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

post #81 of 183
3/19/12 at 7:58am
Quote:
Originally Posted by anantksundaram View Post

The average dividend yield in the US stock market is at about 2%. (So Apple is right about at the average.) A vast majority of the historical gains from owning shares has come from capital gains, not dividends.

I think you have an excessively cynical view of stock markets. Perhaps it's not for you. I am simply pointing out a fact.

I wasn't trying to be cynical. I didn't realise stock yields were that low in general. I always thought people owned stocks for the dividends rather than the share price.

I don't invest in the stock market because I simply don't know enough about it to feel confident of not making a mistake. I follow Apple every day so I should have seen the big rise coming and invested a year ago but I used the money to set up a business instead so I can't complain.

I don't like the way analysts and banks manipulate the stock for their own gain. I would rather see dividends plus small monthly gains taking the stock price up gradually so that small investors see a gradual return on their investment and speculators are forced out.
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post #82 of 183
3/19/12 at 8:00am
Quote:
Originally Posted by melgross View Post

You'll have to look at the Times article today in the business section. But the quote was this:



I don't know if they're talking about 30% more than the average of their foreign tax rate, or an actual 30% of the total. Whichever it is, it's a lot.

Thanks for the quote!

Are there any international corporate tax specialists out there that understand this and can 'splain it to us, the hoi polloi?
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post #83 of 183
3/19/12 at 8:00am
Quote:
Originally Posted by anantksundaram View Post

If they have to bring their money back, then you would be right. The fact that an estimated $1.2 trillion of US corporate cash (of an estimated total of $2 trillion) being held outside the US by companies tells me that they think $800B is plenty for whatever it is they want to do at home.

Indeed, most of the growth opportunities - and hence, investment needs - are abroad, rather than in mature economies such as the US.

And most of Apple's investments in plant and equipment for companies making their stuff, is abroad. Of course, those are really just upfront loans that result in big discounts and guaranteed supply, but still, it's cash being used.

They do invest here too though. Supposedly half the cost of building that giant Samsung plant in Texas to build Apple's SoC's was paid for by Apple.
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post #84 of 183
3/19/12 at 8:04am
Quote:
Originally Posted by NOFEER View Post

found some answers to my questions

how do investors benefit with a stock buy back

http://beginnersinvest.about.com/od/.../aa091806a.htm

That doesn't really apply. That discusses a share buy back where shares are taken out of circulation. Apple is not going to take shares out of circulation- they are going to reissue them, so it doesn't generate any of the benefits of a share buy back. It is no different than if Apple paid their employees with cash and the employees bought shares on the open market.

Quote:
Originally Posted by melgross View Post

Yeah. But a lot of that is Voodoo. The point is that generalizations about this, as with most other things, doesn't help in an individual situation. It isn't even correct in a number of ways.

Generally, share repurchasing is done to lift shares that are tottering, by supposedly showing that management has confidence that share prices will go higher in the future. Of course, in reality, is says no such thing. If management purchased those shares with their own money, THEN it would say something. But even then, management can be wrong, and often has been.

With Apple, it's different. While I'm against share repurchaseing in principle, Apple has done it for a reason that really isn't saying that their shares should be worth more, and so this is going to prove they mean it. They are buying simply to equalize out the share growth over the years. Is that needed? I really don't think so, but it's not the worst thing.

The problem with share repurchasing is that it throws money away. It's GONE! Nothing can be done with it. And for most companies doing it, it doesn't result in share price accumulation over the long term.

That's why I prefer a dividend, or a disbursement. The money is actually going somewhere. It isn't being burned.

You clearly don't understand share repurchases. If it is a true share repurchase (the shares are removed from circulation), the gain is that there are fewer shares in circulation. So if a company removes 10% of the shares from circulation, the per share income goes up by 10%. If the multiple remains the same, the share price would also go up by 10%.

The money is no more 'gone' than share price increases. If the share owner wants to get some cash back, they are free to sell some of the shares.

Quote:
Originally Posted by melgross View Post

It's actually not bad for tech companies. I don't remember what the average for them is, but I don't think it's far off.

Apple's up about $7.50 now.

