Here's what I think, I was watching the business news this morning and they're like "Apple has to do something with it or the government might get out the stick."
We could see a dividend, it seems unwise unless the government is going to force them to do something with the cash or have to pay more taxes, or it starts earning negative interest (just what bank has Apple's money anyway?)
We could see the stock split, but it ultimately accomplishes nothing except making it more affordable for individual investors.
We could see AAPL become AAPL.A and AAPL.B ala Berkshire Hathaway, and the B stock splitting or pay out smaller dividends. (BRK.A's stock is over 100K/share while BRK.B is about 80.) I'm not sure if this is any better than just splitting the stock.
What makes the most amount of sense for Apple is to make acquisitions. Buying AMD would make more sense if their Intel relationship is on the rocks, or if they want to rescue AMD from mismanagement, put "Apple designed" graphics chips in their own devices and APU's in macbook air's. I don't think this would happen because it would remove AMD as a competitor, as I don't think Apple would make chips for anyone else, leaving Intel with a monopoly that ultimately raises the prices of all PC's. Buying Qualcomm or broadcom would have the same problem.
Or Apple could just load all their money into a rocket and launch it into deepspace
I was going to suggest something along the lines off buying the CA state government by paying off its debt - but $100 billion would only be about 1/20th of the state debt.
what they are really going to do it build a space craft to leave the planet in search of another to colonize - and the announcement is to start the process of deciding who gets to go.
the reason they are doing this is because they know that civilization will end in December this year - it is the only explanation as to why the new iPad is called "the new iPad" instead of the iPad 3 or iPad HD or iPad RD (retina Display) - since it will be the last iPad produced on this planet.
Those quotes aren't mine, can you please fix your post and credit them to whoever made them??
Sorry. Fixed.
Quote:
Originally Posted by Shaun, UK
I hope they don't announce a dividend and give it all away to already wealthy bankers.
Use it for major acquisitions to help their customers: Sony, Sharp, Samsung, Adobe, Twitter, Cable Companies, Become a MVNO, etc.
I think most of the cash is held outside the US so they would have to buy non US companies to avoid tax.
This has certainly perked up my Monday morning lol
Sorry, but a dividend goes to ALL investors - not just the wealthy ones. Besides. The money belongs to the investors so why shouldn't they be entitled to it?
Ultimately, Apple's job is to maximize shareholder returns. For all shareholders. If Apple thinks they can do that by buying a company, then that's what they should do. If they don't have anything that's worth more than distributing the money to the shareholders, that's what they should do.
Of the things you suggested, only Adobe makes much sense. Buying a stodgy, old, existing company makes zero sense. It would cost Apple more to 'fix' Sharp or Sony than it would cost to build their own products.
Personally, I would like to see Apple create another new revolution. While I don't personally see an Apple TV set as the solution, that has the potential to create another multi-tens of billions of dollars market for Apple. Apple has shown that they have the ability to create value in seemingly mature markets.
Another option that makes sense to me is someone's idea of investing many billions of dollars into the energy market. Renewable and alternative energies are at the point where they're very close to being competitive. The cost renewables continues to drop at significant rates and there's every reason to believe that the cost will be lower than conventional fuels at some time. Apple could revolutionize THAT industry, make a lot of money, and do some great things for our economy.
But, in the end, it's Apple's decision what to do.
Quote:
Originally Posted by gijoeinla
I disagree with your arguments regarding my post.
1). Is it not true that THE hottest topic in the analytical world is Apple is coming forward with a brand new connected device for the home by the end of the year. Is it not true that there has been a flood of information "claiming" Apple is having trouble getting content providers on board with "a new service" Apple plans to provide with this device? Notice I'm not using the word TV.
Just answer...True?
2). Content is King. Remember that statement. In certain circles here in LA it's pretty likely Apple itself is going to start if not already acquiring content. You don't have access to that information - I do.
3) Why o why would Apple NOT make a play into Netflix -- it's for the CONTENT deals Doh! It's not the subs their looking for...Gee. Apple got 300 million SUBS of it's own, duh.
4) If Apple can't get ANY major content companies to open up a totally new CONTENT delivery stream for their "new device" then WTF are they gonna offer? Only APP content? Yea right.
