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2%-3% dividend suggested as best use of Apple's $100B in cash - Page 4

post #121 of 225
Quote:
Originally Posted by Sacto Joe View Post

What have they got to lose? They've got money to burn! Besides, we don't need a piddly little dividend. Apple went up well over 40% in the last year. Who cares about another lousy 2%, which will be less than that after taxes.

You're absolutely right, and my friend just made a great point. That 100 billion is not in circulation. An economy thrives when people spend, on the other hand overly saving will kill an economy. Just ask the Japanese.
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post #122 of 225
Shareholders are soooo welllllll overrrrr compensated by Apple's stock price exploding -adding over $100 Billion to apples market cap! The capital gains on the surge of stock price is worth many billions to investors and shareholders.

Paying dividends right now is like giving $100 to a someone who just won a $100M lottery. Its dumb!

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post #123 of 225
Quote:
Originally Posted by jragosta View Post

The Board obviously doesn't think so.

You know, the people were elected by shareholders to direct the company. The people who have access to all of Apple's plans. The people who have a legal fiduciary responsibility to plan for Apple's future.

Why should anyone accept your view over theirs?

I'm not asking anyone to.

I asked YOU a simple question.

YOU avoided it.

YOU obviously like to hop on this site and pontificate.

BTW the Board could completely agree with me and make an announcement after the Annual meeting that they want to issue a dividend.
post #124 of 225
The $100 billion should be conservatively spent to expand and FURTHER grow apple's business, Which will FURTHER increase revenue/profit which will FURTHER increase the share price AND shareholder VALUE.

Expansion and growth also means more jobs, more taxes,more investments, etc.

Paying dividends WILL NOT increase revenue/profit/share holder value, it WILL NOT create Jobs, it will NOT DO ANYTHING.

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post #125 of 225
Quote:
Originally Posted by McRCN View Post

Nothing like Apple receiving unsolicited advice from someone on Wall Street. Of course they want access to Apple's cash. If you want a dividend stock by Intel, Microsoft or a utility company. Besides why should Apple pay Uncle Barrack 35% in taxes on the cash needed to pay the dividend that is actually held overseas. It would be just throwing good money away at this point.

And Wall St. will dump Apple stock and go buy something else if they don't pay a dividend. And the stock price will crash, then all you bagholders will be stuck with paper equities that you can never convert to cash.

Dividends are a good idea, trust me, if anyone here actually owns Apple stock, you want a dividend.
post #126 of 225
Quote:
Originally Posted by FriedLobster View Post

The $100 billion should be conservatively spent to expand and FURTHER grow apple's business, Which will FURTHER increase revenue/profit which will FURTHER increase the share price AND shareholder VALUE.

Expansion and growth also means more jobs, more taxes,more investments, etc.

Paying dividends WILL NOT increase revenue/profit/share holder value, it WILL NOT create Jobs, it will NOT DO ANYTHING.

It will return money to the economy, which, as it gets spent again, will in turn drive more consumption or investment, which helps out the economy.
post #127 of 225
Quote:
Originally Posted by McRCN View Post

Nothing like Apple receiving unsolicited advice from someone on Wall Street. Of course they want access to Apple's cash. If you want a dividend stock by Intel, Microsoft or a utility company. Besides why should Apple pay Uncle Barrack 35% in taxes on the cash needed to pay the dividend that is actually held overseas. It would be just throwing good money away at this point.

Why wouldn't they want Apple's money? They own equity in Apple. Wouldn't you want some of the profits from a company you own?
post #128 of 225
Quote:
Originally Posted by Mikeb85 View Post

And Wall St. will dump Apple stock and go buy something else if they don't pay a dividend.

Oh, you know this? Could you be a dear and tell the shareholders here when that'll be so they can sell their stock before it

Quote:
And the stock price will crash, then all you bagholders will be stuck with paper equities that you can never convert to cash.

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post #129 of 225
Quote:
Originally Posted by Tallest Skil View Post

Oh, you know this? Could you be a dear and tell the shareholders here when that'll be so they can sell their stock before it

Sarcasm aside, today would have been a good day to sell. This week was a huge week for Apple, so traders will be taking some profit. Earnings are already out of the way, so odds are good the stock price will lower somewhat until either a dividend is announced, or the iPad 3 is revealed.

But honestly, if the rumours are true, and all you guys are wrong (which you probably are), and Apple does pay a dividend, then this thing will shoot to 600 or 700+, easy. But it's not happening without a dividend.
post #130 of 225
Quote:
Originally Posted by Tallest Skil View Post

Oh, you know this? Could you be a dear and tell the shareholders here when that'll be so they can sell their stock before it

Apple's annual shareholders meeting is on Feb 23rd.

