Apple is not an income stock and I knew that when I want it. It is also not free money. It would devalue the stock. Since I bought it as a growth stock I would prefer that not happen. Eventually I hope to get it all moved into a retirement account, but you know what. I still would not want them devaluing my growth stock to try and pretend it is an income stock.
Your suggestion that the most undervalued growth stock on the market should reduce its value and slow its growth is quite bizarre. Maybe they should take on a huge debt so their enterprise value can go up too. People really need to stop learning about investing by reading random web pages.
Each time I read something you wrote I am more stunned than before. By what bizarre stretch of the imagination does Apple paying a dividend that has no appreciable effect on its cash pile and no discernible effect on Apple's future product plans transform it from a "growth" stock to a "dividend" stock? Am I supposed to pretend to believe that this makes any sense at all? It is obvious to me and probably everyone else here that this makes no sense at all.
If you invested in Apple to get dividends then you are a fool. If you invested to make money on the growth of Apple's stock, you have and still are. I trust Apple's board to do with the money what they feel is in the best interest for the continued long-term growth of the company.
Apple's "Board of Directors" decide on a dividend, not management.
Apple's Annual Shareholders meeting is less then a month away, that is probably when "the Board" would announce the size/timing of a dividend(if they decided to issue one at all)
Apple has $98bn of cash equivalents, as of Dec 31'11, according to their 10Q. They are generating plenty of cash, but a lot of that is overseas and would be subject to US taxes if Apple repatriates that cash in the form of a dividend to shareholders. Apple would probably would use US earnings to dictate the dividend payout(tax efficient)
I'm hearing Investment Banks have been canvassing "Value Fund Mgrs." about their interest in owning AAPL stock if Apple issued a dividend and presenting those results to the Board.
I suspect some Large Value Mgrs. think Apple will issue a dividend and have proceeded to buy up shares ahead of the announcement leading to the rather large upward movement of AAPL recently.
An initial 2-3% annual dividend payout(roughly $10-15/share) would be extremely POSITIVE for AAPL stock, and I would love to see it.
Apple's operating business would not be affected at all by paying out a dividend.
Thanks for injecting some sanity into this discussion, debunking particularly the claims being made by the likes of Wovel.
You are almost certainly correct that the recent run-up in the share value is driven by the expectation that Apple will commence paying an annual dividend. Given this, it is beyond obvious that the value of the share increases substantially as a result of the dividend being paid, and does not reduce the value as certain misinformed people keep saying. Nor does a small dividend of this sort have any significant impact on Apple's future product plans or growth. The question of repatriation is one that I don't know about. The obvious questions are (1.) how much of the roughly 100 B is subject to repatriation costs, (2) what is the repatriation cost going to be if all of that amount is repatriated, and (3.) does the payout of a 3% dividend truly mean that some of that money not yet repatriated will have to be repatriated. These questions need to be addressed in meaningful detail before this repatriation business is a valid argument opposing the payment of the dividend.
That presumes you know what Apple's long term plans are for the cash.
But you have yet to suggest any alternative. Implicitly, you assert that Apple should just allow it to continue to accumulate. If you are proposing something else, then what, exactly?
Paying a dividend has ZERO impact on the growth of Apple's business.
Yep. The suggestion that someone made that by virtue of paying this trivial dividend transforms Apple from a "growth" stock to an "income" stock is just about as silly as it could be.
You agree that paying dividends is a waste of money? Then why is it that preferred stock, as opposed to common stock, is distinguished in part by the guaranteed payment of dividends? And if that makes sense, then why do banks like to buy stocks that pay dividends? Why are so many institutional investors upping the price of Apple stock on the prospects that Apple will commence paying annual dividends?
Again, none of us can make that statement because we have no idea what the strategic plans are for the 100 billion dollars. They may be sitting on it awaiting favorable tax conditions somewhere so they can make an acquisition.
People in this thread keep making bizarre blanket absolute statements. No one on this thread can possibly say paying a dividend will not impact Apples growth as a company.
This is a preposterous argument. The amount of cash Apple is sitting on is 5x greater than the market capitalization of Sony, about 16x greater than the market cap of HP, nearly 3x greater than the market cap of MS. This is what all the analysts keep pointing out. If the amount of money we are talking about were 100 trillion, you would still be making the same statements. At what point do you decide that it would make sense for Apple to pay a 3% dividend? What is the alternative that you propose?
