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Apple predicted to announce plans for growing cash pile by April, will add $42B over 2013

post #1 of 51
Thread Starter 
Speculation abounds as to what Apple will do with its $137 billion cash pile, but one investment officer believes Cupertino will put the rumors to rest by announcing its plans for the massive cash hoard by next month.

AAPL
AAPL's stock performance over the past half year. | Source: Bloomberg


Bloomberg reported on Monday that Howard Ward, chief investment officer at Gamco Investors, predicted an announcement from Apple in an interview on Bloomberg Radio's "Surveillance." Ward believes that Apple will announce a reallocation of at least some of that cash in order to "put a floor under their stock at a higher price than it is today."

Ward seemed confident in the future of Apple stock, comparing it to JPMorgan, which saw its price plummet last year after a multibillion-dollar loss.

"The stock was beaten up and it was at $30 a share," he said, "and now it's $50."

Ward also believes that Apple will continue to grow its cash and investment pile over the course of 2013. The Gamco officer predicted $42 billion would be added to Apple's current $137.1 billion cash and equivalents over the course of the year.

Apple is Gamco's fund's largest holding, according to Ward.

What exactly Apple should do with its considerable cash holdings has been the topic of much discussion as the pile gets bigger. Last month saw a small revolt on the part of one investor, who believed Apple should issue preferred stock, though that has since died down. A good portion of the assets sits overseas, prompting calls from assorted governments for the repatriation of Apple's stashed earnings so that it can be taxed.
post #2 of 51
Gosh, what a terrible, terrible problem to have.
No wonder Apple is doomed...
post #3 of 51
It is a problem. Think about it, Fed is printing dollars faster than Apple can shift iPhones so each dollar becomes worth less and less... Apple may as well burn that money for all the good it does sitting in its coffers.
post #4 of 51

They should use the money to buy gold.

post #5 of 51

But according to analysts, Apple desperately needs to burn through the cash it has on hand just to stay alive, right? Based on this, there's no way Apple will be ADDING to it's cash pile this year.. I'm so confused.  /s 

post #6 of 51
They should start a stock buy back.
post #7 of 51
Quote:
Originally Posted by majjo View Post

If they return a good portion to shareholders, I'll probably buy in again

 

That would be a terrible way of wasting hard-earned money.

Just buy out Wolfram Alpha, Yelp, Sharp, and TSMC to secure future operations.

Also ask IBM to let Watson technology to get added to Siri stack.

Yeah, and kill f@cking Google.  1biggrin.gif

post #8 of 51
Each dollar becomes worth less and less? Oh really emrul? Inflation for 2012 was... drum roll ...
1.7%!!! Dollars kept for strategic purposes only seem like a brilliant idea when they get used. What will everyone say when Apple buys Corning (makers of Gorilla Glass), for example, which has a market of $18.5 billion and would probably cost at least $30 billion. I think Cook et. al. actually do know what they're doing.
post #9 of 51
I need to figure out how I can become an "analyst", that way, I can get paid huge bucks whilst talking out of my ass all day long, that would be awesome! /s
post #10 of 51
"well, currently they're not doing anything with it, which is quite frustrating to shareholders."

I think the offices of Braeburn Capital only moved; they're still investing that cash pile not sticking it under the bed ... though what a big bed that would be.
post #11 of 51
Quote:
Originally Posted by majjo View Post

well, currently they're not doing anything with it, which is quite frustrating to shareholders.
The fact is they don't really know what they are doing until they reveal it. They have implemented a buy back, they started paying dividends after many years of refusing to do so. I think Steve had the right idea. Don't give them anything. Give an inch and they want a mile. Give them nothing and they are content with that. Notice, the stock started tanking after they started pandering to stock holders.
post #12 of 51
I'm not one to jump on mergers and acquisitions as a panacea, or as a cheap trick to boost revenue. But Apple could certainly pick up a few companies that would assist in services, payments, maps, and other core/future interests. I'd start with Foursquare, Square, and possibly Waze. The former two can assist tremendously with points of interest. Another thing they may want to consider is investing in start-ups like Google Ventures does. Not to just copy Google, but the fact is many entrepreneurs would value a VC type relationship with Apple.
post #13 of 51
Quote:
Originally Posted by genovelle View Post

The fact is they don't really know what they are doing until they reveal it. They have implemented a buy back, they started paying dividends after many years of refusing to do so. I think Steve had the right idea. Don't give them anything. Give an inch and they want a mile. Give them nothing and they are content with that. Notice, the stock started tanking after they started pandering to stock holders.