If the Board does not authorize a share buyback or dividend, I would expect the shares to be down afterwards.
post #131 of 225
Quote:
Originally Posted by dasanman69 View Post

So you'd rather pay zero tax on zero income vs. capital gains on free money?

By holding the stock while it increases in value is how a shareholder is being rewarded by Apple. If they want to take profits now - and pay taxes on it - a shareholder is free to sell their shares now.

For a long-term investor, they can hold the stock and sell it at a future date. Now there is the risk that the stock price might drop, but the trade off is the investor can choose when to sell their stock and incur the tax hit. That might be when they retire, and have a lower income rate, so they would pay a lower tax on the profits from the stock sale.

All this thread shows is that we better fix Social Security because most people are clueless about finances and business, and are horrible financial planners. All they can deal with is their "muntlies". Its OK to by a new Apple product, as long as they can pay their minimum monthly credit card bill.

And there is no free money. As pointed out, the taxes to repatriate profits generated overseas to use to pay a dividend would by significant. 35%.

As for what Apple should do with all their cash - I trust the Apple board and management to make the right decisions because they have the best view of Apple's future plans and seem to be pretty smart at running the company. If you don't trust them, sell your stock, take your profits now, pay the taxes, and re-invest your money in some company you trust more than Apple.

One thing to remember is a large portion of Apple's business is in products that run through life-cycles that are lengthening. Take a look at the iPod. The market is fairly saturated, there is not a huge amount of more innovation that can be done, and people buy them less frequently. The iPad will see the same pattern. How often will most people buy a new MacBook? The average user will probably keep a Macbook 5 years or more before considering a replacement.

This is one reason Apple is pushing its eco-system. A steady income from app and music sales help make up for lessening product demand. You may not buy a new iPod or iPhone every year but you may buy songs, apps, etc.
post #132 of 225
Quote:
Originally Posted by Mikeb85 View Post

It will return money to the economy, which, as it gets spent again, will in turn drive more consumption or investment, which helps out the economy.

Apple does not have $100B stuffed in some giant mattress or hidden in a giant shoebox doing nothing. Those funds are in "cash equivalent securities" - something that Apple can easily cash-in - bank notes, government bonds, etc. The issuers of those securities use the money they got from Apple to fund other investments, make loans, etc.

That $100B is not sitting idle and unused. It is part of the economy.
post #133 of 225
Quote:
Originally Posted by msimpson View Post

By holding the stock while it increases in value is how a shareholder is being rewarded by Apple. If they want to take profits now - and pay taxes on it - a shareholder is free to sell their shares now.

For a long-term investor, they can hold the stock and sell it at a future date. Now there is the risk that the stock price might drop, but the trade off is the investor can choose when to sell their stock and incur the tax hit. That might be when they retire, and have a lower income rate, so they would pay a lower tax on the profits from the stock sale.

All this thread shows is that we better fix Social Security because most people are clueless about finances and business, and are horrible financial planners. All they can deal with is their "muntlies". Its OK to by a new Apple product, as long as they can pay their minimum monthly credit card bill.

And there is no free money. As pointed out, the taxes to repatriate profits generated overseas to use to pay a dividend would by significant. 35%.

As for what Apple should do with all their cash - I trust the Apple board and management to make the right decisions because they have the best view of Apple's future plans and seem to be pretty smart at running the company. If you don't trust them, sell your stock, take your profits now, pay the taxes, and re-invest your money in some company you trust more than Apple.

One thing to remember is a large portion of Apple's business is in products that run through life-cycles that are lengthening. Take a look at the iPod. The market is fairly saturated, there is not a huge amount of more innovation that can be done, and people buy them less frequently. The iPad will see the same pattern. How often will most people buy a new MacBook? The average user will probably keep a Macbook 5 years or more before considering a replacement.

This is one reason Apple is pushing its eco-system. A steady income from app and music sales help make up for lessening product demand. You may not buy a new iPod or iPhone every year but you may buy songs, apps, etc.

You do realize that Apple has generated a large % of their retained earnings in the US. They have already paid taxes on that and would not be subject to additional taxes in order to pay a dividend.

As far as the share holders are concerned dividends are taxed at the same rate as "long term gains" 15%.
post #134 of 225
Quote:
Originally Posted by AppleZilla View Post

I think the best use of this money would be to buy up several hundred acres of former factory sites in the United States, move All production here, and slap 'Made in USA' stickers on every product box.

Detroit is calling.

And then Apple can watch their sales and profits drop like a rock because the price of their products will skyrocket relative to the competition.

