Apple to host conference call Monday to discuss its $100B cash balance - Page 5

“Investors are coming to suspect that Sharp’s slump is more serious than thought,” said Makoto Kikuchi, chief executive officer at Myojo Asset Management Co. in Tokyo. “There is a concern over possible fundraising as losses are expected to continue next year.”

Sharp doesn’t have any promising business large enough to pull the company out of its slump

Originally Posted by mdriftmeyer

[Microsoft] overly split the stock to a point now that it will never go up for squat.

Originally Posted by Commodification

Sharp Corp of Japan needs cash badly and Apple can pick them up cheap right now. This would help Apple detatch themselves from Samsung and give them their own large manufacturing facilities and even solar panel production for the roofs of their Apple Stores, new HQ, existing offices, and iCloud data centers.

If Sharp became financially unstable, that could be very dangerous for Apple right now. While Apple might not buy them outright, a huge percentage stake does make sense for many reasons.

http://www.bloomberg.com/news/2012-0...rt-of-day.html

Originally Posted by SolipsismX

I'd like a stock buy back and for Apple to announce plans to split the stock. I'm expecting a dividend and an announcement of how successful this weekend's iPads were.

edit: I withdraw my buyback comment for a time when the stock market is suffering.

Originally Posted by jd_in_sb

Let's hope Apple just keeps it in the bank. Times will be tough one day. Guaranteed. History has proven that again and again.

Originally Posted by jragosta

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



Irrelevant-it doesn't matter why they did it. The fact is that Microsoft's large one-time dividend decreased share price by roughly the amount of the dividend and the same has historically been true.

For example, look at dividends issued for mutual finds. Invariably, the mutual fund drops by roughly the amount of the dividend on the ex-dividend date.

It is explained here:
http://www.ehow.com/info_8159878_eff...are-price.html
"On the ex-dividend date, the share price will open at the previous day closing price minus the amount of the dividend."

But feel free to provide evidence to support your claim that a dividend would raise the share price.



Historically, you're wrong. Almost every time there has been a large one-time dividend (either mutual funds or stocks), the share price dropped by roughly the amount of the dividend -and that's exactly what basic principles would predict. Please show a single example where a large one-time dividend increased share price. There aren't any.

As for a steady dividend, there is also no evidence that it would increase dividends. In fact, if you look at historical values, dividend paying stocks tend to grow more slowly than non-dividend stocks because a company generally starts issuing a dividend when it is no longer growing. (There are exceptions. First, dividends tend to increase share value in emerging markets. There are studies in Pakistan and early in China's market history which confirm this. But the effect fails in developed markets. Second, if the company is a slow-growing, very mature stock, a dividend can have a positive effect, but that doesn't apply to Apple).

That's not to say that it would happen in this case, but there is absolutely no evidence that issuing a dividend would increase share price.



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



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




I can't prove what would happen in the case of Apple. What I can show is that every time there's a large dividend, the share price drops on the ex-dividend date. That's true whether it's a stock or a mutual fund.



Possibly, but the point is that the TOTAL tax Apple would pay on repatriating earnings would not be any greater than if the money were earned in the U.S.



Again, you're wrong. Share buybacks DO increase the average share price - because there are fewer shares in circulation. It's simple math.

Or perhaps you're arguing that the multiple that investors use would be LOWER if Apple buys back shares? That's completely illogical. You're arguing that the investors would pay a GREATER multiple of Apple pays a dividend, leaving the same number of shares in circulation, but a lower multiple if they're taking share out of circulation. That just isn't a rational argument.



Again, forget Microsoft. Look up any other company that did a large one-time distribution. Or look up any mutual fund which did a large distribution. The share price drops by the amount of the distribution on the ex-dividend date.



Good thing no one would be investing based solely on your opinion. That would be completely irrational. Why in the world would the share price go up 15% if they announce an on-going 2% dividend? Furthermore, as pointed out above, there's no evidence that initiating a dividend causes ANY long term share price effect. But feel free to try to support your claim.

Originally Posted by mcarling

MSFT will never increase significantly in value because Microsoft will never again enjoy rapid earnings growth. Splitting the stock has nothing to do with it.