That's a far cry from the people who were insisting that if Apple did a dividend that the share price would jump by 15% or so.[/quote]
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post #85 of 183
3/19/12 at 8:09am
Quote:
Originally Posted by melgross View Post

You'll have to look at the Times article today in the business section. But the quote was this:



I don't know if they're talking about 30% more than the average of their foreign tax rate, or an actual 30% of the total. Whichever it is, it's a lot.

Companies pay taxes only on the difference over what they have already paid. So the Times is wrong if they implied anything else. (Incidentally, it would also mean a tax credit for jurisdictions where the rate is higher than the US rate; but those are few and inconsequential).

The effective rate can be more than 30%, especially for companies located in states such NY, CA, IL with high state tax rates.
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post #86 of 183
3/19/12 at 8:12am
Quote:
Originally Posted by melgross View Post

And most of Apple's investments in plant and equipment for companies making their stuff, is abroad. Of course, those are really just upfront loans that result in big discounts and guaranteed supply, but still, it's cash being used.

They do invest here too though. Supposedly half the cost of building that giant Samsung plant in Texas to build Apple's SoC's was paid for by Apple.

I did some surfing... When that plant was being built, Sammy estimated that it would provide 500 full-time jobs. I assume that these are high-paying jobs, and there is a greater than 1:1 fan-out of lower-paying support jobs: custodial, restaurants, entertainment etc. for the entire community.

That, supposedly, was before any Apple involvement!

I guess you could say that Apple is kinda' into manufacturing high-tech components in the US.
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post #87 of 183
3/19/12 at 8:12am
Quote:
Originally Posted by Dick Applebaum View Post

Are there any international corporate tax specialists out there that understand this and can 'splain it to us, the hoi polloi?

By no means an "international tax specialist," but see above.
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post #88 of 183
3/19/12 at 8:13am
Quote:
Originally Posted by jragosta View Post

That doesn't really apply. That discusses a share buy back where shares are taken out of circulation. Apple is not going to take shares out of circulation- they are going to reissue them, so it doesn't generate any of the benefits of a share buy back. It is no different than if Apple paid their employees with cash and the employees bought shares on the open market.



You clearly don't understand share repurchases. If it is a true share repurchase (the shares are removed from circulation), the gain is that there are fewer shares in circulation. So if a company removes 10% of the shares from circulation, the per share income goes up by 10%. If the multiple remains the same, the share price would also go up by 10%.

The money is no more 'gone' than share price increases. If the share owner wants to get some cash back, they are free to sell some of the shares.



That's a far cry from the people who were insisting that if Apple did a dividend that the share price would jump by 15% or so.

I understand share repurchases just fine. You don't recognize what happens in the real world. Besides, I've already stated in other posts that shares are being repurchased here for the reason of taking them out of circulation because of share number increases over the years. Perhaps you should read all of my posts before you comment.

You can state the academic reasons for anything, but theory and practice usually have a disconnect. That's true here as well.
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post #89 of 183
3/19/12 at 8:17am
So we're talking $15 billion per year yet Apple will surely have more net profit than that per year so we're looking at Apple's "war chest" continuing to grow and stay above $100 billion for the foreseeable future.

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post #90 of 183
3/19/12 at 8:17am
Quote:
Originally Posted by anantksundaram View Post

Companies pay taxes only on the difference over what they have already paid. So the Times is wrong if they implied anything else. (Incidentally, it would also mean a tax credit for jurisdictions where the rate is higher than the US rate; but those are few and inconsequential).

The effective rate can be more than 30%, especially for companies located in states such NY, CA, IL with high state tax rates.

Again, it's more complex than that. Some foreign cash is even taxed at the time it's made, at the full Us rate, I believe that called "passive income" such as dividends, etc. I haven't done work on this for some time.

But, from what I've seen, companies can be taxed at higher rates than the theoretical difference. It depends on a lot of factors. Apple, for example, as many other tech companies, doesn't pay 35%. They pay less. But that doesn't mean that their repatriation tax would reflect that.
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post #91 of 183
3/19/12 at 8:18am
Quote:
Originally Posted by Dick Applebaum View Post

This just in...

Apple gets Dubrovnik City Council approval for plans for new World Headquarters:

This is a joke - is it?