Detroit may be calling but Apple is not going to be taking that call.

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post #135 of 225
Quote:
Originally Posted by Pixelino View Post

Most of the cash is in offshore accounts (around 60% if I remember). Wouldn't Apple need to repatriate those funds first and pay taxes on it? Sorry for my faulty memory, but I think that would mean around 35% would just be taken away from the get go.

Seems like dividends are a bad financial strategy for both Apple customers and shareholders.

Nope, no need to repatriate off shore capital

Using your math Apple has $40bn in the US.(I believe it is a higher % but I digress)
If Apple's Board declared a 2%-3% dividend that would equate to $9-13bn a year. Apple could EASILY finance that with retained earnings generated in the US.
post #136 of 225
Quote:
Originally Posted by Realistic View Post

And then Apple can watch their sales and profits drop like a rock because the price of their products will skyrocket relative to the competition.

Detroit may be calling but Apple is not going to be taking that call.

They seem to be doing just fine with currently skyrocket prices compared to the competition.
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post #137 of 225
Quote:
Originally Posted by Wovel View Post

What on earth makes you think analysts reflect the views of the stockholders? Nothing could be further from the truth. The directors are selected by the stockholders and they in fact represent them. Most analysts are not even shareholders. I am.

Why don't I want a dividend?
  1. Apple would have to repatriate the money, losing a large portion of it to the US Government
  2. I don't want to pay anymore income taxes. A 3% dividend would devalue the stock by an equal amount and then I will get the added pleasure of paying capital gains tax. Thanks. A dividend is a lose/lose for all of us.

Why not invest in Cirrus Logic. Who cares about Cirrus Logic. Right now Apple can make investments in places where they have money. They can't just spend the 100 bllion wherever the mood strikes them. I have no idea if Cirrus Logic makes any sense as a purchase for Apple.

The problem Apple has is that the money is coming in very fast. In any cases it is coming in places they can not spend it without moving it. If they move it they will incur a large tax liability. A large part of it is waiting on a Western government to decide they want that money spent in their country. The buyback idea has some merit, but it still has the repatriation problem.

Your post is long, but it is clear you have not really considered any of the issues around this. You claim others do not understand for-profit corporations. It is clear you do not understand the economics of a global corporation.

The analysts I was referring to are the people on the likes of CNBC, who typically are in fact holders of the stock, as am I. To my way of thinking, they are analysts. I can't think of any reason why they should not be regarded as analysts. You evidently have a different definition, but you haven't made it clear, and it is clear that it is contrived.

As for your reasons #1 and #2, I do not know what you mean exactly by "repatriating" the money. I would be interested in that explanation, assuming that you can make sense of it and it does not turn out to be the same as #2, i.e., the need for stockholders to pay tax. And as for #2, if the stock increases in value and you eventually make your money by selling the stock at a profit, you will pay capital gains tax. Presently capital gains are taxed at a discount below even the discount that you get in effect when you have an investment in a tax-deferred savings account (which makes no sense), and although I haven't looked into it lately, my recollection is that per the present statutory requirement, this is scheduled to return over the next few years to the levels that applied to capital gains prior to whenever it was that it was decided that people who make their living from their investments should pay less tax than people who make their living in the more common manner. (I make mine almost entirely from investments, for the record.) Yet, you imply that if you get a dividend, you will pay capital gains tax on the dividend. I am pretty sure that this is not correct, and that as such, you do not know what you are talking about.

You dismiss the suggestion that Apple should buy Cirrus Logic. I gave a perfectly good reason. Cirrus Logic makes a product that Apple uses lots of, and Cirrus Logic is profitable. It is a no-brainer. Yet, you dismiss it, and you don't even give a reason. If you are not even going to bother to give a reason for what you assert, why should anyone pay any attention to you? For that matter, why should you pay any attention to yourself, if you make assertions and then turn immediately around and admit that you don't have any reason for the assertion?

You say that I have no considered the issues around this, but the only thing that you really brought up is the business of "repatriation". But you have not said anything about what this actually means, and you have not put any money behind it. Presumably you are saying that a substantial amount of this "cash" is not cash in the sense of USA currency, and you imply that Apple could not pay this meager 2% - 3% dividend without having to pay for this repatriation. This is something that you need to explain, in detail, with numbers, i.e., numbers that give quantitative meaning to just how much money would be paid to the federal government, by Apple, in order to pay holders of common stock a meager dividend.
post #138 of 225
Quote:
Originally Posted by Wovel View Post

The dividend is worse than that. It would drop the present value, reduce future growth, and create a tax liability for investors. Additionally, repatriating the cash to pay the dividend would incur a significant tax liability for Apple.

