or Connect
AppleInsider › Forums › Investors › AAPL Investors › Apple to host conference call Monday to discuss its $100B cash balance
New Posts  All Forums:Forum Nav:

Apple to host conference call Monday to discuss its $100B cash balance - Page 4

post #121 of 197
To clear up some of the continuing confusion about tomorrow, this is directly from Apple's investor's page:

Quote:
Apple Conference Call

Tim Cook, Apple's CEO, and Peter Oppenheimer, Apple's CFO, will host a Conference Call on Monday, March 19, 2012 at 6:00 a.m. PT to announce the outcome of the Company's discussions concerning its cash balance. Apple will not be providing an update on the current quarter nor will any topics be discussed other than cash.
post #122 of 197
Apple is already using Sharp's LCDs on their iPhones and is rumored to be their secondary supplier for the screens for the new ipad (after Apple's nemesis Samsung). If Apple starts making larger retina screens for TVs and displays for Macs they might announce a much larger investment into Sharp or an outright purchase of them which would give them huge manufacturing abilities they don't have. Sharp is also highly rated for their environmental standards and use of renewable energy which Apple needs.
We become what we behold. We shape our tools and then our tools shape us.- Marshall McLuhan

Join 'The New Middle Class Movement' @ http://www.facebook.com/pages/The-Ne...45269528896164
Reply
We become what we behold. We shape our tools and then our tools shape us.- Marshall McLuhan

Join 'The New Middle Class Movement' @ http://www.facebook.com/pages/The-Ne...45269528896164
Reply
post #123 of 197
I think this is the way to go. It gives long term stability to owning the stock. Allows those who want to invest their own money the freedom to do so. $20 per year to start with 40% income target for dividend. 3.3% yield to start, dividend reinvestment could drive returns in IRA's & 401k's to higher levels helping whole country get prepared to retire. 25% returns over next 10 years with reinvested dividends is very easily doable. That would be a $150 dividend per share after 10 years. $2000, the dividend from 100 shares would buy 3.33 shares. Not counting further reinvestment those first shares would be returning $500 in dividends after 10 years. I havn't tried to figure ou the compounding, but it would not be insignificant. Apples cash on hand would still rise, at a slower pace.
post #124 of 197
Quote:
Originally Posted by AppleGreen View Post

I own shares in my Roth as well, but what they do with the cash will not change Apple's value near term although trading may be volatile on Monday. My intention is to keep the shares until something fundamental changes.

I wouldn't have said that. In my opinion if they announce a regular ongoing dividend the stock could move from 585 to as high as 650 tomorrow. I've been holding shares since it was 30 and 60 bucks and I've got a bunch of LEAPs.

I think money would pour in for a dividend.
Emailing video from iPhone to Apple TV , sort of..
Reply
Emailing video from iPhone to Apple TV , sort of..
Reply
post #125 of 197
[QUOTE=AppleInsider;2075463]Apple will host a conference call on Monday at 9 a.m. Eastern, 6 a.m. Pacific to discuss what it plans to do with its $100 billion cash.

Regular dividend with voluntary dividend reinvestmnt

I think this is the way to go. It gives long term stability to owning the stock. Allows those who want to invest their own money the freedom to do so. $20 per year to start with 40% income target for dividend. 3.3% yield to start, dividend reinvestment could drive returns in IRA's & 401k's to higher levels helping whole country get prepared to retire. 25% returns over next 10 years with reinvested dividends is very easily doable. That would be a $150 dividend per share after 10 years. $2000, the dividend from 100 shares would buy 3.33 shares. Not counting further reinvestment those first shares would be returning $500 in dividends after 10 years. I havn't tried to figure ou the compounding, but it would not be insignificant. Apples cash on hand would still rise, at a slower pace
post #126 of 197
Quote:
Originally Posted by jragosta View Post

Not me. A dividend does not historically increase the share price of a growth stock. For example, look at the big Microsoft one-time dividend a year ago. The share price dropped by almost exactly the amount of the dividend.

And Microsoft's share price growth has been far lower than Apple's - and MS offers a dividend and Apple does not. There's no evidence that a dividend increases the share price of growth stocks - and people like Warren Buffet are staunchly opposed.

Those are bad examples as well. MS's stock has languished because investors don't see them as moving up the ladder anymore. Their growth has been modest for a growth stock and has been slowing over time. Their stock is up this year because there is unbounded hope that Win8 will change the way MS works and that growth will restart.