5) Um, they already ARE competitors in many revenue arenas against people like ATT and VERIZON, DirecTV, Dish and so on.... it's called iTunes and it involves CONTENT distribution.
Apple MUST make a move in this arena, and soon if it's gonna seriously launch a new device that is supposed to "remake the TV experience". You can't do that by adopting OLD strategies.
So chill.
All sheer speculation - and it completely ignores what I said.
Quote:
Originally Posted by syracuse
jragosta, is at it again...
You do realize that if a stock didn't drop the amount of the dividend after ex-date their would be an ARBITRAGE that would be exploited by hedge funds?
Come on guy stop being so pedantic, and STOP with the Microsoft comparisons.
APPLE IS NOT MICROSOFT
It doesn't matter if Apple is Microsoft. A bunch of people (I don't know if it was you) were arguing that a massive one-time dividend would increase the share value. I was pointing out that that was wrong. A massive one-time dividend would DECREASE the share value by the amount of the dividend. Sounds like you came around to agreeing with me.
For an on-going dividend, there is absolutely no evidence that it would increase share value in the long run and some evidence that it would not. I'm simply asking people advocating that to provide evidence of their claims. After all, don't you think it's reasonable that if you're going to suggest spending many billions of dollars that you should need to show that it will accomplish the objective?
Now, I'm not saying that Apple won't issue a dividend. I don't have a crystal ball. I am, however, saying that if they do so, I will be disappointed for two reasons:
1. Evidence and history shows that buying back stock has a greater value without creating a taxable event for the shareholders.
And, more importantly:
2. Issuing a dividend suggests that Apple has reached the point that they no longer believe that they can do more with my money than I can. They have a solid history (at least 15 years worth) of showing the ability to turn everything they touch into gold. I would rather see them reinvent more industries or get into future growth markets than simply say "we don't have anywhere reasonable to invest this money, so we're turning it back to the shareholders".
Then forget AAPL and MSFT. Provide evidence that a dividend increases share price. There is no such evidence.
Irrelevant-it doesn't matter why they did it. The fact is that Microsoft's large one-time dividend decreased share price by roughly the amount of the dividend and the same has historically been true.
For example, look at dividends issued for mutual finds. Invariably, the mutual fund drops by roughly the amount of the dividend on the ex-dividend date.
"On the ex-dividend date, the share price will open at the previous day closing price minus the amount of the dividend."
But feel free to provide evidence to support your claim that a dividend would raise the share price.
Historically, you're wrong. Almost every time there has been a large one-time dividend (either mutual funds or stocks), the share price dropped by roughly the amount of the dividend -and that's exactly what basic principles would predict. Please show a single example where a large one-time dividend increased share price. There aren't any.
As for a steady dividend, there is also no evidence that it would increase dividends. In fact, if you look at historical values, dividend paying stocks tend to grow more slowly than non-dividend stocks because a company generally starts issuing a dividend when it is no longer growing. (There are exceptions. First, dividends tend to increase share value in emerging markets. There are studies in Pakistan and early in China's market history which confirm this. But the effect fails in developed markets. Second, if the company is a slow-growing, very mature stock, a dividend can have a positive effect, but that doesn't apply to Apple).
That's not to say that it would happen in this case, but there is absolutely no evidence that issuing a dividend would increase share price.
That hasn't happened historically. Investors (particularly institutional ones) are not so easily hoodwinked as you think.
Again, there's no historical evidence to support that claim.
I can't prove what would happen in the case of Apple. What I can show is that every time there's a large dividend, the share price drops on the ex-dividend date. That's true whether it's a stock or a mutual fund.
Possibly, but the point is that the TOTAL tax Apple would pay on repatriating earnings would not be any greater than if the money were earned in the U.S.
Again, you're wrong. Share buybacks DO increase the average share price - because there are fewer shares in circulation. It's simple math.
Or perhaps you're arguing that the multiple that investors use would be LOWER if Apple buys back shares? That's completely illogical. You're arguing that the investors would pay a GREATER multiple of Apple pays a dividend, leaving the same number of shares in circulation, but a lower multiple if they're taking share out of circulation. That just isn't a rational argument.
Again, forget Microsoft. Look up any other company that did a large one-time distribution. Or look up any mutual fund which did a large distribution. The share price drops by the amount of the distribution on the ex-dividend date.