You keep making these claims, but you do not back any of it up. A 2%- 3% dividend from Apple is not going to have a negative impact on the value of the stock. In fact, it will have precisely the opposite effect. There is widespread agreement among informed shareholders that this would be the effect on share value, yet you assert the opposite. And how would it reduce future growth, given that Apple has not yet even figured out what else they would do with it? This obviously does not make a whit of sense. And again you talk about repatriating the dividend, yet you still have not explained just what this entails and have not said anything definitive about just how much money would necessarily be forfeited to pay a meager 2% - 3% dividend.
post #139 of 225
Quote:
Originally Posted by Wovel View Post

You apparently have never owned a stock.

It seems to me that you must be the one who has never owned a stock. There is practically unanimous agreement among informed shareholders, for reasons that are apparent to just about everyone but you, that as soon as Apple begins to pay a dividend, the value of the stock will increase dramatically. Perhaps you are thinking of the more mundane effect that occurs whenever a stock that routinely pays a dividend goes post-dividend. If that is what you are thinking of, then you are being disingenuous. It is not the same thing at all. That is what happens to a stock where the perceived value of the stock derives expressly from the regular payment of dividends, i.e., where the stock is more like a bond or a savings account for intents and purposes. This is presumably what you are thinking of, but it has no real applicability here. IF the dividend is announced for payment for stockholders of record at a future date, then of course there will be a short term ramp up in the value of a share leading up to that date, and then an abrupt drop when it goes post-dividend. But this effect is a wash. You have to pay for the dividend to get it. The more significant effect for Apple common shares will be the effect that occurs by virtue of the change in philosophy re paying dividend. The mere fact that Apple will at times pay dividends will increase the value of the stock. You seem not to understand this, and if you really do own in Apple stock, you are evidently the only owner of Apple stock who does not realize this.
post #140 of 225
Quote:
Originally Posted by kaiser_soze View Post

You keep making these claims, but you do not back any of it up. A 2%- 3% dividend from Apple is not going to have a negative impact on the value of the stock. In fact, it will have precisely the opposite effect. There is widespread agreement among informed shareholders that this would be the effect on share value, yet you assert the opposite. And how would it reduce future growth, given that Apple has not yet even figured out what else they would do with it? This obviously does not make a whit of sense. And again you talk about repatriating the dividend, yet you still have not explained just what this entails and have not said anything definitive about just how much money would necessarily be forfeited to pay a meager 2% - 3% dividend.

Kaiser you are correct,

Wovel is woefully misinformed.

Apple DOES NOT have to repatriate a penny OR pay any additional taxes to the US in order to pay a 2-3% dividend.
post #141 of 225
Quote:
Originally Posted by Wovel View Post

Apple is not an income stock and I knew that when I want it. It is also not free money. It would devalue the stock. Since I bought it as a growth stock I would prefer that not happen. Eventually I hope to get it all moved into a retirement account, but you know what. I still would not want them devaluing my growth stock to try and pretend it is an income stock.

Your suggestion that the most undervalued growth stock on the market should reduce its value and slow its growth is quite bizarre. Maybe they should take on a huge debt so their enterprise value can go up too. People really need to stop learning about investing by reading random web pages.

Each time I read something you wrote I am more stunned than before. By what bizarre stretch of the imagination does Apple paying a dividend that has no appreciable effect on its cash pile and no discernible effect on Apple's future product plans transform it from a "growth" stock to a "dividend" stock? Am I supposed to pretend to believe that this makes any sense at all? It is obvious to me and probably everyone else here that this makes no sense at all.
post #142 of 225
If you invested in Apple to get dividends then you are a fool. If you invested to make money on the growth of Apple's stock, you have and still are. I trust Apple's board to do with the money what they feel is in the best interest for the continued long-term growth of the company.

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post #143 of 225
Quote:
Originally Posted by syracuse View Post

Apple's "Board of Directors" decide on a dividend, not management.

Apple's Annual Shareholders meeting is less then a month away, that is probably when "the Board" would announce the size/timing of a dividend(if they decided to issue one at all)

Apple has $98bn of cash equivalents, as of Dec 31'11, according to their 10Q. They are generating plenty of cash, but a lot of that is overseas and would be subject to US taxes if Apple repatriates that cash in the form of a dividend to shareholders. Apple would probably would use US earnings to dictate the dividend payout(tax efficient)

I'm hearing Investment Banks have been canvassing "Value Fund Mgrs." about their interest in owning AAPL stock if Apple issued a dividend and presenting those results to the Board.