MS's big one time dividend was a way back. That was about $33 billion, and was given, not because the stock was doing well, but because it wasn't. It was a strong demand by investors. The situation with Apple is very different. With Apple, the cash is increasing at such a quick rate, that it's too much. I don't know how you feel about vast amounts of cash when the company can't really use it. But, it's sitting there doing little.

I would agree, if you're saying it that a dividend would more likely raise the share price than a one time disbursement. But I think that even a disbursement in this case would raise the share price. As many financial people are now saying, Apple is different from other companies. And it is. That's not fanboyism either. Apple is a cash generation machine like no other. As it grows, it will throw off cash at ever increasing rates.

It will affect the stock price positively, because investors will think that owning the stock will give them a good chance of getting more dividends, or another distribution. This distribution would only be a one time thing like the Great War was the war to end all wars—until the next one came.

The situation is that with Apple generating so much cash, another distribution would become necessary after some time, if a fairly large divident wasn't established, and increased on a regular basis.

Quote:
That's not at all true. A large one-time dividend causes a drop in share price roughly equal to the value of the dividend. If it's an ongoing dividend, there's no evidence that dividends are correlated with share price. Some of the fastest growing stocks (Berkshire Hathaway and AAPL, for example) do NOT pay dividends.

But feel free to provide evidence to support the claim that a dividend generally increases share price.

See the above, and I think that you should provide evidence that in the case of Apple, your statements would be true. MS is a very different company from Apple, and the lessons learned there, financially, needn't apply here. All the reasons would be different, and you must take that into account.


Quote:
Not quite true.

They pay taxes in local currency on money earned in other countries. If they repatriate the money, they pay taxes based on US tax rates - BUT they get to deduct the amount paid on foreign countries. So, in effect, if they want the money back in the U.S., the total tax rate they pay will be US tax rates, so there's no double taxation.

I'm not sure that's entirely true. I've read that the tax rate would be more than that for various reasons. But even if it were true, it's still complex. Apple and other companies rarely pay the full rate because of R&D, and other mediating reasons. How would this work out? The rate would still be higher than it would otherwise. We're talking about billions for any particular large company, possibly tens of billions.

Quote:
Actually, you have it backwards.

A split is shuffling deck chairs. It has absolutely no impact on the ratios or the split-adjusted share price. Evidence is pretty clear that while a split might have a very short term benefit, that goes away quickly.

OTOH, a buy-back has a very real effect. There are 930 M shares in circulation right now. The per-share earnings are $X divided by 930 M. If Apple buys back 30 M shares, then the per-share earnings are $X divided by only 900 M, so earnings per share are increased - permanently.

Whatever multiple the investor uses will be based on the new share price, so the price would increase proportionally. That is, if they buy back 5% of the shares, the share price will increase approximately 5%.

Well, I can agree with that. But, there's little evidence that it would raise the price of the shares, because it rarely ever does, and when it does, it often gets wiped out again as the market moves around. After all, buybacks don't actually increase anything real. It's just an illusion.

Heh! You should have used the example of MS again because they've done a lot of buybacks, and all during that time, their stock trended downwards. Include inflation, and even With the recent quick rise, it's less than it was ten years ago.
post #127 of 197
Quote:
Originally Posted by Tallest Skil View Post

They're buying three states in northern Mexico, annexing them to the US, and setting up solar-powered, fully-robotic factories so that Apple products can be made locally.

If they buy Sonora... we get Nogo and some of the best Mexican food in existence -- read this Bobby Flay and perish with envy...

Burritos, Chilles rellaños, sopapillas, chile verde...

Plus La Plaza del Toros...
"...The calm is on the water and part of us would linger by the shore, For ships are safe in harbor, but that's not what ships are for."
- Michael Lille -
Reply
"...The calm is on the water and part of us would linger by the shore, For ships are safe in harbor, but that's not what ships are for."
- Michael Lille -
Reply
post #128 of 197
Quote:
Originally Posted by Dick Applebaum View Post

If they buy Sonora... we get Nogo and some of the best Mexican food in existence -- read this Bobby Flay and perish with envy...

Burritos, Chilles rellaños, sopapillas, chile verde...

Plus La Plaza del Toros...