Else, give us a link please. Because we might plan our next holidays in this part of croatia.
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post #92 of 183
3/19/12 at 8:20am
Quote:
Originally Posted by SolipsismX View Post

So we're talking $15 billion per year yet Apple will surely have more net profit than that per year so we're looking at Apple's "war chest" continuing to grow and stay above $100 billion for the foreseeable future.

Sure, it's all about that foreign income which will only increase as a percentage of Apple sales and profits over the years. Not so long ago, most of Apple's sales and profits were made here. So this disconnect will only grow larger. I wonder how they'll handle it when foreign cash is 75% of holdings, 80%.
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post #93 of 183
3/19/12 at 8:22am
Quote:
Originally Posted by anantksundaram View Post

By no means an "international tax specialist," but see above.

Thanks... It helps!

Especially the bit about the state taxes.

I don't know if it is still true, but when we lived in Las Vegas -- Nevada was very tax friendly...

No [personal] state income tax, very small state sales tax, freeport -- no warehousing taxes...

...The whole tax code was structured so that the "tourists" paid the bulk of the taxes.

The freeport advantage caused many California companies to warehouse product in Nevada -- creating jobs.

Lotsa' ways to skin a cat!
"So at the end of the presentation, Steve came up to me and said: Is the iPhone worth criticizing? And I said: Make the screen five inches by eight inches, and you’ll rule the world."
– Alan Kay –
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– Alan Kay –
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post #94 of 183
3/19/12 at 8:25am
Quote:
Originally Posted by Dick Applebaum View Post

Yeah, all of this with domestic cash... waiting for a better tax environment to repatriate foreign cash...

I just love the way Peter and Tim parry questions that shouldn't be asked

I would guess the foreign cash would be used for the supply chain.
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post #95 of 183
3/19/12 at 8:32am
Quote:
Originally Posted by Rabbit_Coach View Post

This is a joke - is it?

Else, give us a link please. Because we might plan our next holidays in this part of croatia.

It's a joke...

I've never been there (closest we got was Rome), but the Dalmatian Coast is supposed to be one of the most beautiful places in the world -- and Dubrovnik is the jewel in the crown.

Sigh! My late wife, Lucy -- the love of my life, was Croatian (dark hair, tan complexion and amazing blue eyes)... She was beautiful, stubborn, open to anything, funny... and a wink and smile that would melt the hardest heart! \
"So at the end of the presentation, Steve came up to me and said: Is the iPhone worth criticizing? And I said: Make the screen five inches by eight inches, and you’ll rule the world."
– Alan Kay –
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"So at the end of the presentation, Steve came up to me and said: Is the iPhone worth criticizing? And I said: Make the screen five inches by eight inches, and you’ll rule the world."
– Alan Kay –
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post #96 of 183
3/19/12 at 8:33am
[/QUOTE]That's a far cry from the people who were insisting that if Apple did a dividend that the share price would jump by 15% or so.[/QUOTE]

The market is often delayed by a day or two, the analysts, investment consultants and others need a day to digest what is going on, they then advice their funds/investors etc on what they think and they in turn take another day to make a move.

Believe or not, this forum is at the front lines.
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post #97 of 183
3/19/12 at 8:42am
That's a far cry from the people who were insisting that if Apple did a dividend that the share price would jump by 15% or so.[/QUOTE]

The market is often delayed by a day or two, the analysts, investment consultants and others need a day to digest what is going on, they then advice their funds/investors etc on what they think and they in turn take another day to make a move.

Believe or not, this forum is at the front lines.[/QUOTE]

Yeah... About 650 K shares traded at open, then dropped down to less than 100 K where it stays.

This is the best target I've seen:

Quote:
March 19 (Reuters) - Apple <AAPL.O>:
* Wedbush raises Apple <AAPL.O> price target to $750 from $585; rating
outperform
"So at the end of the presentation, Steve came up to me and said: Is the iPhone worth criticizing? And I said: Make the screen five inches by eight inches, and you’ll rule the world."
– Alan Kay –
Reply
"So at the end of the presentation, Steve came up to me and said: Is the iPhone worth criticizing? And I said: Make the screen five inches by eight inches, and you’ll rule the world."
– Alan Kay –
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post #98 of 183
3/19/12 at 8:46am
Quote:
Originally Posted by jragosta View Post

You clearly don't understand share repurchases. If it is a true share repurchase (the shares are removed from circulation), the gain is that there are fewer shares in circulation. So if a company removes 10% of the shares from circulation, the per share income goes up by 10%. If the multiple remains the same, the share price would also go up by 10%.