And Wall St. will dump Apple stock and go buy something else if they don't pay a dividend. And the stock price will crash, then all you bagholders will be stuck with paper equities that you can never convert to cash.
Dividends are a good idea, trust me, if anyone here actually owns Apple stock, you want a dividend.
I own AAPL as a major part of one of my portfolios... I still have shares that I bought at $17 (before a 2::1 split). I have been buying additional shares over the years whenever it looked like it was a good buy.
I don't want a dividend or a stock buyback -- I bought AAPL for growth, not for income.
IMO, a better solution to increase the growth of the price of AAPL would to split the stock, say 10::1 to 50::1.
This would not directly change the valuation, but it would make the stock available to the small investor -- like I was when I bought those $17 shares.
IMO, in the long run, the stock would benefit by being held by a larger number of investors and be less influenced by the manipulators.
At the end of 2009 I gifted AAPL and some other stocks to my daughter -- she is quite happy with the results -- AAPL was at $210.
This year I plan to gift AAPL and other stocks to my 3 grandchildren.
They all have savings accounts at 2% interest (saving for cars).
But I want them to understand how to invest for growth and to Invest for income.
AAPL at $10-$50 a share would be easier for them to place into perspective than AAPL at $500.
Thanks for injecting some sanity into this discussion, debunking particularly the claims being made by the likes of Wovel.
You are almost certainly correct that the recent run-up in the share value is driven by the expectation that Apple will commence paying an annual dividend. Given this, it is beyond obvious that the value of the share increases substantially as a result of the dividend being paid, and does not reduce the value as certain misinformed people keep saying. Nor does a small dividend of this sort have any significant impact on Apple's future product plans or growth. The question of repatriation is one that I don't know about. The obvious questions are (1.) how much of the roughly 100 B is subject to repatriation costs, (2) what is the repatriation cost going to be if all of that amount is repatriated, and (3.) does the payout of a 3% dividend truly mean that some of that money not yet repatriated will have to be repatriated. These questions need to be addressed in meaningful detail before this repatriation business is a valid argument opposing the payment of the dividend.
No need to repatriate capital in order to pay a 2-3% yearly dividend.
Whoever claims that Apple would incur repatriation tax costs associated with a dividend is WRONG
Apple generates more then $9-$13bn(2-3% dividend) in retained earnings in the US over the course of a year. Apple does not need to touch their overseas money.
It seems to me that you must be the one who has never owned a stock. There is practically unanimous agreement among informed shareholders, for reasons that are apparent to just about everyone but you, that as soon as Apple begins to pay a dividend, the value of the stock will increase dramatically. Perhaps you are thinking of the more mundane effect that occurs whenever a stock that routinely pays a dividend goes post-dividend. If that is what you are thinking of, then you are being disingenuous. It is not the same thing at all. That is what happens to a stock where the perceived value of the stock derives expressly from the regular payment of dividends, i.e., where the stock is more like a bond or a savings account for intents and purposes. This is presumably what you are thinking of, but it has no real applicability here. IF the dividend is announced for payment for stockholders of record at a future date, then of course there will be a short term ramp up in the value of a share leading up to that date, and then an abrupt drop when it goes post-dividend. But this effect is a wash. You have to pay for the dividend to get it. The more significant effect for Apple common shares will be the effect that occurs by virtue of the change in philosophy re paying dividend. The mere fact that Apple will at times pay dividends will increase the value of the stock. You seem not to understand this, and if you really do own in Apple stock, you are evidently the only owner of Apple stock who does not realize this.
Quote:
"There is practically unanimous agreement among informed shareholders, for reasons that are apparent to just about everyone but you, that as soon as Apple begins to pay a dividend, the value of the stock will increase dramatically."
Link please -- not just talking a knee-jerk short-term blip, but continued long-term growth in the price of AAPL.
The opinions of investment analysts or brokers who just want to churn AAPL stock are suspect.
No need to go any further. There is absolutely no evidence whatsoever that analysts reflect the opinions of stock holders. Nor is there any legal mechanism for the Board to pay any attention to analysts. The only thing you stated correctly is that the stock holders eventually control Apple. But they don't do that by voting on what they want (other than limited circumstances). Instead, they do that by electing board members to represent them. The BOARD decides what Apple does with its cash, not analysts.
AAAARRRRRGGGGGHHHHHHH!