Give them an inch and they'll take a foot and before you know it you won't have a leg to stand on.

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post #14 of 51
Originally Posted by jason98 View Post
Yeah, and kill f@cking Google.  1biggrin.gif

 

I wonder… 

 

I wonder if a Google purchase could legally go through IF Apple was forced to release Motorola as its own company AND hand Android over to Motorola, completely sight unseen.

 

Think about it: Apple would be completely destroying their competitor while absorbing everything that made it marginally decent… and Motorola couldn't possibly manage Android effectively, so Android would be dead, Motorola would be dead, and everyone else using Android would have to scramble to buy Android away from them.

post #15 of 51
They can give it to me....

Actually someone bought me one share years ago as a gift. I think it's split a couple times since then, though I don't know how to track that. But anyway, I'm reminded of the story whereby if you had bought one share in Microsoft in the 70's you'd be a billionaire today.

Well let's see how that works in reality - bought when it was less than $20 a share, and it's now worth $440. Throw in a couple splits and let's round up to $1500. So I'm now a $1500-aire.

They need to amend that Microsoft story to be 'if you had bought tens of thousands of shares in Microsoft in the 70's....' 1rolleyes.gif
Edited by pondosinatra - 3/11/13 at 2:23pm
post #16 of 51
Quote:
Originally Posted by SteveJay27 View Post

Each dollar becomes worth less and less? Oh really emrul? Inflation for 2012 was... drum roll ...
1.7%!!! Dollars kept for strategic purposes only seem like a brilliant idea when they get used. What will everyone say when Apple buys Corning (makers of Gorilla Glass), for example, which has a market of $18.5 billion and would probably cost at least $30 billion. I think Cook et. al. actually do know what they're doing.

The inflation numbers are so doctored it's insane. Just like the unemployment numbers. Don't believe the Obumma hype machine.
post #17 of 51
Quote:
Originally Posted by gcguy View Post

The inflation numbers are so doctored it's insane. Just like the unemployment numbers. Don't believe the Obumma hype machine.

Right?¡ If only we could go back to the time right before Bush left office when everything was so great¡

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post #18 of 51
Originally Posted by majjo View Post
And in doing so, they have become Microsoft.

 

I don't think that works. You can't say "I am become Microsoft, destroyer of evil." and have it make sense. lol.gif

post #19 of 51
If apple knows what it's doing then why is the stock at 430? I beg to differ with you regarding their cash stockpile & knowledge in regards to knowing what to do. It's clear that they don't know what their doing based on the simple fact that they won't say anything to us that we can hold onto or that will give us hope they will stop the stock from further decline.
Quote:
Originally Posted by SteveJay27 View Post

Each dollar becomes worth less and less? Oh really emrul? Inflation for 2012 was... drum roll ...
1.7%!!! Dollars kept for strategic purposes only seem like a brilliant idea when they get used. What will everyone say when Apple buys Corning (makers of Gorilla Glass), for example, which has a market of $18.5 billion and would probably cost at least $30 billion. I think Cook et. al. actually do know what they're doing.
post #20 of 51
Originally Posted by skleiniv View Post
If apple knows what it's doing then why is the stock at 430?

 

Let's spin that around.

 

"If Apple doesn't know what it's doing, why are they selling millions more of every product in every quarter and increasing their profit and revenue accordingly? Why are they able to turn their inventory around every week, and why are they still able to release products that are desirable worldwide?"


It's clear that they don't know what their doing based on the simple fact that they won't say anything to us that we can hold onto or that will give us hope they will stop the stock from further decline.

 

And from this statement, it's clear you don't have a clue what you're talking about.

post #21 of 51
You completely miss the point, they don't know what they are doing in regards to being a publicly traded company. & it's cash pile period. Did you even read the article?
post #22 of 51
If you think doing & saying nothing is "knowing what to do," I disagree. When Tim cook said "we're seriously thinking about returning cash to shareholders," he might as well said nothing! When, how much, in what manner will you distribute it? These unanswered questions is one of the reasons the stock is falling. In order to stop some of the decline he needs to create some sense of certainty & do it quickly.
post #23 of 51
Originally Posted by skleiniv View Post
…they don't know what they are doing in regards to being a publicly traded company. & it's cash pile period.

 

Yes, it's clear this isn't the case.


When Tim cook said "we're seriously thinking about returning cash to shareholders," he might as well said nothing!

 

Sounds like he's seriously thinking about returning cash to the shareholders.


When, how much, in what manner will you distribute it?