I suspect some Large Value Mgrs. think Apple will issue a dividend and have proceeded to buy up shares ahead of the announcement leading to the rather large upward movement of AAPL recently.

An initial 2-3% annual dividend payout(roughly $10-15/share) would be extremely POSITIVE for AAPL stock, and I would love to see it.

Apple's operating business would not be affected at all by paying out a dividend.

Thanks for injecting some sanity into this discussion, debunking particularly the claims being made by the likes of Wovel.

You are almost certainly correct that the recent run-up in the share value is driven by the expectation that Apple will commence paying an annual dividend. Given this, it is beyond obvious that the value of the share increases substantially as a result of the dividend being paid, and does not reduce the value as certain misinformed people keep saying. Nor does a small dividend of this sort have any significant impact on Apple's future product plans or growth. The question of repatriation is one that I don't know about. The obvious questions are (1.) how much of the roughly 100 B is subject to repatriation costs, (2) what is the repatriation cost going to be if all of that amount is repatriated, and (3.) does the payout of a 3% dividend truly mean that some of that money not yet repatriated will have to be repatriated. These questions need to be addressed in meaningful detail before this repatriation business is a valid argument opposing the payment of the dividend.
post #144 of 225
Quote:
Originally Posted by Wovel View Post

That presumes you know what Apple's long term plans are for the cash.

But you have yet to suggest any alternative. Implicitly, you assert that Apple should just allow it to continue to accumulate. If you are proposing something else, then what, exactly?
post #145 of 225
Quote:
Originally Posted by syracuse View Post

Why can't AAPL be BOTH a growth and income stock?

Paying a dividend has ZERO impact on the growth of Apple's business.

Yep. The suggestion that someone made that by virtue of paying this trivial dividend transforms Apple from a "growth" stock to an "income" stock is just about as silly as it could be.
post #146 of 225
Quote:
Originally Posted by jd_in_sb View Post

Agreed

You agree that paying dividends is a waste of money? Then why is it that preferred stock, as opposed to common stock, is distinguished in part by the guaranteed payment of dividends? And if that makes sense, then why do banks like to buy stocks that pay dividends? Why are so many institutional investors upping the price of Apple stock on the prospects that Apple will commence paying annual dividends?
post #147 of 225
Quote:
Originally Posted by Wovel View Post

Again, none of us can make that statement because we have no idea what the strategic plans are for the 100 billion dollars. They may be sitting on it awaiting favorable tax conditions somewhere so they can make an acquisition.

People in this thread keep making bizarre blanket absolute statements. No one on this thread can possibly say paying a dividend will not impact Apples growth as a company.

This is a preposterous argument. The amount of cash Apple is sitting on is 5x greater than the market capitalization of Sony, about 16x greater than the market cap of HP, nearly 3x greater than the market cap of MS. This is what all the analysts keep pointing out. If the amount of money we are talking about were 100 trillion, you would still be making the same statements. At what point do you decide that it would make sense for Apple to pay a 3% dividend? What is the alternative that you propose?
post #148 of 225
Quote:
Originally Posted by Mikeb85 View Post

And Wall St. will dump Apple stock and go buy something else if they don't pay a dividend. And the stock price will crash, then all you bagholders will be stuck with paper equities that you can never convert to cash.

Dividends are a good idea, trust me, if anyone here actually owns Apple stock, you want a dividend.

I own AAPL as a major part of one of my portfolios... I still have shares that I bought at $17 (before a 2::1 split). I have been buying additional shares over the years whenever it looked like it was a good buy.

I don't want a dividend or a stock buyback -- I bought AAPL for growth, not for income.

IMO, a better solution to increase the growth of the price of AAPL would to split the stock, say 10::1 to 50::1.

This would not directly change the valuation, but it would make the stock available to the small investor -- like I was when I bought those $17 shares.

IMO, in the long run, the stock would benefit by being held by a larger number of investors and be less influenced by the manipulators.

At the end of 2009 I gifted AAPL and some other stocks to my daughter -- she is quite happy with the results -- AAPL was at $210.

This year I plan to gift AAPL and other stocks to my 3 grandchildren.

They all have savings accounts at 2% interest (saving for cars).

But I want them to understand how to invest for growth and to Invest for income.

AAPL at $10-$50 a share would be easier for them to place into perspective than AAPL at $500.



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post #149 of 225
Quote:
Originally Posted by kaiser_soze View Post

Thanks for injecting some sanity into this discussion, debunking particularly the claims being made by the likes of Wovel.