Apple could announce a 10 for 1 stock split and the effect on market cap would be negligible. The advantage of a stock split is that it would slightly increase liquidity for small investors, leading to negligible upward pressure on stock price. The disadvantage is that it would increase commissions for some investors, leading to negligible downward pressure on stock price. Which effect would be greater is anyone's guess. We can only say that the effect would be negligible.

Originally Posted by mdriftmeyer

[Microsoft] split the stock 9 times. They've issued a dividend 33 times since their last split of 2002.

Microsoft on it's rise and massive split to generate low stock prices for more buy in which allowed them to smother and buy out competitors resulted in a race to the bottom PC Market with them the only OEM in town.

Originally Posted by SolipsismX

How about buying a big ass laser and rights to the moon's surface to carve out an Apple logo on it? I think $100 billion could achieve that.

Originally Posted by Jimbo1234

I think it will likely be a divdend or buy back. Tim's way of putting down a marker now he's in charge.

However I would like to see some major acquisitions intstead. ARM or Samsung would do nicely.

I know it wouldn't happen

Originally Posted by Hazzard

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.

Originally Posted by Techboy

The worst idea would be to pay dividends. Some analysts are quoted saying this would be great idea.... Apple should ditch Wall Street and go private with that cash. This $100 billion cash puts Apple in a great position to compete and the resources to invest in research. As soon as they hand out that cash, they'll go down that long gray road towards craptastic again.

I think Steve Jobs would never do it just to please Wall Street. A hard lesson he learned from being kicked out of Apple the first time.

Originally Posted by syracuse

jragosta, is at it again...

You do realize that if a stock didn't drop the amount of the dividend after ex-date their would be an ARBITRAGE that would be exploited by hedge funds?

Come on guy stop being so pedantic, and STOP with the Microsoft comparisons.

APPLE IS NOT MICROSOFT

Originally Posted by walshbj

Jragosta-
Those quotes aren't mine, can you please fix your post and credit them to whoever made them??

Originally Posted by Shaun, UK

I hope they don't announce a dividend and give it all away to already wealthy bankers.

Use it for major acquisitions to help their customers: Sony, Sharp, Samsung, Adobe, Twitter, Cable Companies, Become a MVNO, etc.

I think most of the cash is held outside the US so they would have to buy non US companies to avoid tax.

This has certainly perked up my Monday morning lol

Originally Posted by gijoeinla

I disagree with your arguments regarding my post.

1). Is it not true that THE hottest topic in the analytical world is Apple is coming forward with a brand new connected device for the home by the end of the year. Is it not true that there has been a flood of information "claiming" Apple is having trouble getting content providers on board with "a new service" Apple plans to provide with this device? Notice I'm not using the word TV.
Just answer...True?

2). Content is King. Remember that statement. In certain circles here in LA it's pretty likely Apple itself is going to start if not already acquiring content. You don't have access to that information - I do.

3) Why o why would Apple NOT make a play into Netflix -- it's for the CONTENT deals Doh! It's not the subs their looking for...Gee. Apple got 300 million SUBS of it's own, duh.

4) If Apple can't get ANY major content companies to open up a totally new CONTENT delivery stream for their "new device" then WTF are they gonna offer? Only APP content? Yea right.

5) Um, they already ARE competitors in many revenue arenas against people like ATT and VERIZON, DirecTV, Dish and so on.... it's called iTunes and it involves CONTENT distribution.

Apple MUST make a move in this arena, and soon if it's gonna seriously launch a new device that is supposed to "remake the TV experience". You can't do that by adopting OLD strategies.

So chill.

Originally Posted by syracuse

jragosta, is at it again...

You do realize that if a stock didn't drop the amount of the dividend after ex-date their would be an ARBITRAGE that would be exploited by hedge funds?

Come on guy stop being so pedantic, and STOP with the Microsoft comparisons.

APPLE IS NOT MICROSOFT

Originally Posted by jragosta

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



Irrelevant-it doesn't matter why they did it. The fact is that Microsoft's large one-time dividend decreased share price by roughly the amount of the dividend and the same has historically been true.

For example, look at dividends issued for mutual finds. Invariably, the mutual fund drops by roughly the amount of the dividend on the ex-dividend date.