I hate to shout, BUT BY WHAT RATIONALE DO YOU REGARD STOCKHOLDERS AND ANALYSTS AS TWO MUTUALLY EXCLUSIVE CLASSES OF PEOPLE???????????????????????????
The analysts that I have in mind are the analysts that own shares and that are studying the situation from the standpoint of what is best for shareholders. This ought to be obvious. Yet you, just like that other person who keeps making silly, contrived statements, proceeded from the contrived precept that analysts and not stockholders. And then you proceeded to add a really, really intelligent and informed angle to the whole debate by asserting that stock holders do not control the company directly, but do so only by electing board members to represent them. On this as well you are just plain wrong. Stockholders get initiatives placed on the ballots quite often. It happens with Apple. It varies from company to company. What you stated as a universal truth is nothing of the sort. I haven't checked into it, but unless it is expressly prohibited in the corporate bylaws, it would be possible for shareholders to force the payment of a dividend whether the board wants it or not. The statement you made is in effect a claim that in no corporation is it possible for shareholders to force a corporation to do anything that the board does not favor, but if you have ever received a ballot prior to an annual shareholder meeting, you would surely know that this is simply not correct.
Apple is way too large to be manipulated by hedge funds.
The reason a dividend makes sense is their are many large Value Fund Managers like Fidelity, Vanguard, T Rowe Price, etc that would LOVE to buy APPLE stock, but they are not allowed to since it does not pay a dividend. Also many retirees that live on a fixed income would welcome the chance to own Apple and receive a quarterly dividend.
Apple's growth is intact and would not be affected by a dividend.
I'm agnostic about a stock split, maybe you could explain to your grandchildren that a share of APPLE is VERY valuable and thats why it trades at $490(I'm not sure they would understand the concept of # of shares issued)
Apple cannot pay dividend or buyback, because they don't really have the cash. Most of the cash is trapped in foreign countries and if they bring it back they'd have to pay tax and that'd be a huge hit to earnings.
That's why these analysts are clueless. Only if Mitt became president and sign a bill of tax holiday, then we'd see AAPL pay dividend or do buyback.
So you are claiming that to pay a 3% dividend, Apple would have to "repatriate" cash that otherwise they would not have to repatriate. Can you back this claim up with actual numbers? Given the rate that the cash pile is increasing, it just does not seem likely to me unless virtually all of the profit is being reaped overseas.
I'm inclined to agree with those who say that Apple's focus shouldn't be to maximize shareholder value. We're along for the ride. We paid for that privilege, but we did so for the chance to be rewarded by an increasing stock price, nothing more.
The question Apple's board is clearly struggling with is, what is the best way we can use our cash to serve our focus? The answer is tied up in the question, what is or should be Apple's focus? Again, the answer is clear: Customer satisfaction.
So maybe the best thing they can do with the extra money is lower the price of their product. Only one problem: They can't keep up demand as it is! Therefore, the best use of the extra cash is to vastly increase production so that they can lower the price, and increase the number of stores so they can improve service. Oh, and keep improving the quality of their product.
Hmm. They're already doing all of these things, and they STILL are generating annoyingly large quantities of spare cash.
Maybe they should become a bank. Or a charity. Or a foundation.
You know what? I'm fine with all those. But as a stockholder, I see absolutely no need for a dividend.
Slappy, is that you again? I love you, you little guy. So funny
I hate to shout, BUT BY WHAT RATIONALE DO YOU REGARD STOCKHOLDERS AND ANALYSTS AS TWO MUTUALLY EXCLUSIVE CLASSES OF PEOPLE???????????????????????????
The analysts that I have in mind are the analysts that own shares and that are studying the situation from the standpoint of what is best for shareholders. This ought to be obvious. Yet you, just like that other person who keeps making silly, contrived statements, proceeded from the contrived precept that analysts and not stockholders. And then you proceeded to add a really, really intelligent and informed angle to the whole debate by asserting that stock holders do not control the company directly, but do so only by electing board members to represent them. On this as well you are just plain wrong. Stockholders get initiatives placed on the ballots quite often. It happens with Apple. It varies from company to company. What you stated as a universal truth is nothing of the sort. I haven't checked into it, but unless it is expressly prohibited in the corporate bylaws, it would be possible for shareholders to force the payment of a dividend whether the board wants it or not. The statement you made is in effect a claim that in no corporation is it possible for shareholders to force a corporation to do anything that the board does not favor, but if you have ever received a ballot prior to an annual shareholder meeting, you would surely know that this is simply not correct.
