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Apple to spend $45B over 3 years on dividend & share repurchase program - Page 5

post #161 of 183
Quote:
Originally Posted by anantksundaram View Post

As I said, you need to ponder the difference.... I don't know how else to explain this!

The difference is obvious. What's not obvious is why one would except something new, that hasnt been issued, to be diluted over the past decade. The value to the stock holder starts when the dividend is issued, not at some prior date. You get $10.60 per share per year until they say otherwise. It's that simple.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #162 of 183
Quote:
Originally Posted by jragosta View Post

You clearly don't understand share repurchases.

What I clearly don't understand is how many posters here feel that only they understand share repurchases, or why Apple did it in the first place.

Until they spell it out in print, who knows for sure?
Pity the agnostic dyslectic. They spend all their time contemplating the existence of dog.
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Pity the agnostic dyslectic. They spend all their time contemplating the existence of dog.
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post #163 of 183
Quote:
Originally Posted by justflybob View Post

What I clearly don't understand is how many posters here feel that only they understand share repurchases, or why Apple did it in the first place.

Until they spell it out in print, who knows for sure?

They've already did that. I heard them say in the conference call that they did it to prevent any more share creep as they issue more new shares for employee compensation.
post #164 of 183
Quote:
Originally Posted by melgross View Post

They've already did that. I heard them say in the conference call that they did it to prevent any more share creep as they issue more new shares for employee compensation.

Can you explain how this share creep occurs? I think most of us get the other points but the "dilution" stuff, I don't understand at this stage, not without spending a few hours on Google.

However, given the opportunity now, I need to make a decision fairly quickly over the next few days.
post #165 of 183
Quote:
Originally Posted by AppleInsider View Post

Later this year, Apple will initiate a dividend and share repurchase program, spending $45 billion over the next three years, the company announced on Monday.

Apple's new quarterly dividend will amount to $2.65 per share. Assuming it is approved by the company's board of directors, it will be initiated at some point in the company's fourth quarter of fiscal 2012, which begins on July 1 of this year.

The dividend will be joined by a $10 billion share repurchase program that will start with Apple's fiscal 2013. The share repurchase program has already been authorized by the company's board of directors.

Apple plans to repurchase shares over three years, with the primary objective to neutralize the impact of dilution from future employee equity grants and employe stock purchase programs.

"We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure," Apple Chief Executive Tim Cook said. "You'll see more of all of these in the future. Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business. So we are going to initiate a dividend and share repurchase program."

More details on the new initiatives will be discussed during a conference call that Cook and Apple Chief Financial Officer Peter Oppenheimer will participate in at 9 a.m. Eastern, 6 a.m. Pacific Monday morning. The company will not, however, provide any updates on its current quarter, and no topics other than cash will be discussed.

"Combining dividends, share repurchases, and cash used to net-share-settle vesting RSUs, we anticipate utilizing approximately $45 billion of domestic cash in the first three years of our programs," Oppenheimer said. "We are extremely confident in our future and see tremendous opportunities ahead."

[ View article on AppleInsider ]

I am really disappointed in this move. Thy could have made a big claim for ethical business by investng it in Foxconn's employee conditions or charity organisations....how many billins do these sareholders need after all?? Seems very greedy even as a capitalist myself....disappointing.
post #166 of 183
Next, Apple announces a 7 inches tablet and a 200$ laptop?

I thought SJ was adamant about not paying dividends, so how come it is now the "right thing to do" because investors "demand" it?

I remember very well what happened to that company SJ admired: "HP".
It did what the wise investors wanted it to do. Served it reaaaally well.

Time to sell APPL is coming...

Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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post #167 of 183
Quote:
Originally Posted by anantksundaram View Post

You do need to ponder the difference between "Based on my buy in I'll be earning over 10% per year on my initial investment.." and "Based on my buy in I'll be earning over 10% per year on my initial investment after I spent 10 years waiting for it."

That is, average return per year after 10 years, right?
post #168 of 183
Quote:
Originally Posted by lightknight View Post

Time to sell APPL is coming...

Great, now I'm going to have to come up with ten different "doom and gloom" reaction images so that I don't get bored of posting a single one ten thousand times.