You are almost certainly correct that the recent run-up in the share value is driven by the expectation that Apple will commence paying an annual dividend. Given this, it is beyond obvious that the value of the share increases substantially as a result of the dividend being paid, and does not reduce the value as certain misinformed people keep saying. Nor does a small dividend of this sort have any significant impact on Apple's future product plans or growth. The question of repatriation is one that I don't know about. The obvious questions are (1.) how much of the roughly 100 B is subject to repatriation costs, (2) what is the repatriation cost going to be if all of that amount is repatriated, and (3.) does the payout of a 3% dividend truly mean that some of that money not yet repatriated will have to be repatriated. These questions need to be addressed in meaningful detail before this repatriation business is a valid argument opposing the payment of the dividend.

No need to repatriate capital in order to pay a 2-3% yearly dividend.

Whoever claims that Apple would incur repatriation tax costs associated with a dividend is WRONG

Apple generates more then $9-$13bn(2-3% dividend) in retained earnings in the US over the course of a year. Apple does not need to touch their overseas money.
post #150 of 225
Quote:
Originally Posted by kaiser_soze View Post

It seems to me that you must be the one who has never owned a stock. There is practically unanimous agreement among informed shareholders, for reasons that are apparent to just about everyone but you, that as soon as Apple begins to pay a dividend, the value of the stock will increase dramatically. Perhaps you are thinking of the more mundane effect that occurs whenever a stock that routinely pays a dividend goes post-dividend. If that is what you are thinking of, then you are being disingenuous. It is not the same thing at all. That is what happens to a stock where the perceived value of the stock derives expressly from the regular payment of dividends, i.e., where the stock is more like a bond or a savings account for intents and purposes. This is presumably what you are thinking of, but it has no real applicability here. IF the dividend is announced for payment for stockholders of record at a future date, then of course there will be a short term ramp up in the value of a share leading up to that date, and then an abrupt drop when it goes post-dividend. But this effect is a wash. You have to pay for the dividend to get it. The more significant effect for Apple common shares will be the effect that occurs by virtue of the change in philosophy re paying dividend. The mere fact that Apple will at times pay dividends will increase the value of the stock. You seem not to understand this, and if you really do own in Apple stock, you are evidently the only owner of Apple stock who does not realize this.

Quote:
"There is practically unanimous agreement among informed shareholders, for reasons that are apparent to just about everyone but you, that as soon as Apple begins to pay a dividend, the value of the stock will increase dramatically."

Link please -- not just talking a knee-jerk short-term blip, but continued long-term growth in the price of AAPL.

The opinions of investment analysts or brokers who just want to churn AAPL stock are suspect.

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post #151 of 225
Quote:
Originally Posted by jragosta View Post


No need to go any further. There is absolutely no evidence whatsoever that analysts reflect the opinions of stock holders. Nor is there any legal mechanism for the Board to pay any attention to analysts. The only thing you stated correctly is that the stock holders eventually control Apple. But they don't do that by voting on what they want (other than limited circumstances). Instead, they do that by electing board members to represent them. The BOARD decides what Apple does with its cash, not analysts.

AAAARRRRRGGGGGHHHHHHH!

I hate to shout, BUT BY WHAT RATIONALE DO YOU REGARD STOCKHOLDERS AND ANALYSTS AS TWO MUTUALLY EXCLUSIVE CLASSES OF PEOPLE???????????????????????????

The analysts that I have in mind are the analysts that own shares and that are studying the situation from the standpoint of what is best for shareholders. This ought to be obvious. Yet you, just like that other person who keeps making silly, contrived statements, proceeded from the contrived precept that analysts and not stockholders. And then you proceeded to add a really, really intelligent and informed angle to the whole debate by asserting that stock holders do not control the company directly, but do so only by electing board members to represent them. On this as well you are just plain wrong. Stockholders get initiatives placed on the ballots quite often. It happens with Apple. It varies from company to company. What you stated as a universal truth is nothing of the sort. I haven't checked into it, but unless it is expressly prohibited in the corporate bylaws, it would be possible for shareholders to force the payment of a dividend whether the board wants it or not. The statement you made is in effect a claim that in no corporation is it possible for shareholders to force a corporation to do anything that the board does not favor, but if you have ever received a ballot prior to an annual shareholder meeting, you would surely know that this is simply not correct.
post #152 of 225
Dick Applebaum, you sound like a nice fellow.

Apple is way too large to be manipulated by hedge funds.

The reason a dividend makes sense is their are many large Value Fund Managers like Fidelity, Vanguard, T Rowe Price, etc that would LOVE to buy APPLE stock, but they are not allowed to since it does not pay a dividend. Also many retirees that live on a fixed income would welcome the chance to own Apple and receive a quarterly dividend.