Good thing no one would be investing based solely on your opinion. That would be completely irrational. Why in the world would the share price go up 15% if they announce an on-going 2% dividend? Furthermore, as pointed out above, there's no evidence that initiating a dividend causes ANY long term share price effect. But feel free to try to support your claim.
You should learn how to quote properly. Most of them here are wrong. Some are mine.
At any rate, there is no proof for any of what you say, just opinions. I've seen stock prices move up and down over the almost 50 years I've been investing. The reasons vary, and many of them are not rational. I've seen stocks move up because of a dividend, and down.
The problem with your argument is that you don't understand how this works for different companies. I'm not surprised, because it seems as though most financial people don't either.
An example of that is your error about taxes. From the NY Times article about this, this morning:
Quote:
\tWhile Apple ended last year with a cash balance of $97.6 billion, it cannot easily gain access to most of that for a dividend because roughly 66 percent of the money is held by its foreign subsidiaries. To bring that cash back to the United States, Apple would have to pay hefty repatriation taxes, very likely more than 30 percent.
I do want to add that it's possible that Apple's stock could fall a bit, at first, if a large one time disbursement is given. Your misunderstanding of what I said is that you didn't take into account that I said that the stock would likely recover and go on the do what it would have done anyway.
Apple can give away all the income/profits above $50 billion (or some number) as dividends and share holders will still make out. Keep $50B in the bank for purchases of companies, patents, and developing crazy awesome screens and tech for new products.
You should learn how to quote properly. Most of them here are wrong. Some are mine.
At any rate, there is no proof for any of what you say, just opinions. I've seen stock prices move up and down over the almost 50 years I've been investing. The reasons vary, and many of them are not rational. I've seen stocks move up because of a dividend, and down.
The problem with your argument is that you don't understand how this works for different companies. I'm not surprised, because it seems as though most financial people don't either.
An example of that is your error about taxes. From the NY Times article about this, this morning:
I can't find a link, but, AIR, Apple said that they have paid taxes or set aside money to pay taxes on some of their overseas income.
The buyback portion of this isn't as bad as I thought it could be. They ate mostly accounting for share growth due to compensation. So it's not an unneeded attempt to increase equity per share. It's an attempt to maintain equity per share.
Weren't you the one that said the stock was going to drop if they didn't announce a dividend at the previous shareholder's meeting?
Tim Cook, at the shareholder's meeting, pretty much telegraphed to the market that they were going to issue a dividend and stock buyback...
Tim Cook: “On cash, we’ve been thinking about cash very deeply, the board has been looking into what is in shareholders’ best interest … We’ve spent billions on … Supply chain, retail, etc …. My message there is that the board and the management team are thinking about this very deeply … And we will do what we think is in the best interest of shareholders."
In year's past they were very dismissive about discussing uses for their growing cash balance.
Tim Cook, at the shareholder's meeting, pretty much telegraphed to the market that they were going to issue a dividend and stock buyback...
Tim Cook: “On cash, we’ve been thinking about cash very deeply, the board has been looking into what is in shareholders’ best interest … We’ve spent billions on … Supply chain, retail, etc …. My message there is that the board and the management team are thinking about this very deeply … And we will do what we think is in the best interest of shareholders."
In year's past they were very dismissive about discussing uses for their growing cash balance.
Still, it was not an announcement or commitment, taking anything short of that is goal post moving. It's hard to get anything more non-committal in those comments.
Still, it was not an announcement or commitment, taking anything short of that is goal post moving. It's hard to get anything more non-committal in those comments.
Do you think investors were thinking a dividend/buyback was coming OR do you think it was a complete shock to the market?
It certainly wasn't a shock to me. I'm not moving any goal posts, when Cook made those comments they were different from the the past.
Sorry, but a dividend goes to ALL investors - not just the wealthy ones. Besides. The money belongs to the investors so why shouldn't they be entitled to it?
Comments
Use it for major acquisitions to help their customers: Sony, Sharp, Samsung, Adobe, Twitter, Cable Companies, Become a MVNO, etc.
I think most of the cash is held outside the US so they would have to buy non US companies to avoid tax.