Yeah... Analysts like Cramer who periodically buy/sell shares to manipulate them -- then brag about the churn.
I hate to shout, BUT BY WHAT RATIONALE DO YOU REGARD STOCKHOLDERS AND ANALYSTS AS TWO MUTUALLY EXCLUSIVE CLASSES OF PEOPLE???????????????????????????
The analysts that I have in mind are the analysts that own shares and that are studying the situation from the standpoint of what is best for shareholders. This ought to be obvious. Yet you, just like that other person who keeps making silly, contrived statements, proceeded from the contrived precept that analysts and not stockholders. And then you proceeded to add a really, really intelligent and informed angle to the whole debate by asserting that stock holders do not control the company directly, but do so only by electing board members to represent them. On this as well you are just plain wrong. Stockholders get initiatives placed on the ballots quite often. It happens with Apple. It varies from company to company. What you stated as a universal truth is nothing of the sort. I haven't checked into it, but unless it is expressly prohibited in the corporate bylaws, it would be possible for shareholders to force the payment of a dividend whether the board wants it or not. The statement you made is in effect a claim that in no corporation is it possible for shareholders to force a corporation to do anything that the board does not favor, but if you have ever received a ballot prior to an annual shareholder meeting, you would surely know that this is simply not correct.
jragost gives way too much credit to the Board. Most Boards are puppets for Senior Mgmt that meet a few times a year. I'm sure when Jobs was Chairmen he ran the Board with an iron fist. 99.9999% of Apple's success was/is driven by their Sr Mgmt, engineers and all of their employees', certainly not the Board.
Apple is way too large to be manipulated by hedge funds.
The reason a dividend makes sense is their are many large Value Fund Managers like Fidelity, Vanguard, T Rowe Price, etc that would LOVE to buy APPLE stock, but they are not allowed to since it does not pay a dividend. Also many retirees that live on a fixed income would welcome the chance to own Apple and receive a quarterly dividend.
Apple's growth is intact and would not be affected by a dividend.
I'm agnostic about a stock split, maybe you could explain to your grandchildren that a share of APPLE is VERY valuable and thats why it trades at $490(I'm not sure they would understand the concept of # of shares issued)
I am a nice fellow!
I did not suggest who is doing the manipulation -- just that manipulation is being done!
I believe that concentrating the AAPL holdings in a few large funds, as you suggest, is antithetical to long-term growth -- which is why I invested in the stock.
I would rather see Apple invest their cash in things that will maintain and improve long-term growth.
The split would dampen the effect of the manipulators and bring in the new generation of long-term investors.
This is a preposterous argument. The amount of cash Apple is sitting on is 5x greater than the market capitalization of Sony, about 16x greater than the market cap of HP, nearly 3x greater than the market cap of MS. This is what all the analysts keep pointing out. If the amount of money we are talking about were 100 trillion, you would still be making the same statements. At what point do you decide that it would make sense for Apple to pay a 3% dividend? What is the alternative that you propose?
I agree 100%. At some point, whether it's 100B or 500B or 1T, Apple will have to have a good explanation as to why it's withholding that cash from shareholders.
It's true that SJ didn't consider dividends. But there is a point where they cannot justify the size of the hoard. I'm guessing, along with other stockholders, that the day of the iDividend is rapidly approaching. And I agree that that is pushing up the stock price, along with the impending arrival of the iPad 3.
Apple has plenty of cash to pay the dividend without depleting their powerful cash hoard.
So you are claiming that to pay a 3% dividend, Apple would have to "repatriate" cash that otherwise they would not have to repatriate. Can you back this claim up with actual numbers? Given the rate that the cash pile is increasing, it just does not seem likely to me unless virtually all of the profit is being reaped overseas.
There's money and there's money. The money AAPL earned within US have a lot of potential use, so that worth a lot more than the money earned in e.g. Japan. That's why they're not gonna use the money earned in US to pay dividend or do buybacks. I mean, they want to be able to, at any time, e.g. to engage in bidding war against some hot tech companies, and judging from how much GOOG paid Motorola, they could need 10s of $B in US as reserve for that. The overseas money, they'd have to pay tax to bring it back, which they'd never do unless there's a tax holiday (the hit in earnings would be so big it's not happening).
Comments
Apple is not an income stock and I knew that when I want it. It is also not free money. It would devalue the stock. Since I bought it as a growth stock I would prefer that not happen. Eventually I hope to get it all moved into a retirement account, but you know what. I still would not want them devaluing my growth stock to try and pretend it is an income stock.
