Notes of interest from Apple's dividend & stock buyback conference call

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Comments

  • digitalclipsdigitalclips Posts: 15,766member
    Quote:
    Originally Posted by jameskatt2 View Post


    The buyback and dividends are a substantial loss of money for Apple. Losing $45 BILLION over 3 years is NOT a "toe in the water" move.



    This leaves Apple only $65 BILLION left, with almost all of it being trapped outside the U.S.



    This gives Apple less flexibility in aggressively buying up components to keep its monopsony that crushes its competitors.



    Apple's Cash Hoard is a weapon. Steve Jobs would have kept this weapon. Steve noted that companies that give out dividends are at the end of their growth period - this includes companies like Microsoft, whose stock has been flat for the past decade.



    Weakening Apple makes me unhappy. What the buyback and dividends do is make it much more difficult for Apple to become a trillion dollar company.



    What the buyback and dividends do is to make Apple a much more fragile company, whose market cap depends on the psychological whims of pundits.





    I don't like this at all as an Apple shareholder.



    Regarding your comment "This gives Apple less flexibility in aggressively buying up components to keep its monopsony that crushes its competitor"



    What stops Apple using the money that is oversees to purchase parts in oversees markets? What percentage of parts that Apple want are sourced in the USA?



    Edit: I see Soli already made this point ...
  • digitalclipsdigitalclips Posts: 15,766member
    With a dividend I can now see why a stock split wasn't done! It presumably lessens the chances of one in the future. I guess it was a pipe dream I had that AAPL would go 5:1 and pay a dividend
  • godzillagodzilla Posts: 156member
    Crazy news! As a shareholder, and one that wants as much incentive to stay in AAPL for the long haul, it's a celebratory moment.



    At the same time, I need to digest it, coming from Apple. I have faith that the company is in good hands, namely with Tim and the immediate Executive Team, and they're doing the best thing here.



    If Apple accumulates too much cash, it can become a liability. Who knows whether the Govt's or anything would want to stick their noses in it, etc. With the incredible future growth, they need to unload a little, and the shareholders deserve it.



    As for AAPL stock, it's got even bigger wings now.
  • orthorimorthorim Posts: 136member
    Quote:
    Originally Posted by Blastdoor View Post


    I suspect that the corporate tax situation won't be resolved until sometime after this year's election.



    I hope that the resolution ends up being something better than just a massive giveaway to corporations. Maybe combine a one time "holiday" that cuts the tax in half for repatriated profits over the course of the next year with a longer term resolution that ends this weird situation where those overseas profits aren't taxed until repatriated (that is, tax them immediately, and at the full existing rate).



    The only way you're going to convince anyone, corporation or otherwise, to move money to the USA is if there's an incentive. Threats have very little effect on a multi-national - if they wanted to they could move their HQ to anywhere in the world without losing a beat.



    So if you move the money back and you lose 10% to taxes - whoops $6.5Bn in Apple's case - well then what's the benefit? There better be one, and it better not be "we will buy drones and kill people in Afghanistan" because that doesn't help anyone. Or "we'll build a massive data center to spy on each and every American"... (see Wired news story 3/2012)...



    A colleague of mine once remarked "giving money to the government is like giving car keys and alcohol to a teenager" and more and more it looks like a pretty accurate description to me. US government spending is out of control, not helping Americans, and wasting $Bns on marginal causes.
  • orthorimorthorim Posts: 136member
    Anyway about the dividend: I don't know if this is the best the company can do with its cash but stock buyback is pretty much guaranteed to lift the stock price so as a shareholder I can't really argue with is... $1000 here we come...
  • macky the mackymacky the macky Posts: 4,623member
    Quote:
    Originally Posted by Rogifan View Post


    Tim just said on the call that Apple had a record weekend. Wouldn't supply any iPad numbers of course but he wouldn't throw out the word "record" if sales were soft.



    Uh, it could be a new "soft" record.



