If not a dividend (which IMO I would prefer Apple refrained from issuing just yet), my guess would be….
Massive investment into developing 'green' energy sources. This would benefit Apple be silencing critics, boosting Apple street cred, and generating IP of value into the future.
Apple could boast that it's data centers and products were manufactured using 100% green energy.
I'm not really a big fan of the 'green' movement, but I could see this being a positive and beneficial way to waste large piles of cash.
[Microsoft] overly split the stock to a point now that it will never go up for squat.
MSFT will never increase significantly in value because Microsoft will never again enjoy rapid earnings growth. Splitting the stock has nothing to do with it.
Apple could announce a 10 for 1 stock split and the effect on market cap would be negligible. The advantage of a stock split is that it would slightly increase liquidity for small investors, leading to negligible upward pressure on stock price. The disadvantage is that it would increase commissions for some investors, leading to negligible downward pressure on stock price. Which effect would be greater is anyone's guess. We can only say that the effect would be negligible.
Sharp Corp of Japan needs cash badly and Apple can pick them up cheap right now. This would help Apple detatch themselves from Samsung and give them their own large manufacturing facilities and even solar panel production for the roofs of their Apple Stores, new HQ, existing offices, and iCloud data centers.
If Sharp became financially unstable, that could be very dangerous for Apple right now. While Apple might not buy them outright, a huge percentage stake does make sense for many reasons.
It was Tim Cook who engineered a large portion of the outsourcing of Apple manufacturing to Taiwanese/Chinese firms in the first place. While Apple puts a decent amount of money into R&D, at the end of the day, the actual production of components and final assembly is still handled by 3rd parties. I live in Northern California and I still hear about the Elk Grove facility that is mostly empty and unused by Apple, years after it was built.
Based on that history, it seems somewhat unlikely that Apple would purposely choose to get into the manufacturing game again. Tim Cook seems perfectly happy to have the flexibility to pick and choose his suppliers based on the needs of the company and products. If Omnivision has the camera sensors you need today, but Sony has them tomorrow, just switch! PortalPlayer doesn't have the tech you need anymore, go with someone else! It seems the advantages of relying on 3rd party manufacturers still tends to outweigh the benefits of bringing component manufacturing or assembly in-house.
I'd like a stock buy back and for Apple to announce plans to split the stock. I'm expecting a dividend and an announcement of how successful this weekend's iPads were.
edit: I withdraw my buyback comment for a time when the stock market is suffering.
A stock buyback makes most sense when the market is suffering, and the stock is cheap.
Then forget AAPL and MSFT. Provide evidence that a dividend increases share price. There is no such evidence.
Irrelevant-it doesn't matter why they did it. The fact is that Microsoft's large one-time dividend decreased share price by roughly the amount of the dividend and the same has historically been true.
For example, look at dividends issued for mutual finds. Invariably, the mutual fund drops by roughly the amount of the dividend on the ex-dividend date.
"On the ex-dividend date, the share price will open at the previous day closing price minus the amount of the dividend."
But feel free to provide evidence to support your claim that a dividend would raise the share price.
Historically, you're wrong. Almost every time there has been a large one-time dividend (either mutual funds or stocks), the share price dropped by roughly the amount of the dividend -and that's exactly what basic principles would predict. Please show a single example where a large one-time dividend increased share price. There aren't any.
As for a steady dividend, there is also no evidence that it would increase dividends. In fact, if you look at historical values, dividend paying stocks tend to grow more slowly than non-dividend stocks because a company generally starts issuing a dividend when it is no longer growing. (There are exceptions. First, dividends tend to increase share value in emerging markets. There are studies in Pakistan and early in China's market history which confirm this. But the effect fails in developed markets. Second, if the company is a slow-growing, very mature stock, a dividend can have a positive effect, but that doesn't apply to Apple).
That's not to say that it would happen in this case, but there is absolutely no evidence that issuing a dividend would increase share price.
That hasn't happened historically. Investors (particularly institutional ones) are not so easily hoodwinked as you think.
Again, there's no historical evidence to support that claim.
I can't prove what would happen in the case of Apple. What I can show is that every time there's a large dividend, the share price drops on the ex-dividend date. That's true whether it's a stock or a mutual fund.
Possibly, but the point is that the TOTAL tax Apple would pay on repatriating earnings would not be any greater than if the money were earned in the U.S.
Again, you're wrong. Share buybacks DO increase the average share price - because there are fewer shares in circulation. It's simple math.
Or perhaps you're arguing that the multiple that investors use would be LOWER if Apple buys back shares? That's completely illogical. You're arguing that the investors would pay a GREATER multiple of Apple pays a dividend, leaving the same number of shares in circulation, but a lower multiple if they're taking share out of circulation. That just isn't a rational argument.
Again, forget Microsoft. Look up any other company that did a large one-time distribution. Or look up any mutual fund which did a large distribution. The share price drops by the amount of the distribution on the ex-dividend date.