And, a big advantage is that they can use the distribution channels of the drug cartels which are the only distribution methods that are actually better than Apple's.
post #129 of 197
I think they're going to announce the purchase of an Eastern European country that will be turned into a factory. The name will be changed to the Apple Nation. Everybody there will work to produce all of the products needed for Europe and the Middle East.

I would prefer they purchase a Central American country because it would be more fun to go on vacation to a warm country to visit the newest Apple capital.
post #130 of 197
they are going to build a moat around the new HQs and fill it with man-eating sharks with lazers attached to them.
post #131 of 197
Quote:
Originally Posted by jragosta View Post

Not me. A dividend does not historically increase the share price of a growth stock. For example, look at the big Microsoft one-time dividend a year ago. The share price dropped by almost exactly the amount of the dividend.

And Microsoft's share price growth has been far lower than Apple's - and MS offers a dividend and Apple does not. There's no evidence that a dividend increases the share price of growth stocks - and people like Warren Buffet are staunchly opposed.

Both terrible examples. In both cases, Apple's success depends on having access to all content and carriers. Choosing only one puts them in competition with key partners.

That's not at all true. A large one-time dividend causes a drop in share price roughly equal to the value of the dividend. If it's an ongoing dividend, there's no evidence that dividends are correlated with share price. Some of the fastest growing stocks (Berkshire Hathaway and AAPL, for example) do NOT pay dividends.

But feel free to provide evidence to support the claim that a dividend generally increases share price.

Not quite true.

They pay taxes in local currency on money earned in other countries. If they repatriate the money, they pay taxes based on US tax rates - BUT they get to deduct the amount paid on foreign countries. So, in effect, if they want the money back in the U.S., the total tax rate they pay will be US tax rates, so there's no double taxation.

Actually, you have it backwards.

A split is shuffling deck chairs. It has absolutely no impact on the ratios or the split-adjusted share price. Evidence is pretty clear that while a split might have a very short term benefit, that goes away quickly.

OTOH, a buy-back has a very real effect. There are 930 M shares in circulation right now. The per-share earnings are $X divided by 930 M. If Apple buys back 30 M shares, then the per-share earnings are $X divided by only 900 M, so earnings per share are increased - permanently.

Whatever multiple the investor uses will be based on the new share price, so the price would increase proportionally. That is, if they buy back 5% of the shares, the share price will increase approximately 5%.


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.
post #132 of 197
They will buy Greece, Spain and Italy, installing Cook, Forstall and Ives as presidents.

No Idea what they will do with the other $90B though.
post #133 of 197
I wonder if they waited until after iPad sales started just to make sure numbers were as off-the-charts as they hoped. Seems like you could read this as a confirmation that things are going very well.
post #134 of 197
Quote:
Originally Posted by melgross View Post

Those are bad examples as well. MS's stock has languished because investors don't see them as moving up the ladder anymore. Their growth has been modest for a growth stock and has been slowing over time. Their stock is up this year because there is unbounded hope that Win8 will change the way MS works and that growth will restart.

Then forget AAPL and MSFT. Provide evidence that a dividend increases share price. There is no such evidence.

Quote:
Originally Posted by melgross View Post

MS's big one time dividend was a way back. That was about $33 billion, and was given, not because the stock was doing well, but because it wasn't. It was a strong demand by investors. The situation with Apple is very different. With Apple, the cash is increasing at such a quick rate, that it's too much. I don't know how you feel about vast amounts of cash when the company can't really use it. But, it's sitting there doing little.

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.

Quote:
Originally Posted by melgross View Post

I would agree, if you're saying it that a dividend would more likely raise the share price than a one time disbursement. But I think that even a disbursement in this case would raise the share price. As many financial people are now saying, Apple is different from other companies. And it is. That's not fanboyism either. Apple is a cash generation machine like no other. As it grows, it will throw off cash at ever increasing rates.

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.

Quote:
Originally Posted by melgross View Post

It will affect the stock price positively, because investors will think that owning the stock will give them a good chance of getting more dividends, or another distribution. This distribution would only be a one time thing like the Great War was the war to end all wars—until the next one came.

That hasn't happened historically. Investors (particularly institutional ones) are not so easily hoodwinked as you think.

Quote:
Originally Posted by melgross View Post

The situation is that with Apple generating so much cash, another distribution would become necessary after some time, if a fairly large divident wasn't established, and increased on a regular basis.