Your suggestion that the most undervalued growth stock on the market should reduce its value and slow its growth is quite bizarre. Maybe they should take on a huge debt so their enterprise value can go up too. People really need to stop learning about investing by reading random web pages.
Each time I read something you wrote I am more stunned than before. By what bizarre stretch of the imagination does Apple paying a dividend that has no appreciable effect on its cash pile and no discernible effect on Apple's future product plans transform it from a "growth" stock to a "dividend" stock? Am I supposed to pretend to believe that this makes any sense at all? It is obvious to me and probably everyone else here that this makes no sense at all.
Apple's "Board of Directors" decide on a dividend, not management.
Apple's Annual Shareholders meeting is less then a month away, that is probably when "the Board" would announce the size/timing of a dividend(if they decided to issue one at all)
Apple has $98bn of cash equivalents, as of Dec 31'11, according to their 10Q. They are generating plenty of cash, but a lot of that is overseas and would be subject to US taxes if Apple repatriates that cash in the form of a dividend to shareholders. Apple would probably would use US earnings to dictate the dividend payout(tax efficient)
I'm hearing Investment Banks have been canvassing "Value Fund Mgrs." about their interest in owning AAPL stock if Apple issued a dividend and presenting those results to the Board.
I suspect some Large Value Mgrs. think Apple will issue a dividend and have proceeded to buy up shares ahead of the announcement leading to the rather large upward movement of AAPL recently.
An initial 2-3% annual dividend payout(roughly $10-15/share) would be extremely POSITIVE for AAPL stock, and I would love to see it.
Apple's operating business would not be affected at all by paying out a dividend.
Thanks for injecting some sanity into this discussion, debunking particularly the claims being made by the likes of Wovel.
You are almost certainly correct that the recent run-up in the share value is driven by the expectation that Apple will commence paying an annual dividend. Given this, it is beyond obvious that the value of the share increases substantially as a result of the dividend being paid, and does not reduce the value as certain misinformed people keep saying. Nor does a small dividend of this sort have any significant impact on Apple's future product plans or growth. The question of repatriation is one that I don't know about. The obvious questions are (1.) how much of the roughly 100 B is subject to repatriation costs, (2) what is the repatriation cost going to be if all of that amount is repatriated, and (3.) does the payout of a 3% dividend truly mean that some of that money not yet repatriated will have to be repatriated. These questions need to be addressed in meaningful detail before this repatriation business is a valid argument opposing the payment of the dividend.
That presumes you know what Apple's long term plans are for the cash.
But you have yet to suggest any alternative. Implicitly, you assert that Apple should just allow it to continue to accumulate. If you are proposing something else, then what, exactly?
Why can't AAPL be BOTH a growth and income stock?
Paying a dividend has ZERO impact on the growth of Apple's business.
Yep. The suggestion that someone made that by virtue of paying this trivial dividend transforms Apple from a "growth" stock to an "income" stock is just about as silly as it could be.
Agreed
You agree that paying dividends is a waste of money? Then why is it that preferred stock, as opposed to common stock, is distinguished in part by the guaranteed payment of dividends? And if that makes sense, then why do banks like to buy stocks that pay dividends? Why are so many institutional investors upping the price of Apple stock on the prospects that Apple will commence paying annual dividends?
Again, none of us can make that statement because we have no idea what the strategic plans are for the 100 billion dollars. They may be sitting on it awaiting favorable tax conditions somewhere so they can make an acquisition.
People in this thread keep making bizarre blanket absolute statements. No one on this thread can possibly say paying a dividend will not impact Apples growth as a company.
This is a preposterous argument. The amount of cash Apple is sitting on is 5x greater than the market capitalization of Sony, about 16x greater than the market cap of HP, nearly 3x greater than the market cap of MS. This is what all the analysts keep pointing out. If the amount of money we are talking about were 100 trillion, you would still be making the same statements. At what point do you decide that it would make sense for Apple to pay a 3% dividend? What is the alternative that you propose?
And Wall St. will dump Apple stock and go buy something else if they don't pay a dividend. And the stock price will crash, then all you bagholders will be stuck with paper equities that you can never convert to cash.
Dividends are a good idea, trust me, if anyone here actually owns Apple stock, you want a dividend.