 

What reason (right?) do you have to know this? Should he have said absolutely nothing at all until he could tell you exactly what you want? Then you'd whine that he isn't saying anything at all. Either complain about nothing or complain about everything, but don't claim they're saying nothing when they're doing exactly what you want them to do.


In order to stop some of the decline he needs to create some sense of certainty & do it quickly.

 

It's a certainty that they'll keep making products people want, keep selling out of all of their products, and keep making boatloads of money.

post #24 of 51
Well magman, all ya have to do is make sure you have your MBA, top 5% of your class, preferably from Harvard, Yale, Wharton, University of Chicago, or Stanford, be a junior analyst at one of the smaller firms for about 5 years or so, then you are in! Oh, and to make the big bucks, make sure and be rated at the top of the Institutional Investor survey a few years in a row might get you one of the top spots.
post #25 of 51
Whatever they have planned for that cash it has the potential to be earth shattering.

They already have more than enough cash to buy Intel and raise Steve Jobs from the dead.
post #26 of 51
Originally Posted by jdnc123 View Post

…profit growth.  Not happening this quarter, I can guarantee you that.

 

Oh? You're sure?

post #27 of 51
Quote:
Originally Posted by genovelle View Post

The fact is they don't really know what they are doing until they reveal it. .

That's one of the silliest statements ever on AI - and that's saying a lot.

So it's impossible that Apple knows what they're doing - but just hasn't gotten around to telling you?
"I'm way over my head when it comes to technical issues like this"
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"I'm way over my head when it comes to technical issues like this"
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post #28 of 51
Originally Posted by jragosta View Post
That's one of the silliest statements ever on AI - and that's saying a lot.

So it's impossible that Apple knows what they're doing - but just hasn't gotten around to telling you?

 

I'm willing to think he got muddied in the pronouns.


The fact is they (shareholders) don't really know what they (Apple) are doing until they (Apple) reveal it.
post #29 of 51

Apple should buy Vodafone.
 

post #30 of 51
Quote:
Originally Posted by Buzzz View Post

They should start a stock buy back.

They are currently in the middle of a 45 billion dollar stock buy back/dividend program started last year.

 

Here is the press release:  http://www.apple.com/pr/library/2012/03/19Apple-Announces-Plans-to-Initiate-Dividend-and-Share-Repurchase-Program.html


Edited by Mechanic - 3/11/13 at 6:03pm
post #31 of 51
Quote:
Originally Posted by majjo View Post


well, currently they're not doing anything with it, which is quite frustrating to shareholders.

Stock buyback/dividend program:  http://www.apple.com/pr/library/2012/03/19Apple-Announces-Plans-to-Initiate-Dividend-and-Share-Repurchase-Program.html

That stock buyback/dividend program is 45 billion.

Plus they are increasing R&D by almost 60% in 2013.  

Its just that the cash pile is so big those increases hardly make a dent.

To put the size of the pile in perspective.

Apple made more profit last quarter than amazon has in there entire existence. LOL Last quarter!

 

Maybe people that expect apple to spend there horde should specify what constitutes there idea of spending.  Or just say I dont think that spending 60 billion in the next 3 years on stock buy backs and dividends and R&D and New Retail stores is enough.

 

So they are doing a lot with there money just not what you think they should.

 

As an addition, the other problem is that they make so damn much money every year that the cash horde even with there expenditures  gets larger lol.

post #32 of 51
Quote:
Originally Posted by skleiniv View Post

When, how much, in what manner will you distribute it?

Some of that was answered last year in there dividend/ stock buy back program announcement.  

 

 

From Apples announcement last year:

Quote:
CUPERTINO, California—March 19, 2012—Apple® today announced plans to initiate a dividend and share repurchase program commencing later this year.

Subject to declaration by the Board of Directors, the Company plans to initiate a quarterly dividend of $2.65 per share sometime in the fourth quarter of its fiscal 2012, which begins on July 1, 2012.
Additionally, the Company’s Board of Directors has authorized a $10 billion share repurchase program commencing in the Company’s fiscal 2013, which begins on September 30, 2012. The repurchase program is expected to be executed over three years, with the primary objective of neutralizing the impact of dilution from future employee equity grants and employee stock purchase programs.

