Apple to spend $45B over 3 years on dividend & share repurchase program

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Comments

  • melgrossmelgross Posts: 28,807member, moderator
    Quote:
    Originally Posted by KDMeister View Post


    I would rather see Apple stick to their guns despite all the pressure from the investor community. I'd rather see Apple shares go up because of organic growth and not because of dividends. Buybacks are the biggest waste of money - the money will go into thin air when the stock price comes down at some point. I'd rather see Apple end world hunger than pay people who already have a lot of cash to spare. After all they have money to spend on Apple products and Apple shares.



    Unfortunately, world hunger is due to incompetence and corruption in the countries that are most affected. Despite many billions poured into these countries over the decades, little has changed. Selling all of Apple wouldn't change it much either.
  • dick applebaumdick applebaum Posts: 11,712member, moderator
    Quote:
    Originally Posted by melgross View Post


    They made the point, several times that repatriation would be too expensive, and pointed the finger at the government for that. Everything they're doing is from domestic cash and holdings.



    Can Apple make foreign purchases, like the Israeli company, from foreign cash -- without repatriating the cash?
  • melgrossmelgross Posts: 28,807member, moderator
    Quote:
    Originally Posted by malax View Post


    Right. Apple is on the hook to give away lots of (well earned) shares of AAPL to employees and executives. If they didn't do a stock buy-back these would be created out of thin air (essentially printing money). With a buy-back they are essentially buying the shares they are giving away from sellers rather than taking them from all investors (through dilution).



    That's right. Tech companies have traditionally given good share plans to employees as shares increased substantially in value. Some companies, such as MS, have made dozens of people very rich in the company. While MS's shares haven't gained in a long time, Apple's continue to do so. But issuing new stock constantly, as Apple has done over the years, leads to a diminishing of equity per share.



    Apple really doesn't need to worry about that as equity per share is increasing at high rates. But they have said that they consulted with shareholders about this, and the program they announced it the result of those considerations, and their plans for the cash.
  • melgrossmelgross Posts: 28,807member, moderator
    Quote:
    Originally Posted by Dick Applebaum View Post


    Can Apple make foreign purchases, like the Israeli company, from foreign cash -- without repatriating the cash?



    They can use that cash as they see fit. The purchase price for a foreign company goes wherever the shares are, basically. Foreign cash can be used as any other. I don't know how Apple does it though.
  • thataveragejoethataveragejoe Posts: 830member
    Quote:
    Originally Posted by Dick Applebaum View Post


    Yeah, all of this with domestic cash... waiting for a better tax environment to repatriate foreign cash...



    They have a very long wait then.
  • anantksundaramanantksundaram Posts: 17,398member
    Quote:
    Originally Posted by Dick Applebaum View Post


    Can Apple make foreign purchases, like the Israeli company, from foreign cash -- without repatriating the cash?



    Probably. Microsoft used that strategy with Skype.
  • jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by Dick Applebaum View Post


    Can Apple make foreign purchases, like the Israeli company, from foreign cash -- without repatriating the cash?



    Yes and no.



    The foreign subsidiary can buy shares if it wishes and the shares remain in the hands of the foreign subsidiary.



    However, Apple wants to use those shares to reward employees who are mostly U.S. citizens. So the shares would need to be moved back to the U.S., incurring taxation, before they could be distributed to the employees so little would be gained.
  • anantksundaramanantksundaram Posts: 17,398member
    Quote:
    Originally Posted by thataveragejoe View Post


    They have a very long wait then.



    Not necessarily. I would not be surprised if some type of "one time" tax reduction/amnesty is allowed on repatriated funds, soon after the 2012 elections (believe it or not, there's bipartisan support for something like this).



    Such a "one time" tax holiday has happened a couple of times before.....
  • shaun, ukshaun, uk Posts: 1,050member
    1.8% annual return on your investment.