I own AAPL as a major part of one of my portfolios... I still have shares that I bought at $17 (before a 2::1 split). I have been buying additional shares over the years whenever it looked like it was a good buy.
I don't want a dividend or a stock buyback -- I bought AAPL for growth, not for income.
IMO, a better solution to increase the growth of the price of AAPL would to split the stock, say 10::1 to 50::1.
This would not directly change the valuation, but it would make the stock available to the small investor -- like I was when I bought those $17 shares.
IMO, in the long run, the stock would benefit by being held by a larger number of investors and be less influenced by the manipulators.
At the end of 2009 I gifted AAPL and some other stocks to my daughter -- she is quite happy with the results -- AAPL was at $210.
This year I plan to gift AAPL and other stocks to my 3 grandchildren.
They all have savings accounts at 2% interest (saving for cars).
But I want them to understand how to invest for growth and to Invest for income.
AAPL at $10-$50 a share would be easier for them to place into perspective than AAPL at $500.
Thanks for injecting some sanity into this discussion, debunking particularly the claims being made by the likes of Wovel.
You are almost certainly correct that the recent run-up in the share value is driven by the expectation that Apple will commence paying an annual dividend. Given this, it is beyond obvious that the value of the share increases substantially as a result of the dividend being paid, and does not reduce the value as certain misinformed people keep saying. Nor does a small dividend of this sort have any significant impact on Apple's future product plans or growth. The question of repatriation is one that I don't know about. The obvious questions are (1.) how much of the roughly 100 B is subject to repatriation costs, (2) what is the repatriation cost going to be if all of that amount is repatriated, and (3.) does the payout of a 3% dividend truly mean that some of that money not yet repatriated will have to be repatriated. These questions need to be addressed in meaningful detail before this repatriation business is a valid argument opposing the payment of the dividend.
No need to repatriate capital in order to pay a 2-3% yearly dividend.
Whoever claims that Apple would incur repatriation tax costs associated with a dividend is WRONG
Apple generates more then $9-$13bn(2-3% dividend) in retained earnings in the US over the course of a year. Apple does not need to touch their overseas money.
It seems to me that you must be the one who has never owned a stock. There is practically unanimous agreement among informed shareholders, for reasons that are apparent to just about everyone but you, that as soon as Apple begins to pay a dividend, the value of the stock will increase dramatically. Perhaps you are thinking of the more mundane effect that occurs whenever a stock that routinely pays a dividend goes post-dividend. If that is what you are thinking of, then you are being disingenuous. It is not the same thing at all. That is what happens to a stock where the perceived value of the stock derives expressly from the regular payment of dividends, i.e., where the stock is more like a bond or a savings account for intents and purposes. This is presumably what you are thinking of, but it has no real applicability here. IF the dividend is announced for payment for stockholders of record at a future date, then of course there will be a short term ramp up in the value of a share leading up to that date, and then an abrupt drop when it goes post-dividend. But this effect is a wash. You have to pay for the dividend to get it. The more significant effect for Apple common shares will be the effect that occurs by virtue of the change in philosophy re paying dividend. The mere fact that Apple will at times pay dividends will increase the value of the stock. You seem not to understand this, and if you really do own in Apple stock, you are evidently the only owner of Apple stock who does not realize this.
"There is practically unanimous agreement among informed shareholders, for reasons that are apparent to just about everyone but you, that as soon as Apple begins to pay a dividend, the value of the stock will increase dramatically."
Link please -- not just talking a knee-jerk short-term blip, but continued long-term growth in the price of AAPL.
The opinions of investment analysts or brokers who just want to churn AAPL stock are suspect.
No need to go any further. There is absolutely no evidence whatsoever that analysts reflect the opinions of stock holders. Nor is there any legal mechanism for the Board to pay any attention to analysts. The only thing you stated correctly is that the stock holders eventually control Apple. But they don't do that by voting on what they want (other than limited circumstances). Instead, they do that by electing board members to represent them. The BOARD decides what Apple does with its cash, not analysts.
AAAARRRRRGGGGGHHHHHHH!
I hate to shout, BUT BY WHAT RATIONALE DO YOU REGARD STOCKHOLDERS AND ANALYSTS AS TWO MUTUALLY EXCLUSIVE CLASSES OF PEOPLE???????????????????????????