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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post #169 of 183
Quote:
Originally Posted by melgross View Post

Stock splits do little. It's an illusion. Most of Apple's stock is held by institutions who can not one whit about the share price. Most of the rest is held by large individual investors who don't care either. With the dividend, more will be bought by institutions, but now by the ones that can only, by charter, by instruments that throw off dividends. So, Apple's stock will be held by even more institutions.

It's held by institutions to the tune of about 72%. The average is 77%. So now, Apple's stock will move closer to that larger percentage over the next few months.

The buyback isn't for the usual reasons. It's intended to keep the number of shares stable.

Missed this one, sorry.

Unlike you and Dick, some of us here still have to work for a living....

But what about all the AAPL stock held in mutual funds? Do you consider them to be "institutional" as well? Aren't they held to a different standard of their prospectus, versus say a hedge fund or pension fund, and aren't they the ones that have been clamoring for a dividend?
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Pity the agnostic dyslectic. They spend all their time contemplating the existence of dog.
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post #170 of 183
Quote:
Originally Posted by melgross View Post

They've already did that. I heard them say in the conference call that they did it to prevent any more share creep as they issue more new shares for employee compensation.

And I suppose that is a good thing. But there will always be others that disagree. And that was the point of my original response.

I wasn't able to hear the call. Still a working stiff with far too many other concerns going on during the day.
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post #171 of 183
Quote:
Originally Posted by sunilraman View Post

Can you explain how this share creep occurs? I think most of us get the other points but the "dilution" stuff, I don't understand at this stage, not without spending a few hours on Google.

However, given the opportunity now, I need to make a decision fairly quickly over the next few days.

More shares are issued to pay for employee compensation plans, so the number of shares keep going up. It was at 917 million not long ago. A few years ago, it was in the mid 800 millions.

I'm not one who cares a hoot about the dilution, because it's wiped out by Apple's growth. I know that a couple of people here will again disagree with me on this, but a lot of what we read about shareholder equity and dilution is wrong. In theory, it's right, but in practice, it makes little matter—IF the company involved is either doing very well, or very poorly. That's always the way it works on the normal curve express.

So for most companies squeezed together around the top of the curve, in other words, the average company, dilution of shareholder equity could make a difference in share price, but not by much. But for the companies on the opposite ends of the curve, it works differently. If a company is doing poorly, like say, HP had been doing, then their stock may go down based on the performance of the company, but not much will change if they do stock buybacks to slow dilution resulting from a deterioration of their cash position and profits. The stock will still tank, as it did.

Apple is in the opposite position on the curve. With its increasing sales and profits, the stock will rise even if dilution occurs, and they do nothing to counteract it.

I've always felt, from seeing real world results, that stock buybacks, unless done for the purpose of employee compensation, is a complete waste of money. It's money thrown away.
post #172 of 183
Quote:
Originally Posted by stelligent View Post

That sounds right (don't understand anyone who disputes this interpretation). Here's what I don't get - $10B to buy back shares that will (might?) be distributed to employees. $10B worth of stock/options for employees?

Not all at once. But I think I read that there are about 13 million shares that will be exercised by employees over some future dates.
post #173 of 183
Quote:
Originally Posted by cggr View Post

I am really disappointed in this move. Thy could have made a big claim for ethical business by investng it in Foxconn's employee conditions or charity organisations....how many billins do these sareholders need after all?? Seems very greedy even as a capitalist myself....disappointing.

That's nonsense! It's not a customers business to do that. Except for political correctness, it's not Apple's business at all to try to do anything other than to get the best pricing for themselves.

It's up to the Chinese government to force better working conditions. Since the government hasn't been interested in doing that (in fact, the evidence is that they've been opposed to it), why should foreign corporations do so? Forget whatever moral value YOU put on it. That's of no importance.
post #174 of 183
Quote:
Originally Posted by lightknight View Post

Next, Apple announces a 7 inches tablet and a 200$ laptop?

I thought SJ was adamant about not paying dividends, so how come it is now the "right thing to do" because investors "demand" it?

I remember very well what happened to that company SJ admired: "HP".
It did what the wise investors wanted it to do. Served it reaaaally well.