Apple's growth is intact and would not be affected by a dividend.

I'm agnostic about a stock split, maybe you could explain to your grandchildren that a share of APPLE is VERY valuable and thats why it trades at $490(I'm not sure they would understand the concept of # of shares issued)
post #153 of 225
Quote:
Originally Posted by drobforever View Post

Apple cannot pay dividend or buyback, because they don't really have the cash. Most of the cash is trapped in foreign countries and if they bring it back they'd have to pay tax and that'd be a huge hit to earnings.

That's why these analysts are clueless. Only if Mitt became president and sign a bill of tax holiday, then we'd see AAPL pay dividend or do buyback.


So you are claiming that to pay a 3% dividend, Apple would have to "repatriate" cash that otherwise they would not have to repatriate. Can you back this claim up with actual numbers? Given the rate that the cash pile is increasing, it just does not seem likely to me unless virtually all of the profit is being reaped overseas.
post #154 of 225
Quote:
Originally Posted by Sacto Joe View Post

I'm inclined to agree with those who say that Apple's focus shouldn't be to maximize shareholder value. We're along for the ride. We paid for that privilege, but we did so for the chance to be rewarded by an increasing stock price, nothing more.

The question Apple's board is clearly struggling with is, what is the best way we can use our cash to serve our focus? The answer is tied up in the question, what is or should be Apple's focus? Again, the answer is clear: Customer satisfaction.

So maybe the best thing they can do with the extra money is lower the price of their product. Only one problem: They can't keep up demand as it is! Therefore, the best use of the extra cash is to vastly increase production so that they can lower the price, and increase the number of stores so they can improve service. Oh, and keep improving the quality of their product.

Hmm. They're already doing all of these things, and they STILL are generating annoyingly large quantities of spare cash.

Maybe they should become a bank. Or a charity. Or a foundation.

You know what? I'm fine with all those. But as a stockholder, I see absolutely no need for a dividend.

Slappy, is that you again? I love you, you little guy. So funny

Windows survivor - after a long, epic and painful struggle. Very long AAPL

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Windows survivor - after a long, epic and painful struggle. Very long AAPL

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post #155 of 225
Quote:
Originally Posted by kaiser_soze View Post

AAAARRRRRGGGGGHHHHHHH!

I hate to shout, BUT BY WHAT RATIONALE DO YOU REGARD STOCKHOLDERS AND ANALYSTS AS TWO MUTUALLY EXCLUSIVE CLASSES OF PEOPLE???????????????????????????

The analysts that I have in mind are the analysts that own shares and that are studying the situation from the standpoint of what is best for shareholders. This ought to be obvious. Yet you, just like that other person who keeps making silly, contrived statements, proceeded from the contrived precept that analysts and not stockholders. And then you proceeded to add a really, really intelligent and informed angle to the whole debate by asserting that stock holders do not control the company directly, but do so only by electing board members to represent them. On this as well you are just plain wrong. Stockholders get initiatives placed on the ballots quite often. It happens with Apple. It varies from company to company. What you stated as a universal truth is nothing of the sort. I haven't checked into it, but unless it is expressly prohibited in the corporate bylaws, it would be possible for shareholders to force the payment of a dividend whether the board wants it or not. The statement you made is in effect a claim that in no corporation is it possible for shareholders to force a corporation to do anything that the board does not favor, but if you have ever received a ballot prior to an annual shareholder meeting, you would surely know that this is simply not correct.

Yeah... Analysts like Cramer who periodically buy/sell shares to manipulate them -- then brag about the churn.

Those aren't investors -- they're manipulators.

"Swift generally gets you to the right way much quicker." - auxio -

"The perfect [birth]day -- A little playtime, a good poop, and a long nap." - Tomato Greeting Cards -
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"Swift generally gets you to the right way much quicker." - auxio -

"The perfect [birth]day -- A little playtime, a good poop, and a long nap." - Tomato Greeting Cards -
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post #156 of 225
Quote:
Originally Posted by kaiser_soze View Post

AAAARRRRRGGGGGHHHHHHH!

I hate to shout, BUT BY WHAT RATIONALE DO YOU REGARD STOCKHOLDERS AND ANALYSTS AS TWO MUTUALLY EXCLUSIVE CLASSES OF PEOPLE???????????????????????????