Thats wrong because the company has lost it's cash, which would be a loss equivalent to the gain of the stocks purchased, and cash should be factored into the cost of the shares. Imagine a company which has no revenue but has lots of cash ( its a funny company for sure, but this is a thought experiment). The company has $80B in the bank and 1 billion outstanding shares. The shares should be worth $80 each. If the company buys back 500M stock for $40B, the cash on hand falls to $40B, the 500 million remaining stock should still be worth $80 reflecting the book value of the company.

Even if you add on revenue that calculus still holds barring market sentiment, which is a mugs game.


Quote:

The money is no more 'gone' than share price increases. If the share owner wants to get some cash back, they are free to sell some of the shares.

They could have sold the stock yesterday for the same price. The money has in effect disappeared.
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post #99 of 183
3/19/12 at 8:47am
Quote:
Originally Posted by Shaun, UK View Post

I wasn't trying to be cynical. I didn't realise stock yields were that low in general. I always thought people owned stocks for the dividends rather than the share price.

I don't invest in the stock market because I simply don't know enough about it to feel confident of not making a mistake. I follow Apple every day so I should have seen the big rise coming and invested a year ago but I used the money to set up a business instead so I can't complain.

I don't like the way analysts and banks manipulate the stock for their own gain. I would rather see dividends plus small monthly gains taking the stock price up gradually so that small investors see a gradual return on their investment and speculators are forced out.

It does seem low. But with the Fed having set interest rates at zero for a while and the foreseeable future, my savings account gets 0.2% or something ridiculously below inflation. And that's the official inflation rate which I think is under-reported.

In other words, as a rate it isn't bad. Without a DRIP (dividend re-investment plan) it is harder to do the compounding interest thing.

Share prices also take into account expected growth, which seems obvious but if you invest $100 and that stock goes up 5X, a 2% yield is something like a 10% yield on the money you put in.

Yield is a very important consideration for stocks whose price isn't going up but will still reward investors with solid dividends.
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post #100 of 183
3/19/12 at 8:49am
Buyback is good, gives shares to hard-working employees who grow the business.

Dividend's are bad, gives rich 'investors' even more money; even though they don't contribute at all to the way Apple is run. It's like a sportsman paying the owner of the sports club, as opposed to the owner paying the sportsman.

Surely, going from $370 in October 2011 to $590 in March 2012 is enough money for these 'investors'. Dividends are for companies with no room for growth, like Microsoft.

Just because you have money, doesn't mean you have to spend money.
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post #101 of 183
3/19/12 at 8:49am
Quote:
Originally Posted by melgross View Post

Again, it's more complex than that. Some foreign cash is even taxed at the time it's made, at the full Us rate, I believe that called "passive income" such as dividends, etc. I haven't done work on this for some time.

Of course it's more complex. Neither of us is a tax expert. But passive income is fairly trivial for US companies (unlike EU and Asian companies that have considerable cross-holdings).

Quote:
Originally Posted by melgross View Post

But, from what I've seen, companies can be taxed at higher rates than the theoretical difference. It depends on a lot of factors. Apple, for example, as many other tech companies, doesn't pay 35%. They pay less. But that doesn't mean that their repatriation tax would reflect that.

Tech companies often pay substantially less as an "effective" rate (typically, about 25% for companies such as Apple, Intel, Cisco, HP) because Congress gave them a tax credit on employee options exercised during the year (which get treated, for tax purposes, like money finally left the company to compensate the employee). That has nothing to do with the rate at which repatriated income is taxed.
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post #102 of 183
3/19/12 at 8:49am
From Asymco:



Apples dividend and share re-purchase plan: the impact on cash growth
"So at the end of the presentation, Steve came up to me and said: Is the iPhone worth criticizing? And I said: Make the screen five inches by eight inches, and you’ll rule the world."
– Alan Kay –
Reply
"So at the end of the presentation, Steve came up to me and said: Is the iPhone worth criticizing? And I said: Make the screen five inches by eight inches, and you’ll rule the world."
– Alan Kay –
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post #103 of 183
3/19/12 at 8:59am
Quote:
Originally Posted by Dick Applebaum View Post

That's a far cry from the people who were insisting that if Apple did a dividend that the share price would jump by 15% or so.