The analysts that I have in mind are the analysts that own shares and that are studying the situation from the standpoint of what is best for shareholders. This ought to be obvious. Yet you, just like that other person who keeps making silly, contrived statements, proceeded from the contrived precept that analysts and not stockholders. And then you proceeded to add a really, really intelligent and informed angle to the whole debate by asserting that stock holders do not control the company directly, but do so only by electing board members to represent them. On this as well you are just plain wrong. Stockholders get initiatives placed on the ballots quite often. It happens with Apple. It varies from company to company. What you stated as a universal truth is nothing of the sort. I haven't checked into it, but unless it is expressly prohibited in the corporate bylaws, it would be possible for shareholders to force the payment of a dividend whether the board wants it or not. The statement you made is in effect a claim that in no corporation is it possible for shareholders to force a corporation to do anything that the board does not favor, but if you have ever received a ballot prior to an annual shareholder meeting, you would surely know that this is simply not correct.
Apple is way too large to be manipulated by hedge funds.
The reason a dividend makes sense is their are many large Value Fund Managers like Fidelity, Vanguard, T Rowe Price, etc that would LOVE to buy APPLE stock, but they are not allowed to since it does not pay a dividend. Also many retirees that live on a fixed income would welcome the chance to own Apple and receive a quarterly dividend.
Apple's growth is intact and would not be affected by a dividend.
I'm agnostic about a stock split, maybe you could explain to your grandchildren that a share of APPLE is VERY valuable and thats why it trades at $490(I'm not sure they would understand the concept of # of shares issued)
Apple cannot pay dividend or buyback, because they don't really have the cash. Most of the cash is trapped in foreign countries and if they bring it back they'd have to pay tax and that'd be a huge hit to earnings.
That's why these analysts are clueless. Only if Mitt became president and sign a bill of tax holiday, then we'd see AAPL pay dividend or do buyback.
So you are claiming that to pay a 3% dividend, Apple would have to "repatriate" cash that otherwise they would not have to repatriate. Can you back this claim up with actual numbers? Given the rate that the cash pile is increasing, it just does not seem likely to me unless virtually all of the profit is being reaped overseas.
I'm inclined to agree with those who say that Apple's focus shouldn't be to maximize shareholder value. We're along for the ride. We paid for that privilege, but we did so for the chance to be rewarded by an increasing stock price, nothing more.
The question Apple's board is clearly struggling with is, what is the best way we can use our cash to serve our focus? The answer is tied up in the question, what is or should be Apple's focus? Again, the answer is clear: Customer satisfaction.
So maybe the best thing they can do with the extra money is lower the price of their product. Only one problem: They can't keep up demand as it is! Therefore, the best use of the extra cash is to vastly increase production so that they can lower the price, and increase the number of stores so they can improve service. Oh, and keep improving the quality of their product.
Hmm. They're already doing all of these things, and they STILL are generating annoyingly large quantities of spare cash.
Maybe they should become a bank. Or a charity. Or a foundation.
You know what? I'm fine with all those. But as a stockholder, I see absolutely no need for a dividend.
Slappy, is that you again? I love you, you little guy. So funny
AAAARRRRRGGGGGHHHHHHH!
I hate to shout, BUT BY WHAT RATIONALE DO YOU REGARD STOCKHOLDERS AND ANALYSTS AS TWO MUTUALLY EXCLUSIVE CLASSES OF PEOPLE???????????????????????????
The analysts that I have in mind are the analysts that own shares and that are studying the situation from the standpoint of what is best for shareholders. This ought to be obvious. Yet you, just like that other person who keeps making silly, contrived statements, proceeded from the contrived precept that analysts and not stockholders. And then you proceeded to add a really, really intelligent and informed angle to the whole debate by asserting that stock holders do not control the company directly, but do so only by electing board members to represent them. On this as well you are just plain wrong. Stockholders get initiatives placed on the ballots quite often. It happens with Apple. It varies from company to company. What you stated as a universal truth is nothing of the sort. I haven't checked into it, but unless it is expressly prohibited in the corporate bylaws, it would be possible for shareholders to force the payment of a dividend whether the board wants it or not. The statement you made is in effect a claim that in no corporation is it possible for shareholders to force a corporation to do anything that the board does not favor, but if you have ever received a ballot prior to an annual shareholder meeting, you would surely know that this is simply not correct.
Yeah... Analysts like Cramer who periodically buy/sell shares to manipulate them -- then brag about the churn.
Those aren't investors -- they're manipulators.
AAAARRRRRGGGGGHHHHHHH!