The analysts that I have in mind are the analysts that own shares and that are studying the situation from the standpoint of what is best for shareholders. This ought to be obvious. Yet you, just like that other person who keeps making silly, contrived statements, proceeded from the contrived precept that analysts and not stockholders. And then you proceeded to add a really, really intelligent and informed angle to the whole debate by asserting that stock holders do not control the company directly, but do so only by electing board members to represent them. On this as well you are just plain wrong. Stockholders get initiatives placed on the ballots quite often. It happens with Apple. It varies from company to company. What you stated as a universal truth is nothing of the sort. I haven't checked into it, but unless it is expressly prohibited in the corporate bylaws, it would be possible for shareholders to force the payment of a dividend whether the board wants it or not. The statement you made is in effect a claim that in no corporation is it possible for shareholders to force a corporation to do anything that the board does not favor, but if you have ever received a ballot prior to an annual shareholder meeting, you would surely know that this is simply not correct.

jragost gives way too much credit to the Board. Most Boards are puppets for Senior Mgmt that meet a few times a year. I'm sure when Jobs was Chairmen he ran the Board with an iron fist. 99.9999% of Apple's success was/is driven by their Sr Mgmt, engineers and all of their employees', certainly not the Board.
post #157 of 225
Quote:
Originally Posted by syracuse View Post

Dick Applebaum, you sound like a nice fellow.

Apple is way too large to be manipulated by hedge funds.

The reason a dividend makes sense is their are many large Value Fund Managers like Fidelity, Vanguard, T Rowe Price, etc that would LOVE to buy APPLE stock, but they are not allowed to since it does not pay a dividend. Also many retirees that live on a fixed income would welcome the chance to own Apple and receive a quarterly dividend.

Apple's growth is intact and would not be affected by a dividend.

I'm agnostic about a stock split, maybe you could explain to your grandchildren that a share of APPLE is VERY valuable and thats why it trades at $490(I'm not sure they would understand the concept of # of shares issued)

I am a nice fellow!

I did not suggest who is doing the manipulation -- just that manipulation is being done!

I believe that concentrating the AAPL holdings in a few large funds, as you suggest, is antithetical to long-term growth -- which is why I invested in the stock.

I would rather see Apple invest their cash in things that will maintain and improve long-term growth.

The split would dampen the effect of the manipulators and bring in the new generation of long-term investors.
"Swift generally gets you to the right way much quicker." - auxio -

"The perfect [birth]day -- A little playtime, a good poop, and a long nap." - Tomato Greeting Cards -
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"Swift generally gets you to the right way much quicker." - auxio -

"The perfect [birth]day -- A little playtime, a good poop, and a long nap." - Tomato Greeting Cards -
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post #158 of 225
Quote:
Originally Posted by Dick Applebaum View Post

Yeah... Analysts like Cramer who periodically buy/sell shares to manipulate them -- then brag about the churn.

Those aren't investors -- they're manipulators.


No one should seriously listen to Jim Cramer for investment advice.

He is an entertainer out for ratings and book sales.
post #159 of 225
Quote:
Originally Posted by kaiser_soze View Post

This is a preposterous argument. The amount of cash Apple is sitting on is 5x greater than the market capitalization of Sony, about 16x greater than the market cap of HP, nearly 3x greater than the market cap of MS. This is what all the analysts keep pointing out. If the amount of money we are talking about were 100 trillion, you would still be making the same statements. At what point do you decide that it would make sense for Apple to pay a 3% dividend? What is the alternative that you propose?

I agree 100%. At some point, whether it's 100B or 500B or 1T, Apple will have to have a good explanation as to why it's withholding that cash from shareholders.

It's true that SJ didn't consider dividends. But there is a point where they cannot justify the size of the hoard. I'm guessing, along with other stockholders, that the day of the iDividend is rapidly approaching. And I agree that that is pushing up the stock price, along with the impending arrival of the iPad 3.

Apple has plenty of cash to pay the dividend without depleting their powerful cash hoard.
post #160 of 225
Quote:
Originally Posted by kaiser_soze View Post

So you are claiming that to pay a 3% dividend, Apple would have to "repatriate" cash that otherwise they would not have to repatriate. Can you back this claim up with actual numbers? Given the rate that the cash pile is increasing, it just does not seem likely to me unless virtually all of the profit is being reaped overseas.

There's money and there's money. The money AAPL earned within US have a lot of potential use, so that worth a lot more than the money earned in e.g. Japan. That's why they're not gonna use the money earned in US to pay dividend or do buybacks. I mean, they want to be able to, at any time, e.g. to engage in bidding war against some hot tech companies, and judging from how much GOOG paid Motorola, they could need 10s of $B in US as reserve for that. The overseas money, they'd have to pay tax to bring it back, which they'd never do unless there's a tax holiday (the hit in earnings would be so big it's not happening).
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