The market is often delayed by a day or two, the analysts, investment consultants and others need a day to digest what is going on, they then advice their funds/investors etc on what they think and they in turn take another day to make a move.

Believe or not, this forum is at the front lines.[/QUOTE]

Yeah... About 650 K shares traded at open, then dropped down to less than 100 K where it stays.

This is the best target I've seen:[/QUOTE]

I think you missed the one by Morgan Stanley about 5 days ago where they called for a bull case estimate of $960.
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post #104 of 183
3/19/12 at 9:07am
As a consumer fueling their huge cash reserves through higher than average profit margins, I'd much rather have seen Apple commit to making massive investments in research in new technologies. The only thing these dividend payments are doing is channeling more cash into the banking class which contributes nothing to society nor does it improve Apple products or technology in general. It didn't take very long for the money counters to reverse the legacy of innovation left behind by Steve Jobs.
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post #105 of 183
3/19/12 at 9:11am
Quote:
Originally Posted by CGJ View Post

Buyback is good, gives shares to hard-working employees who grow the business.

Dividend's are bad, gives rich 'investors' even more money; even though they don't contribute at all to the way Apple is run. It's like a sportsman paying the owner of the sports club, as opposed to the owner paying the sportsman.

Surely, going from $370 in October 2011 to $590 in March 2012 is enough money for these 'investors'. Dividends are for companies with no room for growth, like Microsoft.

Just because you have money, doesn't mean you have to spend money.

This is a retarded post.

Dividends don't reward just the rich investors. They reward all the investors. And the ones who'll be rewarded the most will be the long term investors who bought shares a long time ago. If you bought Apple at $80/share, your dividend yield is over 10%. That's pretty damn good when 10 year Treasuries are only yielding around 2.5%.

I believe one consequence of the dividend will be that there will be less volatility in Apple. I think it will be very difficult for hedge funds to manipulate the stock because dividend buyers will just come in and buy in volume when the stock price drops. Decreased volatility will also diminish the options trading in the stock as well I would think.
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post #106 of 183
3/19/12 at 9:26am
Quote:
Originally Posted by backtomac View Post

And the ones who'll be rewarded the most will be the long term investors who bought shares a long time ago. If you bought Apple at $80/share, your dividend yield is over 10%. That's pretty damn good when 10 year Treasuries are only yielding around 2.5%.

You are double-counting your returns. The reason that the dividend yield - say, 2.5% - is so low is precisely because the capital gains is so high (i.e., (595 – 80)/80 – 1 = ~550%).

You can't, in your calculations, say that you got a 550% return over your holding period plus a 10% dividend. Your dividend yield is based on the current price. Period.

Your math does not make any sense.
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post #107 of 183
3/19/12 at 9:28am
Quote:
Originally Posted by Dick Applebaum View Post

It's a joke...

I've never been there (closest we got was Rome), but the Dalmatian Coast is supposed to be one of the most beautiful places in the world -- and Dubrovnik is the jewel in the crown.

Sigh! My late wife, Lucy -- the love of my life, was Croatian (dark hair, tan complexion and amazing blue eyes)... She was beautiful, stubborn, open to anything, funny... and a wink and smile that would melt the hardest heart! \

Thought so. And sorry to hear that you lost a wonderful wife.

If ever you visit europe again you do have to go to croatia. What you said about the Dalmatian Coast and Dubrovnik. It's absolutely true. And the color and clarity of the water is just spectacular.
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post #108 of 183
3/19/12 at 9:44am
Quote:
Originally Posted by anantksundaram View Post

Of course it's more complex. Neither of us is a tax expert. But passive income is fairly trivial for US companies (unlike EU and Asian companies that have considerable cross-holdings).



Tech companies often pay substantially less as an "effective" rate (typically, about 25% for companies such as Apple, Intel, Cisco, HP) because Congress gave them a tax credit on employee options exercised during the year (which get treated, for tax purposes, like money finally left the company to compensate the employee). That has nothing to do with the rate at which repatriated income is taxed.