Again, there's no historical evidence to support that claim.

Quote:
Originally Posted by melgross View Post

See the above, and I think that you should provide evidence that in the case of Apple, your statements would be true. MS is a very different company from Apple, and the lessons learned there, financially, needn't apply here. All the reasons would be different, and you must take that into account.


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.

Quote:
Originally Posted by melgross View Post

I'm not sure that's entirely true. I've read that the tax rate would be more than that for various reasons. But even if it were true, it's still complex. Apple and other companies rarely pay the full rate because of R&D, and other mediating reasons. How would this work out? The rate would still be higher than it would otherwise. We're talking about billions for any particular large company, possibly tens of billions.

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.

Quote:
Originally Posted by melgross View Post

Well, I can agree with that. But, there's little evidence that it would raise the price of the shares, because it rarely ever does, and when it does, it often gets wiped out again as the market moves around. After all, buybacks don't actually increase anything real. It's just an illusion.

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.

Quote:
Originally Posted by melgross View Post

Heh! You should have used the example of MS again because they've done a lot of buybacks, and all during that time, their stock trended downwards. Include inflation, and even With the recent quick rise, it's less than it was ten years ago.

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.

Quote:
Originally Posted by walshbj View Post

I wouldn't have said that. In my opinion if they announce a regular ongoing dividend the stock could move from 585 to as high as 650 tomorrow. I've been holding shares since it was 30 and 60 bucks and I've got a bunch of LEAPs.

I think money would pour in for a dividend.

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.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
Reply
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
Reply
post #135 of 197
Quote:
Originally Posted by melgross View Post

And, a big advantage is that they can use the distribution channels of the drug cartels which are the only distribution methods that are actually better than Apple's.

Don't underestimate the desert mules... you coulda' gotcher new iPad on the 11th
"...The calm is on the water and part of us would linger by the shore, For ships are safe in harbor, but that's not what ships are for."
- Michael Lille -
Reply
"...The calm is on the water and part of us would linger by the shore, For ships are safe in harbor, but that's not what ships are for."
- Michael Lille -
Reply
post #136 of 197
Quote:
Originally Posted by melgross View Post

It's tough to buy Asian and European companies. The governments there aren't happy about that. It's even difficult to learn what these companies are comprised of in Asia. They are part of groups that are very opaque. Their accounting is different from ours, and the laws in most Asian countries allow companies to hide a lot of cash, and debt.

One example. A lot of Japanese and Korean companies own banks. Those banks then make loans to the companies that own them, as well as to companies involved in the groups in which they are part of. But, they also make loans to banks owned by other groups, and receive loans from them. They are all interconnected. It's difficult to pry them apart.

Samsung, as an example, has numerous divisions, and sister companies, all of which issue their own stock. Very confusing as they use different accounting rules.

Apple wouldn't have to buy Samsung or Sharp, just buy enough stock in Samsung, for example, to make them back off copying Apple products, then move all their component purchases to Samsung, driving up its price. Rinse and repeat until Apple essentially controls Samsung.

Why buy a company when for a lot less you can control it.
post #137 of 197
Quote:
Originally Posted by foris View Post

They will buy Greece, Spain and Italy, installing Cook, Forstall and Ives as presidents.

No Idea what they will do with the other $90B though.

Spain and Italy have excellent product designs. Apple could then control "good taste."
post #138 of 197
Quote:
Originally Posted by gijoeinla View Post

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.

I agree with the thrust of your post, except...

I believe that NetFlix (and almost any other) content deals are non-transferrable.

I can see Apple cutting new content deals with owners and broadcasters -- I like the idea, but as others have said -- that's an announcement for another day...

Maybe the jaw dropper is that Apple FCP XI will be announced at NAB on April 14
"...The calm is on the water and part of us would linger by the shore, For ships are safe in harbor, but that's not what ships are for."
- Michael Lille -
Reply
"...The calm is on the water and part of us would linger by the shore, For ships are safe in harbor, but that's not what ships are for."
- Michael Lille -
Reply
post #139 of 197
Quote:
Originally Posted by Woodlink View Post

Anyone here know how many shares are actually outstanding?

I mean come on, if they are going to declare a dividend ... What could it cost?

There are about 900 million shares of Apple outstanding.
post #140 of 197
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
post #141 of 197
Quote:
Originally Posted by jakeb View Post

I don't know, I feel like the current spike *is* the correction. P/E has only finally risen to halfway reasonable levels.

