What good did the last 55 billion of the 60 billion do them in this case? What did they do here that couldn't have been done with 5 billion in the bank instead of 60? Nada!
Remember Tim Cook mentioning that they were about to invest $3.9B in locking up critical supplies? If they only had $5B in the bank, such a move would have been more difficult because it would leave you vulnerable and unable to take advantage of other opportunities. With $55B in the bank, interest from investment alone is likely sufficient to finance such a strategy.
Supply chain strategies can be devastating for competition. Not only are you guaranteeing continuous supply of your products, you are locking up manufacturing capacities such that competitors are stifled. Why do you think not a single competitor can beat Apple on tablet pricing, when Apple is historically the most expensive computer brand?
Their first big deal in putting a lock on the supply chain was in flash memory for the iPods. Possibly, this was one factor enabling them to monopolize the MP3 market in the early days when flash was becoming the key component in music players. Now, they have identified other components (touchscreens, for example) as being critical, not just for them but also for others.
Supply chain strategies are also expensive and risky, because there is a possibility you are either unnecessarily hedging or hedging on the wrong components. You cannot spend 50-60% of your cash hedging on one component. So, having $50B allows them the luxury of doing this without risking a fraction of their cash.
And, of course, the $3.9B Cook talked about likely has nothing to do with the premium they're allegedly paying now to mitigate the supply chain problems in Japan. So, imagine if they had *only* $5B, they too would be feeling the pain.
Because a malfunctioning nuclear reactor that has no ready access to a large body of water for emergency cooling would probably fail catastrophically, releasing HUGE amount of radioactive material into the air. Fukushima disaster is pretty bad right now, but had they not had sea water to cool the reactors, it would probably be 10 times worse.
I respectfully disagree. Sea water is not the right water for cooling a reactor. They have only been using it because they had no choice. It was never planned to be an emergency cooling solution because they believed the plant design had sufficient redundancy. First, they had diesel generators to back up the main power for the fresh water pumps. Second, they had batteries backing up the diesel. But they did not expect a tsunami large enough to rise above the protective walls. The diesel generators were literally drowned. The batteries were designed to last a few hours because they figured that any problem affecting the diesels could be fixed in that amount of time.
Possibly, access to sea water helped. But it was not planned.
Regardless of the what. A strong cash position pleases stock markets no end.
That's not true. There is an end to how it pleases the market. Stock investors value dividends. It's a continuum, not an on/off switch, but past a certain point, additional cash is undervalued by the stock market.
Quote:
And others are going on about it hurting Apple in the long-term if they absorb the cost, I don't see how it is going to hurt Apple MORE than a manufacturer that has ZERO room for manouver on pricing because there is next to no profit in their segment of the market.
Definitely true. I'm assuming that Apple agreed to this not out of the kindness of their hearts, but with an explicit assurance that these manufacturers owe Apple a big one. But Apple having a lot of cash has nothing to do with this deal. Apple makes profits on the hardware it sells. It does not need to pull money out of a cash pile to pay slightly higher prices for components. 2,000,000 iPads sell for about $1.2 billion. That revenue can be immediately used to buy sufficient components to buy ALL the parts for *4* million iPads. Whew! The cash pile is safe for another rainy day.
Remember Tim Cook mentioning that they were about to invest $3.9B in locking up critical supplies? If they only had $5B in the bank, such a move would have been more difficult because it would leave you vulnerable and unable to take advantage of other opportunities. With $55B in the bank, interest from investment alone is likely sufficient to finance such a strategy.
Apple spins off more cash than that in one quarter. You do realize that if 5 billion is good, 55 billion is NOT 11 times as good, right?
So maybe they stop at 10 billion? 15? 20? 30? 45? NEVER? They should NEVER give the cash back to its rightful owners, the owners of the company?
Quote:
Supply chain strategies can be devastating for competition. Not only are you guaranteeing continuous supply of your products, you are locking up manufacturing capacities such that competitors are stifled. Why do you think not a single competitor can beat Apple on tablet pricing, when Apple is historically the most expensive computer brand?
Oh I know I know! Because Apple has 60 billion in the bank? Thank god they didn't only have $20 billion, then they could have NEVER afforded to lock up the worldwide supply of touch panels. With 60 billion they can lock up the worldwide supply for 20 years! And they SHOULD! Riiiight.