That last part is what I just said, so we are in agreement for a change.
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post #109 of 183
3/19/12 at 9:48am
Quote:
Originally Posted by anantksundaram View Post

You are double-counting your returns. The reason that the dividend yield - say, 2.5% - is so low is precisely because the capital gains is so high (i.e., (595 80)/80 1 = ~550%).

You can't, in your calculations, say that you got a 550% return over your holding period plus a 10% dividend. Your dividend yield is based on the current price. Period.

Your math does not make any sense.

I understand the point he's making though. He made an $80 investment, and now, in addition to the price accumulation, he's getting a dividend that's actually more than a 10% return on that $80.

Inflation and the years that there was no dividend must be factored in, but this is something unexpected, so it's an addition.
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post #110 of 183
3/19/12 at 9:49am
Quote:
Originally Posted by Dick Applebaum View Post

One of the reasons I wanted a large split was to setup investment accounts for my grandkids... at $600 a pop there wouldn't be much room for action...

They each have saving accounts -- but that's just a lay-away for future needs (car, insurance, etc.).

My Dad had shares of Southern Cal Edison that offered dividend reinvestment at a fixed grant price for a period of time... He was able to accumulate shares at a fraction of their price in an up market...

That could be a great deal for AAPL investors!

I have to agree with you on this one.
I believe a stock split would do more for Apple in the long run But it is hard to go against a buy-back when they are sitting on so much cash. One of the reasons that may not have chosen that course is an attempt to provide greater pricing stability, but I am quite sure that others here would profess just the opposite strategy to do so.
I am not so sure about offering a dividend at this point. It seems to be a concession to the die hards on wall street, although a DRIP (Dividend Re Investment Plan, for those that may not know) can be a very positive way to grow a position or a portfolio.

On a more personal note, I offer you and all members of this board an apology for my comments surrounding Walmart in another thread. I was over the line, and although there is quite a back-story to my displeasure with them, this is not the appropriate format.

Dick, I consider you a calming and rational voice on this forum, and I hope it you continue to be that voice.
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post #111 of 183
3/19/12 at 9:52am
http://www.thestreet.com/story/11461...m_ven=CNNMONEY

Up about $13 as of this posting, and was up about $14 a short while before. It's pretty volatile still, but so far is trending upwards.
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post #112 of 183
3/19/12 at 9:56am
Quote:
Originally Posted by justflybob View Post

I have to agree with you on this one.
I believe a stock split would do more for Apple in the long run But it is hard to go against a buy-back when they are sitting on so much cash. One of the reasons that may not have chosen that course is an attempt to provide greater pricing stability, but I am quite sure that others here would profess just the opposite strategy to do so.
I am not so sure about offering a dividend at this point. It seems to be a concession to the die hards on wall street, although a DRIP (Dividend Re Investment Plan, for those that may not know) can be a very positive way to grow a position or a portfolio.

On a more personal note, I offer you and all members of this board an apology for my comments surrounding Walmart in another thread. I was over the line, and although there is quite a back-story to my displeasure with them, this is not the appropriate format.

Dick, I consider you a calming and rational voice on this forum, and I hope it you continue to be that voice.

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.
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post #113 of 183
3/19/12 at 10:03am
Quote:
Originally Posted by bwik View Post

A buyback at $600 a share for AAPL would be totally asinine. The buyback, if ever, should have occurred 4-5 years ago. The power of it would have been multiplied. To do it now is pathetic.

I don't think Apple is trying to get a bargain on AAPL. They believe in the company, feel that it will go up, and true to form, think and act carefully and wisely, rather than just Buy one day when the price dips. It shows confidence in the future prospects of the company.

Quote:
Originally Posted by KDMeister View Post

I would rather see Apple stick to their guns despite all the pressure from the investor community. I'd rather see Apple shares go up because of organic growth and not because of dividends. Buybacks are the biggest waste of money - the money will go into thin air when the stock price comes down at some point. I'd rather see Apple end world hunger than pay people who already have a lot of cash to spare. After all they have money to spend on Apple products and Apple shares.