I hate to shout, BUT BY WHAT RATIONALE DO YOU REGARD STOCKHOLDERS AND ANALYSTS AS TWO MUTUALLY EXCLUSIVE CLASSES OF PEOPLE???????????????????????????
The analysts that I have in mind are the analysts that own shares and that are studying the situation from the standpoint of what is best for shareholders. This ought to be obvious. Yet you, just like that other person who keeps making silly, contrived statements, proceeded from the contrived precept that analysts and not stockholders. And then you proceeded to add a really, really intelligent and informed angle to the whole debate by asserting that stock holders do not control the company directly, but do so only by electing board members to represent them. On this as well you are just plain wrong. Stockholders get initiatives placed on the ballots quite often. It happens with Apple. It varies from company to company. What you stated as a universal truth is nothing of the sort. I haven't checked into it, but unless it is expressly prohibited in the corporate bylaws, it would be possible for shareholders to force the payment of a dividend whether the board wants it or not. The statement you made is in effect a claim that in no corporation is it possible for shareholders to force a corporation to do anything that the board does not favor, but if you have ever received a ballot prior to an annual shareholder meeting, you would surely know that this is simply not correct.
jragost gives way too much credit to the Board. Most Boards are puppets for Senior Mgmt that meet a few times a year. I'm sure when Jobs was Chairmen he ran the Board with an iron fist. 99.9999% of Apple's success was/is driven by their Sr Mgmt, engineers and all of their employees', certainly not the Board.
Dick Applebaum, you sound like a nice fellow.
Apple is way too large to be manipulated by hedge funds.
The reason a dividend makes sense is their are many large Value Fund Managers like Fidelity, Vanguard, T Rowe Price, etc that would LOVE to buy APPLE stock, but they are not allowed to since it does not pay a dividend. Also many retirees that live on a fixed income would welcome the chance to own Apple and receive a quarterly dividend.
Apple's growth is intact and would not be affected by a dividend.
I'm agnostic about a stock split, maybe you could explain to your grandchildren that a share of APPLE is VERY valuable and thats why it trades at $490(I'm not sure they would understand the concept of # of shares issued)
I am a nice fellow!
I did not suggest who is doing the manipulation -- just that manipulation is being done!
I believe that concentrating the AAPL holdings in a few large funds, as you suggest, is antithetical to long-term growth -- which is why I invested in the stock.
I would rather see Apple invest their cash in things that will maintain and improve long-term growth.
The split would dampen the effect of the manipulators and bring in the new generation of long-term investors.
Yeah... Analysts like Cramer who periodically buy/sell shares to manipulate them -- then brag about the churn.
Those aren't investors -- they're manipulators.
No one should seriously listen to Jim Cramer for investment advice.
He is an entertainer out for ratings and book sales.
This is a preposterous argument. The amount of cash Apple is sitting on is 5x greater than the market capitalization of Sony, about 16x greater than the market cap of HP, nearly 3x greater than the market cap of MS. This is what all the analysts keep pointing out. If the amount of money we are talking about were 100 trillion, you would still be making the same statements. At what point do you decide that it would make sense for Apple to pay a 3% dividend? What is the alternative that you propose?
I agree 100%. At some point, whether it's 100B or 500B or 1T, Apple will have to have a good explanation as to why it's withholding that cash from shareholders.
It's true that SJ didn't consider dividends. But there is a point where they cannot justify the size of the hoard. I'm guessing, along with other stockholders, that the day of the iDividend is rapidly approaching. And I agree that that is pushing up the stock price, along with the impending arrival of the iPad 3.
Apple has plenty of cash to pay the dividend without depleting their powerful cash hoard.
So you are claiming that to pay a 3% dividend, Apple would have to "repatriate" cash that otherwise they would not have to repatriate. Can you back this claim up with actual numbers? Given the rate that the cash pile is increasing, it just does not seem likely to me unless virtually all of the profit is being reaped overseas.
There's money and there's money. The money AAPL earned within US have a lot of potential use, so that worth a lot more than the money earned in e.g. Japan. That's why they're not gonna use the money earned in US to pay dividend or do buybacks. I mean, they want to be able to, at any time, e.g. to engage in bidding war against some hot tech companies, and judging from how much GOOG paid Motorola, they could need 10s of $B in US as reserve for that. The overseas money, they'd have to pay tax to bring it back, which they'd never do unless there's a tax holiday (the hit in earnings would be so big it's not happening).