Time to sell APPL is coming...

You have to understand what happened, and what's happening. When SJ came back to Apple, they were considered to be no more than a few months away from bankruptcy. As he slowly got the company back on its feet, he felt that it needed a big satchel of cash so that possibliy could never happen again. When asked, during the early stages of the last recession, why Apple retained so much cash he answered: "So we can invest in R&D and come out with great new products as the recession ends, whereas our competitors will be rebuilding their R&D." Of course, that was paraphrasing.

But now, Apple is so rich, it was described in an article yesterday about the dividend, as being "stupid rich", that they can't use all of that cash. And it's earning less than inflation, so the more they hold, the more they lose. May as well give some of it back.

Apple will spend about $45 billion on the dividend and buyback plans over the next three years. They will generate at least $40 billion in cash this calender year, and as much as $60 billion.

Are you really concerned about that?
post #175 of 183
Quote:
Originally Posted by justflybob View Post

Missed this one, sorry.

Unlike you and Dick, some of us here still have to work for a living....

But what about all the AAPL stock held in mutual funds? Do you consider them to be "institutional" as well? Aren't they held to a different standard of their prospectus, versus say a hedge fund or pension fund, and aren't they the ones that have been clamoring for a dividend?

Yes, mutual funds are institutions. And they differ as well. There are many mutual funds, and you can choose one that meets your expectations in investment philosophy. I prefer to do all my own investing though.

The institutions that have been "clamoring" for a dividend, are those that, by charter, can only buy stock that throws off a dividend. They have been missing the stock rise, and are frustrated about it, but can't do anything about it, as they aren't allowed to buy in. Now, they will buy Apple stock. Apple is a blue chip stock. It wasn't always thus. But there are some very strange investing philosophies out there.
post #176 of 183
Quote:
Originally Posted by justflybob View Post

And I suppose that is a good thing. But there will always be others that disagree. And that was the point of my original response.

I wasn't able to hear the call. Still a working stiff with far too many other concerns going on during the day.

Apple has it on their site. You can still listen. It was very short, about 23 minutes.
post #177 of 183
Quote:
Originally Posted by melgross View Post

Apple has it on their site. You can still listen. It was very short, about 23 minutes.

Ugh. I forgot about about that. Will do, thanks.

Perhaps my next dental checkup?
Pity the agnostic dyslectic. They spend all their time contemplating the existence of dog.
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Pity the agnostic dyslectic. They spend all their time contemplating the existence of dog.
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post #178 of 183
Quote:
Originally Posted by justflybob View Post

Ugh. I forgot about about that. Will do, thanks.

Perhaps my next dental checkup?

I wish it was just a checkup.
post #179 of 183
Quote:
Originally Posted by cggr View Post

I am really disappointed in this move. Thy could have made a big claim for ethical business by investng it in Foxconn's employee conditions or charity organisations....how many billins do these sareholders need after all?? Seems very greedy even as a capitalist myself....disappointing.

That is absolute rubbish. I really hope you weren't born yesterday and that was a troll post....?

Quote:
Originally Posted by lightknight View Post

Time to sell APPL is coming...

Oh, that's gem as well. I'd love to hear logical and fundamental reasons as to why that would be the case, within, say, the next couple of years, WITHOUT emotive, idealistic, "S.J would have wanted this" unproven and unverified speak.
post #180 of 183
About the share accumulation due to compensation. I know a few of you find it hard to believe that it can cause such a large increase, but it does. Here's a good article about it:

http://www.asymco.com/2012/03/20/tim...o+%28asymco%29
post #181 of 183
Quote:
Originally Posted by melgross View Post

I wish it was just a checkup.

"Alex, I'll take Root Canals for $1,800"
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Pity the agnostic dyslectic. They spend all their time contemplating the existence of dog.
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post #182 of 183
Quote:
Originally Posted by justflybob View Post

"Alex, I'll take Root Canals for $1,800"

Try, extractions, implants, caps, etc.
post #183 of 183
An article about Apple's dividend and buyback, and how it should affect the stock price (and more).

http://seekingalpha.com/article/4482...ts-and-economy
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