Apple has no responsibility to end world hunger or any of the other social responsibility crap that vultures throw at them because they're rich. Social responsibility is of UTMOST importance, but a company is here to make money. If anything, go knocking on the rich Executive's doors about donations, leave the business alone, as its job is to generate revenue for owners.

Quote:
Originally Posted by melgross View Post

The problem with share repurchasing is that it throws money away. It's GONE! Nothing can be done with it. And for most companies doing it, it doesn't result in share price accumulation over the long term..

.... Unless of course they sell the shares back when the stock price goes higher.

Quote:
Originally Posted by Shaun, UK View Post

I wasn't trying to be cynical. I didn't realise stock yields were that low in general. I always thought people owned stocks for the dividends rather than the share price.

I could care less about Dividends. They're simply a perk to me. So sure, as an Investor, I'm happy. I care about share price appreciation. That's what dictates a truly good company, truly great company performance, and that's where you make real money.

Quote:
Originally Posted by jragosta View Post

That's a far cry from the people who were insisting that if Apple did a dividend that the share price would jump by 15% or so.

Give it time. AAPL doesn't usually respond so dramatically to good news initially. Remember earnings? A measly $25 jump that day, yet a continuous upward correction into the $600's and beyond.

P.S: I've been watching the price movement for $30 minutes, and it is sitting there in the $599's, like a tug of war between low $599's and $600's! It touched $600 and it creeping there again. I want to see it get in there!
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post #114 of 183
3/19/12 at 10:10am
I don't understand the argument that Apple must be doing this because they feel their growth will slow soon. Apple has been growing by leaps and bounds, while reinvesting lots of their cash in product development, small intelligent acquisitions, supplier concessions, distribution deals, etc. Despite all the investments they've needed to make to grow by huge percentages each year, they continue to grow cash on hand by exponential amounts. If they continued to invest and grow at the rate they have over the last decade, they would have no problem paying a dividend with a yield of 1.8%, and it wouldn't slow their growth.

My take is this; for years, Apple has been growing so fast they couldn't reinvest their cash quickly enough. They are still growing that fast, and expect to continue growing that fast. $100 billion is apparently the (insanely huge) cushion Apple needed to feel comfortable paying out the growth in cash, rather than adding it to the more-than-ample pile.
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post #115 of 183
3/19/12 at 10:13am
Quote:
Originally Posted by Godzilla View Post




.... Unless of course they sell the shares back when the stock price goes higher.



Generally the shares are destroyed, along with their value. They won't exist to be re-released. If Apple wants more shares, they have to issue them.
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post #116 of 183
3/19/12 at 10:18am
Quote:
Originally Posted by CogitoDexter View Post

By the looks of it, that will barely dent the cash pile, if future profits are taken into consideration!

Yep. and they probably spent several months considering that issue, plus the legal issues and concerns before going forward on this.

And yet there will be folks that will talk of this as a Tim Cook decision, making it sound like he decided to do it the moment Steve was buried now that Steve wasn't around to say no. Because they don't understand the amount of back work that has to go into such things, same for things like charity match programs, new cash discounts for employees and so on.
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post #117 of 183
3/19/12 at 10:19am
Quote:
Originally Posted by melgross View Post

I understand the point he's making though. He made an $80 investment, and now, in addition to the price accumulation, he's getting a dividend that's actually more than a 10% return on that $80.

We are back to disagreeing: I don't agree with your math here!

But I'll stop there.
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post #118 of 183
3/19/12 at 10:22am
Quote:
Originally Posted by anantksundaram View Post

One thing I am super happy about: they didn't announce some large acquisition.

That would have been a terrible move.


Depends on the acquisition.
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post #119 of 183
3/19/12 at 10:27am
Quote:
Originally Posted by melgross View Post

Generally the shares are destroyed, along with their value. They won't exist to be re-released. If Apple wants more shares, they have to issue them.

Actually, it's not true that they are destroyed. They can be kept as treasury stock. While they will not have voting rights or receive dividends, they can be reissued, kept forever, or simply canceled. While it's kept, it appears as "negative" equity on the balance sheet. It counts as "authorized" but not issued shares.
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post #120 of 183
3/19/12 at 10:28am
Quote:
Originally Posted by charlituna View Post

Depends on the acquisition.

Can you name a couple of large ones that have worked out well? For every one of those, I could name five that have not.
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