It is explained here:
http://www.ehow.com/info_8159878_eff...are-price.html
"On the ex-dividend date, the share price will open at the previous day closing price minus the amount of the dividend."

But feel free to provide evidence to support your claim that a dividend would raise the share price.



Historically, you're wrong. Almost every time there has been a large one-time dividend (either mutual funds or stocks), the share price dropped by roughly the amount of the dividend -and that's exactly what basic principles would predict. Please show a single example where a large one-time dividend increased share price. There aren't any.

As for a steady dividend, there is also no evidence that it would increase dividends. In fact, if you look at historical values, dividend paying stocks tend to grow more slowly than non-dividend stocks because a company generally starts issuing a dividend when it is no longer growing. (There are exceptions. First, dividends tend to increase share value in emerging markets. There are studies in Pakistan and early in China's market history which confirm this. But the effect fails in developed markets. Second, if the company is a slow-growing, very mature stock, a dividend can have a positive effect, but that doesn't apply to Apple).

That's not to say that it would happen in this case, but there is absolutely no evidence that issuing a dividend would increase share price.



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



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




I can't prove what would happen in the case of Apple. What I can show is that every time there's a large dividend, the share price drops on the ex-dividend date. That's true whether it's a stock or a mutual fund.



Possibly, but the point is that the TOTAL tax Apple would pay on repatriating earnings would not be any greater than if the money were earned in the U.S.



Again, you're wrong. Share buybacks DO increase the average share price - because there are fewer shares in circulation. It's simple math.

Or perhaps you're arguing that the multiple that investors use would be LOWER if Apple buys back shares? That's completely illogical. You're arguing that the investors would pay a GREATER multiple of Apple pays a dividend, leaving the same number of shares in circulation, but a lower multiple if they're taking share out of circulation. That just isn't a rational argument.



Again, forget Microsoft. Look up any other company that did a large one-time distribution. Or look up any mutual fund which did a large distribution. The share price drops by the amount of the distribution on the ex-dividend date.



Good thing no one would be investing based solely on your opinion. That would be completely irrational. Why in the world would the share price go up 15% if they announce an on-going 2% dividend? Furthermore, as pointed out above, there's no evidence that initiating a dividend causes ANY long term share price effect. But feel free to try to support your claim.

\tWhile Apple ended last year with a cash balance of $97.6 billion, it cannot easily gain access to most of that for a dividend because roughly 66 percent of the money is held by its foreign subsidiaries. To bring that cash back to the United States, Apple would have to pay hefty repatriation taxes, very likely more than 30 percent.

Originally Posted by melgross

You should learn how to quote properly. Most of them here are wrong. Some are mine.

At any rate, there is no proof for any of what you say, just opinions. I've seen stock prices move up and down over the almost 50 years I've been investing. The reasons vary, and many of them are not rational. I've seen stocks move up because of a dividend, and down.

The problem with your argument is that you don't understand how this works for different companies. I'm not surprised, because it seems as though most financial people don't either.

An example of that is your error about taxes. From the NY Times article about this, this morning:

Originally Posted by Dick Applebaum

I can't find a link, but, AIR, Apple said that they have paid taxes or set aside money to pay taxes on some of their overseas income.

Trading suspended on a AAPL at $599 and change.

Originally Posted by JeffDM

Weren't you the one that said the stock was going to drop if they didn't announce a dividend at the previous shareholder's meeting?

Originally Posted by syracuse

Tim Cook, at the shareholder's meeting, pretty much telegraphed to the market that they were going to issue a dividend and stock buyback...

Tim Cook: “On cash, we’ve been thinking about cash very deeply, the board has been looking into what is in shareholders’ best interest … We’ve spent billions on … Supply chain, retail, etc …. My message there is that the board and the management team are thinking about this very deeply … And we will do what we think is in the best interest of shareholders."

In year's past they were very dismissive about discussing uses for their growing cash balance.

Originally Posted by JeffDM

Still, it was not an announcement or commitment, taking anything short of that is goal post moving. It's hard to get anything more non-committal in those comments.

Originally Posted by jragosta

Sorry, but a dividend goes to ALL investors - not just the wealthy ones. Besides. The money belongs to the investors so why shouldn't they be entitled to it?