    Not sure Wall Street is going to be too happy with that.
  • melgrossmelgross Posts: 28,807member, moderator
    Quote:
    Originally Posted by anantksundaram View Post


    Not necessarily. I would not be surprised if some type of "one time" tax reduction/amnesty is allowed on repatriated funds, soon after the 2012 elections (believe it or not, there's bipartisan support for something like this).



    Such a "one time" tax holiday has happened a couple of times before.....



    I expect something similar.
  • melgrossmelgross Posts: 28,807member, moderator
    Quote:
    Originally Posted by Shaun, UK View Post


    1.8% annual return on your investment.



    Not sure Wall Street is going to be too happy with that.



    It's actually not bad for tech companies. I don't remember what the average for them is, but I don't think it's far off.



    Apple's up about $7.50 now.
  • nofeernofeer Posts: 2,422member
    found some answers to my questions



    how do investors benefit with a stock buy back



    http://beginnersinvest.about.com/od/.../aa091806a.htm
  • thataveragejoethataveragejoe Posts: 830member
    Quote:
    Originally Posted by anantksundaram View Post


    Not necessarily. I would not be surprised if some type of "one time" tax reduction/amnesty is allowed on repatriated funds, soon after the 2012 elections (believe it or not, there's bipartisan support for something like this).



    Such a "one time" tax holiday has happened a couple of times before.....



    It has happened before, but given the gridlock in congress, and massive deficits the US has, to get anything done seems a long ways off. I could careless about politics, but I doubt a change of the guard is coming in November for better or worse. Funny how everyone wants to avoid paying taxes, even the richest company in the world.
  • nofeernofeer Posts: 2,422member
    Quote:
    Originally Posted by Shaun, UK View Post


    1.8% annual return on your investment.



    Not sure Wall Street is going to be too happy with that.



    but they are doing both dividends AND repurchase see my link



    http://beginnersinvest.about.com/od/.../aa091806a.htm
  • dick applebaumdick applebaum Posts: 11,712member, moderator
    Quote:
    Originally Posted by anantksundaram View Post


    Not necessarily. I would not be surprised if some type of "one time" tax reduction/amnesty is allowed on repatriated funds, soon after the 2012 elections (believe it or not, there's bipartisan support for something like this).



    Such a "one time" tax holiday has happened a couple of times before.....



    Quote:
    Originally Posted by melgross View Post


    I expect something similar.



    Me too -- there are a few US companies with large foreign cash holdings who, with Apple, are lobbying for a tax holiday.
  • anantksundaramanantksundaram Posts: 17,398member
    Quote:
    Originally Posted by thataveragejoe View Post


    It has happened before, but given the gridlock in congress, and massive deficits the US has, to get anything done seems a long ways off. I could careless about politics, but I doubt a change of the guard is coming in November for better or worse. Funny how everyone wants to avoid paying taxes, even the richest company in the world.



    Actually, it helps reduce the deficit: a smaller percentage of repatriated funds is better for the treasury than 0% of funds sitting abroad!



    Congress can't force companies to bring their money back to the US.
  • anantksundaramanantksundaram Posts: 17,398member
    Quote:
    Originally Posted by Shaun, UK View Post


    1.8% annual return on your investment.



    Not sure Wall Street is going to be too happy with that.



    Shareholder Return = % Capital Gains + % Dividend Yield.



    Wall Street is very happy with Apple's return, thank you.
  • mactelmactel Posts: 1,275member
    Perfect! That's what everyone expected they at least should do. In 3 years they can make-up that $45 billion.
  • jannewmxjannewmx Posts: 19member
    Per Zerohedge, "Apple admits it has spoken to Congress and the administration about tax issues relating to cash repatriation.". I hope Apple gets some tax breaks. It just isn't fair to pay taxes when they are giving out dividends, money which will pump up the economy or the stock market.
  • shaun, ukshaun, uk Posts: 1,050member
    Quote:
    Originally Posted by melgross View Post


    Apple's up about $7.50 now.



    What are you quoting ?
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