    But we all know THAT ain't the case.
  • macky the mackymacky the macky Posts: 4,623member
    Quote:
    Originally Posted by orthorim View Post


    The only way you're going to convince anyone, corporation or otherwise, to move money to the USA is if there's an incentive. Threats have very little effect on a multi-national - if they wanted to they could move their HQ to anywhere in the world without losing a beat.



    So if you move the money back and you lose 10% to taxes - whoops $6.5Bn in Apple's case - well then what's the benefit?



    I think the number is more like 35% taxes to bring the money back.
  • sunilramansunilraman Posts: 8,133member
    Quote:
    Originally Posted by anantksundaram View Post


    None of Cook's RSU's will get dividends, at his request.



    Interesting, and unusual. Nice move!



    Cook is putting his money where his confidence is, i.e., he wants to clearly try and signal that he expects Apple will continue to be a "growth" stock.



    Interesting that the mainstream media is not picking up on this yet, from my cursory browsing.



    I still don't get it though, why would Apple need to "broaden their shareholder base"? What's changed? Why give away 45 billion dollars? That sounds like charity.
  • sunilramansunilraman Posts: 8,133member
    Quote:
    Originally Posted by Macky the Macky View Post


    Uh, it could be a new "soft" record.



    But we all know THAT ain't the case.



    You mean "smooth" (aka Samsung)
  • sunilramansunilraman Posts: 8,133member
    Quote:
    Originally Posted by Godzilla View Post


    Crazy news! As a shareholder, and one that wants as much incentive to stay in AAPL for the long haul, it's a celebratory moment.



    At the same time, I need to digest it, coming from Apple. I have faith that the company is in good hands, namely with Tim and the immediate Executive Team, and they're doing the best thing here.



    If Apple accumulates too much cash, it can become a liability. Who knows whether the Govt's or anything would want to stick their noses in it, etc. With the incredible future growth, they need to unload a little, and the shareholders deserve it.



    As for AAPL stock, it's got even bigger wings now.



    Could you clarify what liabilities you see? Curious.
  • godzillagodzilla Posts: 156member
    Governments and vultures really trying to stick their noses and hands on it, especially as it becomes more than many Countries are "worth" themselves. At the same time, with so much "cash" in "the bank", where is this cash? Do people really think there's a safe with Apple's $100+B sitting in it? If it grows to such astronomical levels, it's almost as if it becomes a myth, a number.... at a certain point, one could assume that if they wanted to "pull it all out", it wouldn't be so easy.
  • sunilramansunilraman Posts: 8,133member
    Quote:
    Originally Posted by Godzilla View Post


    Governments and vultures really trying to stick their noses and hands on it, especially as it becomes more than many Countries are "worth" themselves. At the same time, with so much "cash" in "the bank", where is this cash? Do people really think there's a safe with Apple's $100+B sitting in it? If it grows to such astronomical levels, it's almost as if it becomes a myth, a number.... at a certain point, one could assume that if they wanted to "pull it all out", it wouldn't be so easy.



    Now that is a very good point. Because, although conventionally we think of cash as "assets" and loans "liabilities", for banks it is the other way around, where the savings of others are "liabilities".



    Apple's cash hoard is so huge it may not be seen as a pure asset.



    Or perhaps it is a form of diversification, because Apple itself holding AAPL stock (how does that work?) is a savings of some sort, and Apple is making money on their own stock with their stock price going up.



    Interesting.
  • emarollingemarolling Posts: 7member
    Following Apple's announcement on Monday that it will pay a quarterly dividend of $2.65 per share as well as initiate a $10 billion share buyback program, executives from the company participated in a conference call with analysts and investors.Apple Chief Executive Tim Cook noted that even though the company sold 37 million iPhones last quarter, it represented less than 9 percent of all handset sales. "The potential for iPhones is enormous."On the launch of the new iPad: "It just keeps getting better." 55 million iPads sold to date, but no sales figures on the new iPad given.Apple still has less than 6 percent PC market share as the Mac continues to grow."We are innovating an incredible pace."Apple is also investing in distribution around the world. "We don't see ceilings to our opportunities," Cook said.
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