Quote:
Supply chain strategies are also expensive and risky, because there is a possibility you are either unnecessarily hedging or hedging on the wrong components. You cannot spend 50-60% of your cash hedging on one component. So, having $50B allows them the luxury of doing this without risking a fraction of their cash.
That 3.9 billion wasn't cash though, it was a committment to buy. Apple didn't use any of its existing cash pile to buy those parts, it used cash from operations. So, sorry, your argument falls flat.
Quote:
And, of course, the $3.9B Cook talked about likely has nothing to do with the premium they're allegedly paying now to mitigate the supply chain problems in Japan. So, imagine if they had *only* $5B, they too would be feeling the pain.
Yeah, they'd be feeling the pain. See my previous post.
Really people, if you don't understand finance, please don't comment. You look ridiculous.
Nuclear reactors are built next to the sea because they need cooling. Sea water is a cheap and effective way to cool the reactors.
At least all that radiation will be nicely diluted it if gets into the sea.
This discussion takes me back 30 years, to my university days, it saddens me that we have wasted so much time.
But on the bright side I think that renewables and conservation have finally come of age, and I hope all the FUD and paid trolls wont stop it this time.
So AAPL rose to its current capitalization based on the generous dividends given out in .... what year? Ouch - so sorry.
And Microsoft was also giving out dividends when its capitalization was rising like a rocket, right? But wait, that's not true either. Ouch - so sorry again
Didn't someone say not to comment if they don't understand finance? Ouch again.
I respectfully disagree. Sea water is not the right water for cooling a reactor. They have only been using it because they had no choice. It was never planned to be an emergency cooling solution because they believed the plant design had sufficient redundancy. First, they had diesel generators to back up the main power for the fresh water pumps. Second, they had batteries backing up the diesel. But they did not expect a tsunami large enough to rise above the protective walls. The diesel generators were literally drowned. The batteries were designed to last a few hours because they figured that any problem affecting the diesels could be fixed in that amount of time.
Possibly, access to sea water helped. But it was not planned.
Exactly, the use of seawater was actually delayed by management bc seawater ruins the reactors. Also, the backup diesel gens. were put in the basement as a precaution against typhoons only to be flooded by the tsunami.
Such an outdated term. Why not just say "Taiwan" or "Digitimes" even. AI readers would know what you mean. Fewer words and you don't sound like you're quoting from a novel written during the era of colonialism.
Edit: bah, why do I even bother to complain? I thought I'd seen this phrase before so I searched for that exact above phrase at site:AI and Google shows many pages of articles by Katie, Josh, Slash, Sam (I stopped looking there) all using this. Would someone please forward my comment to the editor? Ahem, there is an editor, right?
Because a malfunctioning nuclear reactor that has no ready access to a large body of water for emergency cooling would probably fail catastrophically, releasing HUGE amount of radioactive material into the air. Fukushima disaster is pretty bad right now, but had they not had sea water to cool the reactors, it would probably be 10 times worse.
sorry butt thats bull
Japan built 6 reactors on the cheap.. decades ago
and did no improvements or real upgrades in all that time.
japan could right now pour tons of concrete in them and seal them and end this disaster now.
Exactly, the use of seawater was actually delayed by management bc seawater ruins the reactors. Also, the backup diesel gens. were put in the basement as a precaution against typhoons only to be flooded by the tsunami.
Regardless of the what. A strong cash position pleases stock markets no end.
It pleases the stock markets not at all. No metric of stock performance is based on or includes cash. Or debt, for that matter. Cash reserves are utterly meaningless numbers to stockholders unless the company pays some of it out as dividends. In fact a company holding huge cash reserves without any obvious or even theoretical plans for spending it on growth raises all sorts of questions.
Quote:
Originally Posted by brucep
aapl stock price is partly based on all that debt free cash .
'Fraid not. Nobody buys a stock for a company's cash, unless they are planning on taking over the company.
if the stockholders don't own the cash pile, who does?
Mr. Stelligent is right. Stockholders do not own the cash. Of course, being right does not entitle one to be condescending. He could have explained this to you more nicely.
Who owns the cash? The company. So you might think, as a shareholder, I own a piece of the company and therefore a share of the assets. Seems reasonable, right? But not legally true.