Exactly. There's no downside "correction" to be had with AAPL. What has been happening isn't even a rally as much as It's an upward correction, and there's still more room to go. AAPL is still very undervalued.

Quote:
Originally Posted by charlituna View Post

they wouldn't be having a conference call for something like that. they would just do it.

If they are having this call it is likely that they are either going to pay a dividend or split the stock or some such. or commit part of it to some kind of grant program to help schools get iPads etc into the classroom.

Let's hope they're not dumb enough to hold this call JUST before the markets open, and announce something that investors won't like, like classroom or charity donations, etc. They should just do that and not get investors involved if that's the case. If they're gonna make a big song and dance out of this, they have a responsibility to us to at least make sure that it's something that will be perceived as favorable to investors.

Quote:
Originally Posted by Constable Odo View Post

Ten cents per share dividend. That should shut up the whiners about not getting any dividend. I hope Apple decides to wait until the cash reserve grows to $150 billion and the share price reaches $700 before issuing a dividend and that's what the conference is all about.

Lol. I'm all for that.

Quote:
Originally Posted by melgross View Post

To clear up some of the continuing confusion about tomorrow, this is directly from Apple's investor's page:

I read that as well. In the way Apple's sit officially states it, as funny as it sounds, it seems like Tim Cook saying that "we're just going to sit on it" isn't out of the question. HOWEVER, again, since they've committed to holding a show for it before the markets open, it better be favorable toward investors! Otherwise they could have done us a good service and just done whatever they're gonna do.
post #142 of 197
Quote:
Originally Posted by jragosta View Post

Not me. A dividend does not historically increase the share price of a growth stock. For example, look at the big Microsoft one-time dividend a year ago. The share price dropped by almost exactly the amount of the dividend.

And Microsoft's share price growth has been far lower than Apple's - and MS offers a dividend and Apple does not. There's no evidence that a dividend increases the share price of growth stocks - and people like Warren Buffet are staunchly opposed.



Both terrible examples. In both cases, Apple's success depends on having access to all content and carriers. Choosing only one puts them in competition with key partners.



That's not at all true. A large one-time dividend causes a drop in share price roughly equal to the value of the dividend. If it's an ongoing dividend, there's no evidence that dividends are correlated with share price. Some of the fastest growing stocks (Berkshire Hathaway and AAPL, for example) do NOT pay dividends.

But feel free to provide evidence to support the claim that a dividend generally increases share price.



Not quite true.

They pay taxes in local currency on money earned in other countries. If they repatriate the money, they pay taxes based on US tax rates - BUT they get to deduct the amount paid on foreign countries. So, in effect, if they want the money back in the U.S., the total tax rate they pay will be US tax rates, so there's no double taxation.



Actually, you have it backwards.

A split is shuffling deck chairs. It has absolutely no impact on the ratios or the split-adjusted share price. Evidence is pretty clear that while a split might have a very short term benefit, that goes away quickly.

OTOH, a buy-back has a very real effect. There are 930 M shares in circulation right now. The per-share earnings are $X divided by 930 M. If Apple buys back 30 M shares, then the per-share earnings are $X divided by only 900 M, so earnings per share are increased - permanently.

Whatever multiple the investor uses will be based on the new share price, so the price would increase proportionally. That is, if they buy back 5% of the shares, the share price will increase approximately 5%.

+1 on all points.

Except perhaps the last one: there is no way to predict whether the investor will use the same multiple after as (s)he did before. There are potentially all sorts of things that a buyback could signal that could make the multiple lower, stay the same, or even higher (e.g., signaling the fact that Apple's senior management is very bullish on its future cash flow prospects, and is credibly saying that AAPL is a 'buy' even at $585 and it's putting its money where its mouth is).

Extensive past empirical evidence suggests that, on average, a buyback has positive signaling effects.

My own preference would be: Ideally, a sizable (e.g., $25B) buyback, which would signal management confidence that the stock is headed much higher. If not, a one-time special dividend for the same amount, but shareholders will have to swallow personal taxes (as well as possible implied US taxes on any repatriated earnings). The other problem with the latter is, it's not clear what opportunities are currently available for the shareholders to invest the money elsewhere.