This has certainly perked up my Monday morning lol
We could see a dividend, it seems unwise unless the government is going to force them to do something with the cash or have to pay more taxes, or it starts earning negative interest (just what bank has Apple's money anyway?)
We could see the stock split, but it ultimately accomplishes nothing except making it more affordable for individual investors.
We could see AAPL become AAPL.A and AAPL.B ala Berkshire Hathaway, and the B stock splitting or pay out smaller dividends. (BRK.A's stock is over 100K/share while BRK.B is about 80.) I'm not sure if this is any better than just splitting the stock.
What makes the most amount of sense for Apple is to make acquisitions. Buying AMD would make more sense if their Intel relationship is on the rocks, or if they want to rescue AMD from mismanagement, put "Apple designed" graphics chips in their own devices and APU's in macbook air's. I don't think this would happen because it would remove AMD as a competitor, as I don't think Apple would make chips for anyone else, leaving Intel with a monopoly that ultimately raises the prices of all PC's. Buying Qualcomm or broadcom would have the same problem.
Or Apple could just load all their money into a rocket and launch it into deepspace
what they are really going to do it build a space craft to leave the planet in search of another to colonize - and the announcement is to start the process of deciding who gets to go.
the reason they are doing this is because they know that civilization will end in December this year - it is the only explanation as to why the new iPad is called "the new iPad" instead of the iPad 3 or iPad HD or iPad RD (retina Display) - since it will be the last iPad produced on this planet.
Jragosta-
Those quotes aren't mine, can you please fix your post and credit them to whoever made them??
Sorry. Fixed.
I hope they don't announce a dividend and give it all away to already wealthy bankers.
Use it for major acquisitions to help their customers: Sony, Sharp, Samsung, Adobe, Twitter, Cable Companies, Become a MVNO, etc.
I think most of the cash is held outside the US so they would have to buy non US companies to avoid tax.
This has certainly perked up my Monday morning lol
Sorry, but a dividend goes to ALL investors - not just the wealthy ones. Besides. The money belongs to the investors so why shouldn't they be entitled to it?
Ultimately, Apple's job is to maximize shareholder returns. For all shareholders. If Apple thinks they can do that by buying a company, then that's what they should do. If they don't have anything that's worth more than distributing the money to the shareholders, that's what they should do.
Of the things you suggested, only Adobe makes much sense. Buying a stodgy, old, existing company makes zero sense. It would cost Apple more to 'fix' Sharp or Sony than it would cost to build their own products.
Personally, I would like to see Apple create another new revolution. While I don't personally see an Apple TV set as the solution, that has the potential to create another multi-tens of billions of dollars market for Apple. Apple has shown that they have the ability to create value in seemingly mature markets.
Another option that makes sense to me is someone's idea of investing many billions of dollars into the energy market. Renewable and alternative energies are at the point where they're very close to being competitive. The cost renewables continues to drop at significant rates and there's every reason to believe that the cost will be lower than conventional fuels at some time. Apple could revolutionize THAT industry, make a lot of money, and do some great things for our economy.
But, in the end, it's Apple's decision what to do.
I disagree with your arguments regarding my post.
1). Is it not true that THE hottest topic in the analytical world is Apple is coming forward with a brand new connected device for the home by the end of the year. Is it not true that there has been a flood of information "claiming" Apple is having trouble getting content providers on board with "a new service" Apple plans to provide with this device? Notice I'm not using the word TV.
Just answer...True?
2). Content is King. Remember that statement. In certain circles here in LA it's pretty likely Apple itself is going to start if not already acquiring content. You don't have access to that information - I do.
3) Why o why would Apple NOT make a play into Netflix -- it's for the CONTENT deals Doh! It's not the subs their looking for...Gee. Apple got 300 million SUBS of it's own, duh.
4) If Apple can't get ANY major content companies to open up a totally new CONTENT delivery stream for their "new device" then WTF are they gonna offer? Only APP content? Yea right.
5) Um, they already ARE competitors in many revenue arenas against people like ATT and VERIZON, DirecTV, Dish and so on.... it's called iTunes and it involves CONTENT distribution.
Apple MUST make a move in this arena, and soon if it's gonna seriously launch a new device that is supposed to "remake the TV experience". You can't do that by adopting OLD strategies.
So chill.
All sheer speculation - and it completely ignores what I said.
jragosta, is at it again...