In general, common stock holders do not have own the assets of a company. Why? The fact is that they don't even truly own the company. When you purchase stocks, the only thing you own is the shares. In a legal sense, no one truly owns a corporation. The directors decide how to run the company. Shareholders can indirectly influence this by voting for or against directors, not to mention for or against specific motions. But they do not directly make decisions about how a company is run, including how assets are divided.
For example, the board can decide to *spend* the cash on a frivolous purchase. If the shareholders agreement allow them to do this, there is nothing you can do. So, clearly, you as the shareholder do not own the cash.
Even if a company shuts down due to bankruptcy, common shareholders are often last in line to benefit from the assets.
I have described this as simply as possible without resorting to legalese. Hope it helps.
So I am afraid Mr. Stelligent is right. Still, no need to be arrogant just because one knows more.
In general, common stock holders do not have own the assets of a company. Why? The fact is that they don't even truly own the company. When you purchase stocks, the only thing you own is the shares. In a legal sense, no one truly owns a corporation. The directors decide how to run the company. Shareholders can indirectly influence this by voting for or against directors, not to mention for or against specific motions. But they do not directly make decisions about how a company is run, including how assets are divided.
Jesus. I understand that I do not technically, legally, own the cash, in the way that I could go in and claim it or sue for it or any of that. I have an economics degree from an Ivy league school for christ's sake. But to suggest that the money isn't the shareholder's is ridiculous. And to suggest that 60 billion in cash somehow helped Apple sign a contract to buy $4 billion in parts that they will resell for $8 billion is even more ridiculous.
If $60 billion is good, then when Apple has $80 billion in the bank in 2 years that will be much better, right? And $100 billion, even better! It should never be given back to the shareholders, because Apple knows what to do with that cash (sit it in a bank earning nearly nothing) WAY better than any little private individual does, right?
Jesus. I understand that I do not technically, legally, own the cash, in the way that I could go in and claim it or sue for it or any of that. I have an economics degree from an Ivy league school for christ's sake. But to suggest that the money isn't the shareholder's is ridiculous. And to suggest that 60 billion in cash somehow helped Apple sign a contract to buy $4 billion in parts that they will resell for $8 billion is even more ridiculous.
If $60 billion is good, then when Apple has $80 billion in the bank in 2 years that will be much better, right? And $100 billion, even better! It should never be given back to the shareholders, because Apple knows what to do with that cash (sit it in a bank earning nearly nothing) WAY better than any little private individual does, right?
Sorry, but I am confused. If you understand you don't own the cash, why is it ridiculous to suggest the money is not yours?
Perhaps you can explain why you think the cash is yours when it is not legally yours and you will never be able to use it, touch it, decide how it is spent, etc.
Please explain. Thank you.
BTW, "your" cash is not sitting in the bank doing nothing. A significant % is tied up in short term investments. If you dig thru their balance sheets, you will see they don't do too badly investing.
Perhaps you can explain why you think the cash is yours when it is not legally yours and you will never be able to use it, touch it, decide how it is spent, etc.
It's that last part, right before the etc, that I take issue with.
Apple won't keep the hoard forever. And when they bend to the will of their shareholders, you'll believe that they were right to wait so long and keep holding the shareholders' money.
The entire question of who "owns" the cash is ludicrous, if only because it completely misses the point. The board of directors of a public corporation has a fiduciary responsibility to the stockholders. This part of the deal they accept when they go public and seek outside investors. They are supposed to use the money the stockholders invest to grow the company's business, and if the business is a good one, the stockholders will benefit.
The problem with Apple's cash hoard isn't that the stockholders somehow "own" it, but that Apple's board has indicated no plan to use it for growing the company, which under the system called capitalism is its only purpose. Failing that purpose, the board has a fiduciary responsibility to the stockholders to distribute some of it back to the stockholders. They should do one or the other because it's simply good corporate management to either invest cash flow or give it the stockholders if they can't invest it. The matter of ownership never enters in.
Comments
Ah, you had to mention the cash hoard didn't you?
What good did the last 55 billion of the 60 billion do them in this case? What did they do here that couldn't have been done with 5 billion in the bank instead of 60? Nada!
Remember Tim Cook mentioning that they were about to invest $3.9B in locking up critical supplies? If they only had $5B in the bank, such a move would have been more difficult because it would leave you vulnerable and unable to take advantage of other opportunities. With $55B in the bank, interest from investment alone is likely sufficient to finance such a strategy.