I hope to God they do not announce a 'regular' quarterly dividend. That would be insanity.
post #143 of 197
Quote:
Originally Posted by syracuse View Post

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?

Huh? Care to explain how that arbitrage strategy would work?
post #144 of 197
Call me one of the crazy ones... but just Think Different with me for a second...

Nielsen estimates that the number of U.S. Television Homes is around 115 Million...

Apple has near 100 Billion dollars in the bank...

The cost of the Apple TV to build is near $65...

The cost to provide an Apple TV to every Television Home in the US would be about $7.5 billion dollars... less than 10% of their 100 billion reserve.

Lets speculate that Apple is poised to open the app store on the Apple TV... a 30% cut of every app purchased in 115 million homes... an Apple hardware presence in 115 million homes... a movie rental/purchase platform in 115 million homes... a potential gaming goldmine...

The networks would no longer be able to say no to Apple; it just wouldn't be smart business for them to resist at that point...

I have said it for years... The Apple TV is the most important piece of hardware in Apple's long term strategy... they classify it as a "hobby"... I classify it as the ultimate Trojan Horse...

I wouldn't be surprised if this is Apple's announcement... huge penetration gains in a market Apple is extremely interested in dominating... very low cost with huge returns... it's crazy... but it's just crazy enough to work.
post #145 of 197
How about Apple just outright buy AT&T, fire all current management and replace them with Apple appointees. Then maybe Apple's customers could have a decent wireless carrier for their Apple products, one that treats them with some respect. Thinking just a bit deeper on the subject - it's also the last piece to the iCloud puzzle.

"iOS 5 is the best phone we've ever made..." - Phil Schiller - Special Event September 12, 2012

Reply

"iOS 5 is the best phone we've ever made..." - Phil Schiller - Special Event September 12, 2012

Reply
post #146 of 197
It would be wise for them to buyback stock to maintain talents with stock certificates as incentives. A onetime dividend to shareholders could also be made opening the door for future onetime special dividends.

I would like to see Apple take more ownership in the supply chain by investing in companies that make their components further giving them the edge.

We shall see tomorrow though.
post #147 of 197
Quote:
Originally Posted by Hazzard View Post

The cost to provide an Apple TV to every Television Home in the US would be about $7.5 billion dollars... less than 10% of their 100 billion

Are you suggesting that Apple give away an Apple TV set top box to every American household that wants one in order to gain a better foothold in the television market?

Although not really a bad idea at its core, don't you think the rest of the world would feel just a bit slighted if Apple were to do this only in the U.S.A.?

"iOS 5 is the best phone we've ever made..." - Phil Schiller - Special Event September 12, 2012

Reply

"iOS 5 is the best phone we've ever made..." - Phil Schiller - Special Event September 12, 2012

Reply
post #148 of 197
Quote:
Originally Posted by Hazzard View Post

Call me one of the crazy ones... but just Think Different with me for a second...

Nielsen estimates that the number of U.S. Television Homes is around 115 Million...

Apple has near 100 Billion dollars in the bank...

The cost of the Apple TV to build is near $65...

The cost to provide an Apple TV to every Television Home in the US would be about $7.5 billion dollars... less than 10% of their 100 billion reserve.

Lets speculate that Apple is poised to open the app store on the Apple TV... a 30% cut of every app purchased in 115 million homes... an Apple hardware presence in 115 million homes... a movie rental/purchase platform in 115 million homes... a potential gaming goldmine...

The networks would no longer be able to say no to Apple; it just wouldn't be smart business for them to resist at that point...

I have said it for years... The Apple TV is the most important piece of hardware in Apple's long term strategy... they classify it as a "hobby"... I classify it as the ultimate Trojan Horse...

I wouldn't be surprised if this is Apple's announcement... huge penetration gains in a market Apple is extremely interested in dominating... very low cost with huge returns... it's crazy... but it's just crazy enough to work.


That's a fun scenario to consider. LOL. Of course it would take them a couple of years to ramp up production to fill that order. The antitrust issues of wiping out their smaller competitors by giving away free products would be crazy.
post #149 of 197
Quote:
Originally Posted by silverpraxis View Post

Repatriate it and pay some taxes. They have been on a streak talking about job creation in the US. If they repatriated any substantial amount, they could brag about helping the gov't too.

This.
post #150 of 197
Quote:
Originally Posted by Rockarollr View Post

Are you suggesting that Apple give away an Apple TV set top box to every American household that wants one in order to gain a better foothold in the television market?