You do realize that if a stock didn't drop the amount of the dividend after ex-date their would be an ARBITRAGE that would be exploited by hedge funds?
Come on guy stop being so pedantic, and STOP with the Microsoft comparisons.
APPLE IS NOT MICROSOFT
It doesn't matter if Apple is Microsoft. A bunch of people (I don't know if it was you) were arguing that a massive one-time dividend would increase the share value. I was pointing out that that was wrong. A massive one-time dividend would DECREASE the share value by the amount of the dividend. Sounds like you came around to agreeing with me.
For an on-going dividend, there is absolutely no evidence that it would increase share value in the long run and some evidence that it would not. I'm simply asking people advocating that to provide evidence of their claims. After all, don't you think it's reasonable that if you're going to suggest spending many billions of dollars that you should need to show that it will accomplish the objective?
Now, I'm not saying that Apple won't issue a dividend. I don't have a crystal ball. I am, however, saying that if they do so, I will be disappointed for two reasons:
1. Evidence and history shows that buying back stock has a greater value without creating a taxable event for the shareholders.
And, more importantly:
2. Issuing a dividend suggests that Apple has reached the point that they no longer believe that they can do more with my money than I can. They have a solid history (at least 15 years worth) of showing the ability to turn everything they touch into gold. I would rather see them reinvent more industries or get into future growth markets than simply say "we don't have anywhere reasonable to invest this money, so we're turning it back to the shareholders".
Trying to come at this from a different direction?
Where does Apple see itself as a company in 2015? In 2025?
What does Apple need to do to get to where they want to be?
What does Apple need more than cash?
What can Apple buy that doesn't involve a lot of regulations or antitrust litigation?
Does Apple care what Wall Street thinks or even the large or small investor?
Cash provides opportunity -- is there anything better than cash to provide the same opportunity?
Cash provides leverage ?- is there anything they can do with the cash to gain more leverage?
As anyone here, I can think of lots of things that I would like to see them do? However, what should Apple do that's good for Apple?
Then forget AAPL and MSFT. Provide evidence that a dividend increases share price. There is no such evidence.
Irrelevant-it doesn't matter why they did it. The fact is that Microsoft's large one-time dividend decreased share price by roughly the amount of the dividend and the same has historically been true.
For example, look at dividends issued for mutual finds. Invariably, the mutual fund drops by roughly the amount of the dividend on the ex-dividend date.
It is explained here:
http://www.ehow.com/info_8159878_eff...are-price.html
"On the ex-dividend date, the share price will open at the previous day closing price minus the amount of the dividend."
But feel free to provide evidence to support your claim that a dividend would raise the share price.
Historically, you're wrong. Almost every time there has been a large one-time dividend (either mutual funds or stocks), the share price dropped by roughly the amount of the dividend -and that's exactly what basic principles would predict. Please show a single example where a large one-time dividend increased share price. There aren't any.
As for a steady dividend, there is also no evidence that it would increase dividends. In fact, if you look at historical values, dividend paying stocks tend to grow more slowly than non-dividend stocks because a company generally starts issuing a dividend when it is no longer growing. (There are exceptions. First, dividends tend to increase share value in emerging markets. There are studies in Pakistan and early in China's market history which confirm this. But the effect fails in developed markets. Second, if the company is a slow-growing, very mature stock, a dividend can have a positive effect, but that doesn't apply to Apple).
That's not to say that it would happen in this case, but there is absolutely no evidence that issuing a dividend would increase share price.
That hasn't happened historically. Investors (particularly institutional ones) are not so easily hoodwinked as you think.
Again, there's no historical evidence to support that claim.
I can't prove what would happen in the case of Apple. What I can show is that every time there's a large dividend, the share price drops on the ex-dividend date. That's true whether it's a stock or a mutual fund.
Possibly, but the point is that the TOTAL tax Apple would pay on repatriating earnings would not be any greater than if the money were earned in the U.S.
Again, you're wrong. Share buybacks DO increase the average share price - because there are fewer shares in circulation. It's simple math.
Or perhaps you're arguing that the multiple that investors use would be LOWER if Apple buys back shares? That's completely illogical. You're arguing that the investors would pay a GREATER multiple of Apple pays a dividend, leaving the same number of shares in circulation, but a lower multiple if they're taking share out of circulation. That just isn't a rational argument.