Supply chain strategies can be devastating for competition. Not only are you guaranteeing continuous supply of your products, you are locking up manufacturing capacities such that competitors are stifled. Why do you think not a single competitor can beat Apple on tablet pricing, when Apple is historically the most expensive computer brand?
Their first big deal in putting a lock on the supply chain was in flash memory for the iPods. Possibly, this was one factor enabling them to monopolize the MP3 market in the early days when flash was becoming the key component in music players. Now, they have identified other components (touchscreens, for example) as being critical, not just for them but also for others.
Supply chain strategies are also expensive and risky, because there is a possibility you are either unnecessarily hedging or hedging on the wrong components. You cannot spend 50-60% of your cash hedging on one component. So, having $50B allows them the luxury of doing this without risking a fraction of their cash.
And, of course, the $3.9B Cook talked about likely has nothing to do with the premium they're allegedly paying now to mitigate the supply chain problems in Japan. So, imagine if they had *only* $5B, they too would be feeling the pain.
Because a malfunctioning nuclear reactor that has no ready access to a large body of water for emergency cooling would probably fail catastrophically, releasing HUGE amount of radioactive material into the air. Fukushima disaster is pretty bad right now, but had they not had sea water to cool the reactors, it would probably be 10 times worse.
I respectfully disagree. Sea water is not the right water for cooling a reactor. They have only been using it because they had no choice. It was never planned to be an emergency cooling solution because they believed the plant design had sufficient redundancy. First, they had diesel generators to back up the main power for the fresh water pumps. Second, they had batteries backing up the diesel. But they did not expect a tsunami large enough to rise above the protective walls. The diesel generators were literally drowned. The batteries were designed to last a few hours because they figured that any problem affecting the diesels could be fixed in that amount of time.
Possibly, access to sea water helped. But it was not planned.
Regardless of the what. A strong cash position pleases stock markets no end.
That's not true. There is an end to how it pleases the market. Stock investors value dividends. It's a continuum, not an on/off switch, but past a certain point, additional cash is undervalued by the stock market.
And others are going on about it hurting Apple in the long-term if they absorb the cost, I don't see how it is going to hurt Apple MORE than a manufacturer that has ZERO room for manouver on pricing because there is next to no profit in their segment of the market.
Definitely true. I'm assuming that Apple agreed to this not out of the kindness of their hearts, but with an explicit assurance that these manufacturers owe Apple a big one. But Apple having a lot of cash has nothing to do with this deal. Apple makes profits on the hardware it sells. It does not need to pull money out of a cash pile to pay slightly higher prices for components. 2,000,000 iPads sell for about $1.2 billion. That revenue can be immediately used to buy sufficient components to buy ALL the parts for *4* million iPads. Whew! The cash pile is safe for another rainy day.
Remember Tim Cook mentioning that they were about to invest $3.9B in locking up critical supplies? If they only had $5B in the bank, such a move would have been more difficult because it would leave you vulnerable and unable to take advantage of other opportunities. With $55B in the bank, interest from investment alone is likely sufficient to finance such a strategy.
Apple spins off more cash than that in one quarter. You do realize that if 5 billion is good, 55 billion is NOT 11 times as good, right?
So maybe they stop at 10 billion? 15? 20? 30? 45? NEVER? They should NEVER give the cash back to its rightful owners, the owners of the company?
Supply chain strategies can be devastating for competition. Not only are you guaranteeing continuous supply of your products, you are locking up manufacturing capacities such that competitors are stifled. Why do you think not a single competitor can beat Apple on tablet pricing, when Apple is historically the most expensive computer brand?
Oh I know I know! Because Apple has 60 billion in the bank? Thank god they didn't only have $20 billion, then they could have NEVER afforded to lock up the worldwide supply of touch panels. With 60 billion they can lock up the worldwide supply for 20 years! And they SHOULD! Riiiight.
Supply chain strategies are also expensive and risky, because there is a possibility you are either unnecessarily hedging or hedging on the wrong components. You cannot spend 50-60% of your cash hedging on one component. So, having $50B allows them the luxury of doing this without risking a fraction of their cash.