Although not really a bad idea at its core, don't you think the rest of the world would feel just a bit slighted if Apple were to do this only in the U.S.A.?


Good Point.... since it's just crazy speculation... Free Apple TVs for the World
post #151 of 197
Lots of good discussion here...

I see establishment of a $15 billion Steve Jobs Apple Foundation...

Details at 6 AM PDT...
"...The calm is on the water and part of us would linger by the shore, For ships are safe in harbor, but that's not what ships are for."
- Michael Lille -
Reply
"...The calm is on the water and part of us would linger by the shore, For ships are safe in harbor, but that's not what ships are for."
- Michael Lille -
Reply
post #152 of 197
Quote:
Originally Posted by gijoeinla View Post

Wow

Read all the posts.

Seems majority believe in a dividend and or a split over a buy back.

I support that but...am in Hollywood...work in the entertainment industry and for my money two acquisitions (not that they'd announce it tomorrow) make a whole lotta sense to some of us here.

1) Netflix - Why? Content deals. Apple needs to secure it's position in this arena IF it's gonna go balls out in the TV Content world. Strange that suddenly you can now pay for your sub's in itunes. Just sayin.

2) Sprint - Why? Wireless is the future. Again if you were Apple and going full on into the TV arena and your not getting cooperation from content providers who (some) happen to also control the content pipes into our homes then you'd make a run for a pipe provider giving you access into homes wirelessly. As we heard, Apple is at first base and getting ready to roll out a major boost to WIFI delivery...The only way I see Apple gaining cooperation with content providers and developers like my employer is by having direct access. Thoughts?

this makes perfectly good sense.
post #153 of 197
APPLE buying SAMSUNG??? They should be so lucky
post #154 of 197
Quote:
Originally Posted by BUSHMAN4 View Post

APPLE buying SAMSUNG??? They should be so lucky

It's Disney. Otherwise, why did Apple withdraw from competing with ESPN on the rights to European football (soccer)? It does not need to compete for content if it can just buy the content producer/holder (Disney). It's all about content.
post #155 of 197
Quote:
Originally Posted by Constable Odo View Post

I hope Apple decides to wait until the cash reserve grows to $150 billion and the share price reaches $700 before issuing a dividend and that's what the conference is all about.

By my calculation that should be in about a month and a half. And I'm not kidding.
post #156 of 197
I'm giddy with excitement!

Reminds me of the scene from Die Hard 2 where after stealing a bunch of gold, the leader declares, "Tomorrow, we decide which country we want to buy!"

But in all seriousness, It's clear that Apple intends to buy more than one country. I say start with the little ones, perhaps island nations, and grant senior Apple executives lifetime presidential status as non-cash compensation for their dedicated work.

I then suspect Apple will acquire some tactical nuclear weapons and aim them towards Mountain View, CA and Seattle, WA, just in case someone gets a few bright ideas.

The fun wouldn't stop there, as the company will undoubtedly unveil its biggest secret to date: Steve Jobs has secretly been living in stasis and all of their billions of dollars will now be devoted to medical research that will revive our fearless leader.

Okay... maybe I went a bit too far with that last one.

On a truly serious note, I don't see the reason why Apple would choose this moment to initiate a stock buy back, dividend, or stock split. There have been plenty of opportunities in the past, but I don't see what's changed now that would prompt any of these moves other than the size of the stock pile has grown. On the issue of stock buy backs, it's not as though Apple's share price is hurting and needs to be buoyed; the stock is on a tear. On the issue of a stock split, this also seems unnecessary since it has no impact on Apple's cash reserves. It's hardly necessary to hold a news conference just to announce a stock split. On the issue of a dividend, I guess there is the possibility that they will rush to pay one before the expiration of current reduced tax rates on dividends, but that hardly seems like a compelling reason to pay one. I would assume that Apple will continue doing well for some time to come and anything paid out on a special dividend will be earned back in the coming quarters and years, at which point, there is no guarantee that the tax treatment of dividends will be any more or less favorable. So aiming for a dividend purely on the basis of tax rates also seems unlikely. Beyond that, the stock doesn't really need any additional help anyway. Announcing a regular dividend might finally bring in large institutional investors that are seeking income on their holdings, but it doesn't seem like AAPL is in need of them either... These next 7 hours are going to be torture.
post #157 of 197
It must be a nice problem to have: We have too much money!