I think that thats pretty definitive on distribution and when. Maybe the real sentiment from stock holders is that they are not satisfied with the amounts and think it ought to be more, which of course serves there position that they think they deserve  that money.  Lol.  I have even heard it said that a lot of stock holders really think that money is theres like they made it.  What utter nonsense.   Apple made that money.  Stockholders are just lucky Steve Jobs is not alive.  Because if he was there would be no Dividend at all.  He disliked them vehemently, and would never pay a dividend to any stock holder.  He did not give a rats ass what the stock was doing, He focused on giving customers the best product that Apple could give and in his words "let the stock take care of itself"

post #33 of 51
Quote:
Originally Posted by skleiniv View Post

If apple knows what it's doing then why is the stock at 430? I beg to differ with you regarding their cash stockpile & knowledge in regards to knowing what to do. It's clear that they don't know what their doing based on the simple fact that they won't say anything to us that we can hold onto or that will give us hope they will stop the stock from further decline.

Has Apple ever said anything prior to any transaction? 4th most profitable qtr ever. Record selling iDevices.
Quote:
Originally Posted by jdnc123 View Post

"They have implemented a buy back"

Complete and utter garbage that Cook likes to shove down the throats of people who aren't smart or diligent enough to read the fine print.  As the company has stated, the buyback was instituted for one reason only, to offset dilution from employee stock options.  There is no net benefit to shareholders, the share count stays the same, shareholders get no bigger slice of the earnings pie.

The dividend was instituted a year ago and the stock went higher.  It started dropping when competitors upped their games and concurrently Apple released weak products such as maps.  One thing Steve did have right was don't release products that aren't best in class and can be universally mocked.  Tim would have been well served to follow that lead.  Maps was the canary in the coal that caused the stock to start dropping, not instituting a dividend.

Jobs released MobileMe, the Cube, the HiFi and Apple Socks. Maps may not be perfect but neither is Google Maps.
post #34 of 51
Originally Posted by jdnc123 View Post

Maps was the canary in the coal that caused the stock to start dropping…

 

Ha! No.

post #35 of 51

I predict apple will increase the dividend to between $13 and $15 per share.  Probably closer to the 13 than the 15.  Boost the buyback by 10B over 3 years so another 3B per year or so. 

 

How will the market react?  Big sell off in the stock.  It is going to hit new 52 week lows once they announce.  There is no way apple will pay anything aggressive out to nameless and faceless shareholders.  Cook and the board honestly do not care about random people holding shares in their company.  They want the cash to keep the company afloat should it fall on hard times.  This will never change while Cook and this board are running the show. 

 

If they do any kind of raise as I suggest above it is merely a PR attempt to shut people up so they can try to change the conversation a bit.  With Cook at the helm this just isn't going to happen.  He is a supply chain man, not a CEO for a major consumer brand that 100% requires a visionary and charismatic CEO.  Nobody will ever replace Jobs but Cook appears to be an example of one that could not fall any further from the Apple tree

post #36 of 51
The dividend will never be that high per share. Cook helmed the most profitable year in corporate history. Cook is doing fine. Jobs didn't reinvent markets every year. Get over it.
post #37 of 51
Originally Posted by jungmark View Post
Cook helmed the most profitable year in corporate history.

 

"But but but but but but but but but but but but but that's only because Steve set him up!"

post #38 of 51
Quote:
Originally Posted by jdnc123 View Post

"They have implemented a buy back"

Complete and utter garbage that Cook likes to shove down the throats of people who aren't smart or diligent enough to read the fine print.  As the company has stated, the buyback was instituted for one reason only, to offset dilution from employee stock options.  There is no net benefit to shareholders, the share count stays the same, shareholders get no bigger slice of the earnings pie.

The dividend was instituted a year ago and the stock went higher.  It started dropping when competitors upped their games and concurrently Apple released weak products such as maps.  One thing Steve did have right was don't release products that aren't best in class and can be universally mocked.  Tim would have been well served to follow that lead.  Maps was the canary in the coal that caused the stock to start dropping, not instituting a dividend.

It has always been said that the dividend is to prevent dilution just as you state. Shareholders are receiving a benefit by retaining excellent talent without diluting their shares.

Maybe Apple is doing exactly as you wish. Maybe they are being more careful and leaving products in secret testing for longer to make sure they are as close to perfect as possible.
post #39 of 51
Apple board can't do anything with the money because:

- their business model speaks against acquisitions, they suck at it, they don't really know, how to turn such investments into money through their products. Small technology acquisitions do not really matter and cost that much
- they are afraid to give it away, because they haven't got a real idea, where they will be in year or two.
post #40 of 51
Quote:
Originally Posted by Tallest Skil View Post

 

"But but but but but but but but but but but but but that's only because Steve set him up!"


No CEO of Apple, except Steve, has ever demonstrated having what it takes to make Apple grow and progress.  A three year old child could have done as well as Cook.  Apple is like a bulk ore carrier that has so much momentum that if you turned the engines off, it would sail on for 40 kilometers before it coasted to a stop.

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