That 3.9 billion wasn't cash though, it was a committment to buy. Apple didn't use any of its existing cash pile to buy those parts, it used cash from operations. So, sorry, your argument falls flat.
And, of course, the $3.9B Cook talked about likely has nothing to do with the premium they're allegedly paying now to mitigate the supply chain problems in Japan. So, imagine if they had *only* $5B, they too would be feeling the pain.
Yeah, they'd be feeling the pain. See my previous post.
Really people, if you don't understand finance, please don't comment. You look ridiculous.
Nuclear reactors are built next to the sea because they need cooling. Sea water is a cheap and effective way to cool the reactors.
At least all that radiation will be nicely diluted it if gets into the sea.
This discussion takes me back 30 years, to my university days, it saddens me that we have wasted so much time.
But on the bright side I think that renewables and conservation have finally come of age, and I hope all the FUD and paid trolls wont stop it this time.
Stock investors value dividends.
So AAPL rose to its current capitalization based on the generous dividends given out in .... what year? Ouch - so sorry.
And Microsoft was also giving out dividends when its capitalization was rising like a rocket, right? But wait, that's not true either. Ouch - so sorry again
Didn't someone say not to comment if they don't understand finance? Ouch again.
A
So maybe they stop at 10 billion? 15? 20? 30? 45? NEVER? They should NEVER give the cash back to its rightful owners, the owners of the company?
Stock owners are the rightful owner of the cash? This is one of the biggest giveaways of someone who does not understand finance or corporate law.
I respectfully disagree. Sea water is not the right water for cooling a reactor. They have only been using it because they had no choice. It was never planned to be an emergency cooling solution because they believed the plant design had sufficient redundancy. First, they had diesel generators to back up the main power for the fresh water pumps. Second, they had batteries backing up the diesel. But they did not expect a tsunami large enough to rise above the protective walls. The diesel generators were literally drowned. The batteries were designed to last a few hours because they figured that any problem affecting the diesels could be fixed in that amount of time.
Possibly, access to sea water helped. But it was not planned.
Exactly, the use of seawater was actually delayed by management bc seawater ruins the reactors. Also, the backup diesel gens. were put in the basement as a precaution against typhoons only to be flooded by the tsunami.
A new report out of the Far East
Such an outdated term. Why not just say "Taiwan" or "Digitimes" even. AI readers would know what you mean. Fewer words and you don't sound like you're quoting from a novel written during the era of colonialism.
Edit: bah, why do I even bother to complain? I thought I'd seen this phrase before so I searched for that exact above phrase at site:AI and Google shows many pages of articles by Katie, Josh, Slash, Sam (I stopped looking there) all using this. Would someone please forward my comment to the editor? Ahem, there is an editor, right?
Because a malfunctioning nuclear reactor that has no ready access to a large body of water for emergency cooling would probably fail catastrophically, releasing HUGE amount of radioactive material into the air. Fukushima disaster is pretty bad right now, but had they not had sea water to cool the reactors, it would probably be 10 times worse.
sorry butt thats bull
Japan built 6 reactors on the cheap.. decades ago
and did no improvements or real upgrades in all that time.
japan could right now pour tons of concrete in them and seal them and end this disaster now.
but no
saving money is their answer./
putting the world at risk
putting sea water
on the rods destroys them
sorry
9
Stock owners are the rightful owner of the cash? This is one of the biggest giveaways of someone who does not understand finance or corporate law.
aapl stock price is partly based on all that debt free cash .
cash is king
9
Exactly, the use of seawater was actually delayed by management bc seawater ruins the reactors. Also, the backup diesel gens. were put in the basement as a precaution against typhoons only to be flooded by the tsunami.
wrong 1 million percent
9
Nuclear reactors are built next to the sea because they need cooling. Sea water is a cheap and effective way to cool the reactors.
At least all that radiation will be nicely diluted it if gets into the sea.
Except that radiation doesn't dilute.
Regardless of the what. A strong cash position pleases stock markets no end.
It pleases the stock markets not at all. No metric of stock performance is based on or includes cash. Or debt, for that matter. Cash reserves are utterly meaningless numbers to stockholders unless the company pays some of it out as dividends. In fact a company holding huge cash reserves without any obvious or even theoretical plans for spending it on growth raises all sorts of questions.
aapl stock price is partly based on all that debt free cash .
