes:
 
I'm seeing some .. interesting ... ideas being put up for how Apple could/should use it's cash pile..

http://news.yahoo.com/four-ways-apple-could-spend-80-billion-151845193.html

1.Enter the TV Market
2.Take Control of Facebook
3.Acquire Hulu or Netflix
4.Launch a Full-Fledged Video Game Division

:rolleyes:

Others suggest stock buy backs or dividends..

:rolleyes:

All of these, while ok ideas I suppose, are short term ideas. Transportation and energy costs will only go up in the next 20+ years. Apple should buy up some land, and use that land to build some state of the art manufacturing facilities in north america and other strategic locations to limit transportation/distribution costs, as well as molten salt solar energy generation facilities to power them. They should also acquire mining/mineral rights in newly discovered areas rich w/ the materials that will be required to manufacture their goods moving forward.

People are thinking way too small about this. Think bigger. Think different.
 
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