I am quite fascinated by the possibilities, though. From reading the thread, it sounds (to me -- and I have no idea what I'm talking about) that the special dividend might be likely.

It doesn't seem like there are any acquisitions that would have any true effect on the amount of cash they have on hand. A dividend doesn't *seem* to make sense, at least from what people here are saying.

The funny thing is, even if they pay out this special dividend, they are going to be in the same boat again, soon.

Right?
post #158 of 197
I think they're going to announce a the investment of their Main Campus on the company bottom line, a few more acquisitions and investment in advanced Materials Research Firms amongst other component manufacturing as a start.
post #159 of 197
you fools ain't thinking' big enough.

They're gonna launch a satellite system. iOs devices will no longer be constrained to towers, local telecoms, borders, or even dry land.

Free worldwide communication, a whole new non-terrestrial internet, and the price of admission is the apple device you buy to use it.
post #160 of 197
Quote:
Originally Posted by KingKuei View Post

I'm giddy with excitement!

Reminds me of the scene from Die Hard 2 where after stealing a bunch of gold, the leader declares, "Tomorrow, we decide which country we want to buy!"

But in all seriousness, It's clear that Apple intends to buy more than one country. I say start with the little ones, perhaps island nations, and grant senior Apple executives lifetime presidential status as non-cash compensation for their dedicated work.

I then suspect Apple will acquire some tactical nuclear weapons and aim them towards Mountain View, CA and Seattle, WA, just in case someone gets a few bright ideas.

The fun wouldn't stop there, as the company will undoubtedly unveil its biggest secret to date: Steve Jobs has secretly been living in stasis and all of their billions of dollars will now be devoted to medical research that will revive our fearless leader.

Okay... maybe I went a bit too far with that last one.

On a truly serious note, I don't see the reason why Apple would choose this moment to initiate a stock buy back, dividend, or stock split. There have been plenty of opportunities in the past, but I don't see what's changed now that would prompt any of these moves other than the size of the stock pile has grown. On the issue of stock buy backs, it's not as though Apple's share price is hurting and needs to be buoyed; the stock is on a tear. On the issue of a stock split, this also seems unnecessary since it has no impact on Apple's cash reserves. It's hardly necessary to hold a news conference just to announce a stock split. On the issue of a dividend, I guess there is the possibility that they will rush to pay one before the expiration of current reduced tax rates on dividends, but that hardly seems like a compelling reason to pay one. I would assume that Apple will continue doing well for some time to come and anything paid out on a special dividend will be earned back in the coming quarters and years, at which point, there is no guarantee that the tax treatment of dividends will be any more or less favorable. So aiming for a dividend purely on the basis of tax rates also seems unlikely. Beyond that, the stock doesn't really need any additional help anyway. Announcing a regular dividend might finally bring in large institutional investors that are seeking income on their holdings, but it doesn't seem like AAPL is in need of them either... These next 7 hours are going to be torture.

About AAPL stock price. The correction has been swift so far this year, but the stock is still extremely cheap and lagging behind company performance, and will be even more cheap once the upcoming quarters ring in. I'm not "predicting" a buy-back, but I think that people need to realize that especially with such a careful company like AAPL.... they won't just one day think "hey, the stock is down lately, we're gonna buy some". I think it's more likely a decision that they will take seriously, and have meetings, votes, sleep-on-its, etc. By the time they're ready to do it, the stock may have rushed up $200 while it's trying to catch up to a fairer P/E value.... however, I don't think that Apple is trying to wheel and deal their own stock here.... I'm sure that if they decide that they want to buy back, they will buy back, and the stock is still VERY cheap relative to the company performance (all that matters).

The next several hours will be torturous on AAPL investors indeed. I bet shorters are sh*tting bricks right now. The stock will probably be deep into the red or green tomorrow, with a small likelihood of whatever is announced being a smooth and moderate sail (though, it can happen), allowing the stock to fluctuate "normally".

Regardless of what happens, Longs are in the clear, just inevitable day to day movements, however, shorters can lose or win big on it. This is an interesting scenario for all, however, as I don't remember Apple ever doing something so Wall Street-centric.
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: AAPL Investors
AppleInsider › Forums › Investors › AAPL Investors › Apple to host conference call Monday to discuss its $100B cash balance