'Fraid not. Nobody buys a stock for a company's cash, unless they are planning on taking over the company.
Stock owners are the rightful owner of the cash? This is one of the biggest giveaways of someone who does not understand finance or corporate law.
This ought to be interesting.
if the stockholders don't own the cash pile, who does?
This ought to be interesting.
if the stockholders don't own the cash pile, who does?
Mr. Stelligent is right. Stockholders do not own the cash. Of course, being right does not entitle one to be condescending. He could have explained this to you more nicely.
Who owns the cash? The company. So you might think, as a shareholder, I own a piece of the company and therefore a share of the assets. Seems reasonable, right? But not legally true.
In general, common stock holders do not have own the assets of a company. Why? The fact is that they don't even truly own the company. When you purchase stocks, the only thing you own is the shares. In a legal sense, no one truly owns a corporation. The directors decide how to run the company. Shareholders can indirectly influence this by voting for or against directors, not to mention for or against specific motions. But they do not directly make decisions about how a company is run, including how assets are divided.
For example, the board can decide to *spend* the cash on a frivolous purchase. If the shareholders agreement allow them to do this, there is nothing you can do. So, clearly, you as the shareholder do not own the cash.
Even if a company shuts down due to bankruptcy, common shareholders are often last in line to benefit from the assets.
I have described this as simply as possible without resorting to legalese. Hope it helps.
So I am afraid Mr. Stelligent is right. Still, no need to be arrogant just because one knows more.
In general, common stock holders do not have own the assets of a company. Why? The fact is that they don't even truly own the company. When you purchase stocks, the only thing you own is the shares. In a legal sense, no one truly owns a corporation. The directors decide how to run the company. Shareholders can indirectly influence this by voting for or against directors, not to mention for or against specific motions. But they do not directly make decisions about how a company is run, including how assets are divided.
Jesus. I understand that I do not technically, legally, own the cash, in the way that I could go in and claim it or sue for it or any of that. I have an economics degree from an Ivy league school for christ's sake. But to suggest that the money isn't the shareholder's is ridiculous. And to suggest that 60 billion in cash somehow helped Apple sign a contract to buy $4 billion in parts that they will resell for $8 billion is even more ridiculous.
If $60 billion is good, then when Apple has $80 billion in the bank in 2 years that will be much better, right? And $100 billion, even better! It should never be given back to the shareholders, because Apple knows what to do with that cash (sit it in a bank earning nearly nothing) WAY better than any little private individual does, right?
Jesus. I understand that I do not technically, legally, own the cash, in the way that I could go in and claim it or sue for it or any of that. I have an economics degree from an Ivy league school for christ's sake. But to suggest that the money isn't the shareholder's is ridiculous. And to suggest that 60 billion in cash somehow helped Apple sign a contract to buy $4 billion in parts that they will resell for $8 billion is even more ridiculous.
If $60 billion is good, then when Apple has $80 billion in the bank in 2 years that will be much better, right? And $100 billion, even better! It should never be given back to the shareholders, because Apple knows what to do with that cash (sit it in a bank earning nearly nothing) WAY better than any little private individual does, right?
Sorry, but I am confused. If you understand you don't own the cash, why is it ridiculous to suggest the money is not yours?
Perhaps you can explain why you think the cash is yours when it is not legally yours and you will never be able to use it, touch it, decide how it is spent, etc.
Please explain. Thank you.
BTW, "your" cash is not sitting in the bank doing nothing. A significant % is tied up in short term investments. If you dig thru their balance sheets, you will see they don't do too badly investing.
Perhaps you can explain why you think the cash is yours when it is not legally yours and you will never be able to use it, touch it, decide how it is spent, etc.
It's that last part, right before the etc, that I take issue with.
Apple won't keep the hoard forever. And when they bend to the will of their shareholders, you'll believe that they were right to wait so long and keep holding the shareholders' money.
The problem with Apple's cash hoard isn't that the stockholders somehow "own" it, but that Apple's board has indicated no plan to use it for growing the company, which under the system called capitalism is its only purpose. Failing that purpose, the board has a fiduciary responsibility to the stockholders to distribute some of it back to the stockholders. They should do one or the other because it's simply good corporate management to either invest cash flow or give it the stockholders if they can't invest it. The matter of ownership never enters in.