Again, forget Microsoft. Look up any other company that did a large one-time distribution. Or look up any mutual fund which did a large distribution. The share price drops by the amount of the distribution on the ex-dividend date.
Good thing no one would be investing based solely on your opinion. That would be completely irrational. Why in the world would the share price go up 15% if they announce an on-going 2% dividend? Furthermore, as pointed out above, there's no evidence that initiating a dividend causes ANY long term share price effect. But feel free to try to support your claim.
You should learn how to quote properly. Most of them here are wrong. Some are mine.
At any rate, there is no proof for any of what you say, just opinions. I've seen stock prices move up and down over the almost 50 years I've been investing. The reasons vary, and many of them are not rational. I've seen stocks move up because of a dividend, and down.
The problem with your argument is that you don't understand how this works for different companies. I'm not surprised, because it seems as though most financial people don't either.
An example of that is your error about taxes. From the NY Times article about this, this morning:
\tWhile Apple ended last year with a cash balance of $97.6 billion, it cannot easily gain access to most of that for a dividend because roughly 66 percent of the money is held by its foreign subsidiaries. To bring that cash back to the United States, Apple would have to pay hefty repatriation taxes, very likely more than 30 percent.
I do want to add that it's possible that Apple's stock could fall a bit, at first, if a large one time disbursement is given. Your misunderstanding of what I said is that you didn't take into account that I said that the stock would likely recover and go on the do what it would have done anyway.
You should learn how to quote properly. Most of them here are wrong. Some are mine.
At any rate, there is no proof for any of what you say, just opinions. I've seen stock prices move up and down over the almost 50 years I've been investing. The reasons vary, and many of them are not rational. I've seen stocks move up because of a dividend, and down.
The problem with your argument is that you don't understand how this works for different companies. I'm not surprised, because it seems as though most financial people don't either.
An example of that is your error about taxes. From the NY Times article about this, this morning:
I can't find a link, but, AIR, Apple said that they have paid taxes or set aside money to pay taxes on some of their overseas income.
Trading suspended on a AAPL at $599 and change.
I can't find a link, but, AIR, Apple said that they have paid taxes or set aside money to pay taxes on some of their overseas income.
Trading suspended on a AAPL at $599 and change.
We'll find out shortly. The dividend will disappoint some. The stock is up to $600 in Pre trading, but if it's too disappointing, it may drop.
Weren't you the one that said the stock was going to drop if they didn't announce a dividend at the previous shareholder's meeting?
Tim Cook, at the shareholder's meeting, pretty much telegraphed to the market that they were going to issue a dividend and stock buyback...
Tim Cook: “On cash, we’ve been thinking about cash very deeply, the board has been looking into what is in shareholders’ best interest … We’ve spent billions on … Supply chain, retail, etc …. My message there is that the board and the management team are thinking about this very deeply … And we will do what we think is in the best interest of shareholders."
In year's past they were very dismissive about discussing uses for their growing cash balance.
Tim Cook, at the shareholder's meeting, pretty much telegraphed to the market that they were going to issue a dividend and stock buyback...
Tim Cook: “On cash, we’ve been thinking about cash very deeply, the board has been looking into what is in shareholders’ best interest … We’ve spent billions on … Supply chain, retail, etc …. My message there is that the board and the management team are thinking about this very deeply … And we will do what we think is in the best interest of shareholders."
In year's past they were very dismissive about discussing uses for their growing cash balance.
Still, it was not an announcement or commitment, taking anything short of that is goal post moving. It's hard to get anything more non-committal in those comments.
Still, it was not an announcement or commitment, taking anything short of that is goal post moving. It's hard to get anything more non-committal in those comments.
Do you think investors were thinking a dividend/buyback was coming OR do you think it was a complete shock to the market?
It certainly wasn't a shock to me. I'm not moving any goal posts, when Cook made those comments they were different from the the past.
Sometimes you have to read between the lines Jeff
http://online.wsj.com/article/SB1000...LEFTTopStories
Sorry, but a dividend goes to ALL investors - not just the wealthy ones. Besides. The money belongs to the investors so why shouldn't they be entitled to it?
Let the pillaging and looting of Apple begin.