Good thing no one would be investing based solely on your opinion. That would be completely irrational. Why in the world would the share price go up 15% if they announce an on-going 2% dividend? Furthermore, as pointed out above, there's no evidence that initiating a dividend causes ANY long term share price effect. But feel free to try to support your claim.
Jragosta-
Those quotes aren't mine, can you please fix your post and credit them to whoever made them??
MSFT will never increase significantly in value because Microsoft will never again enjoy rapid earnings growth. Splitting the stock has nothing to do with it.
Apple could announce a 10 for 1 stock split and the effect on market cap would be negligible. The advantage of a stock split is that it would slightly increase liquidity for small investors, leading to negligible upward pressure on stock price. The disadvantage is that it would increase commissions for some investors, leading to negligible downward pressure on stock price. Which effect would be greater is anyone's guess. We can only say that the effect would be negligible.
They split the stock 9 times. They've issued a dividend 33 times since their last split of 2002.
Microsoft on it's rise and massive split to generate low stock prices for more buy in which allowed them to smother and buy out competitors resulted in a race to the bottom PC Market with them the only OEM in town.
Apple does a race to the top in quality products and enjoys extremely modest PC market share and a consistently market in the embedded space for indispensible devices. They again don't have a monopoly.
They need no split and I doubt Apple will issue a split. Most of their money is in long-term securities. I don't see them doing a reverse stock buy or a split.
I see them investing in areas that will position them for future markets and will allow them to leverage those securities to buy materials in even larger quantities forcing their future competitors to wait.
I'd expect them to announce not just one but maybe 2 other near flagship campus projects that Steve most likely signed off on and co-designed along with the flag ship.
You don't spend several quarters discussing whether or not to buy back stock, issue a dividend and/or announce a split. You spend several quarters engaging in a future strategy already designed in conjunction with it's co-founder before he died.
Apple may not actually directly get into Manufacturing but they sure easily could invest ten billion in other Fab plans by already seasoned manufacturers ensuring them a guaranteed slot of scaling up in production for current and future roadmap products.
Material Science is where all the break throughs are happening and Apple will be investing in areas that they can get the most leverage out of against their perceived competitors.
The worst idea would be to pay dividends. Some analysts are quoted saying this would be great idea.... Apple should ditch Wall Street and go private with that cash. This $100 billion cash puts Apple in a great position to compete and the resources to invest in research. As soon as they hand out that cash, they'll go down that long gray road towards craptastic again.
I think Steve Jobs would never do it just to please Wall Street. A hard lesson he learned from being kicked out of Apple the first time.
A surprise announcement the Apple now owns Microsoft and Google, Steve Balmer and Eric Schmidt dressed in coveralls, shovels in hand ready to report to their new jobs planting apricot trees at Apple's new campus.
About the last thing Apple will want to do is get back into manufacturing. A better idea would be to set up Apple Labs in India or Israel or Singapore and employ engineers and lawyers to develop and patent technologies that might be useful to Apple in the future.
Quote:
Originally Posted by mdriftmeyer
[Microsoft] split the stock 9 times. They've issued a dividend 33 times since their last split of 2002.
Microsoft on it's rise and massive split to generate low stock prices for more buy in which allowed them to smother and buy out competitors resulted in a race to the bottom PC Market with them the only OEM in town.
Microsoft stamping out the competition had nothing to do with their stock splits. They are unrelated. It would be a stretch, but one could try to argue that stamping out the competition enabled the stock splits. There is no basis for an argument that the stock splits enabled stamping out the competition. If a stock split could enable any such thing, we would see hundreds of times more stock splits than we actually see.
How about buying a big ass laser and rights to the moon's surface to carve out an Apple logo on it? I think $100 billion could achieve that.
Moon's surface is not available for sale, just as Mars or anything outside of the Earth atmosphere. International conventions specify that quite clearly... Everyone outside of the USA wants to prevent the USA doing to Space what they did to Earth, or we'll have nowhere to go once this world is finally completely unusable due to (how's that called? oh yeah) "free enterprise with no morals".
Call me one of the crazy ones... but just Think Different with me for a second...
Nielsen estimates that the number of U.S. Television Homes is around 115 Million...
Apple has near 100 Billion dollars in the bank...
The cost of the Apple TV to build is near $65...
The cost to provide an Apple TV to every Television Home in the US would be about $7.5 billion dollars... less than 10% of their 100 billion reserve.
Lets speculate that Apple is poised to open the app store on the Apple TV... a 30% cut of every app purchased in 115 million homes... an Apple hardware presence in 115 million homes... a movie rental/purchase platform in 115 million homes... a potential gaming goldmine...
The networks would no longer be able to say no to Apple; it just wouldn't be smart business for them to resist at that point...
I have said it for years... The Apple TV is the most important piece of hardware in Apple's long term strategy... they classify it as a "hobby"... I classify it as the ultimate Trojan Horse...
I wouldn't be surprised if this is Apple's announcement... huge penetration gains in a market Apple is extremely interested in dominating... very low cost with huge returns... it's crazy... but it's just crazy enough to work.
You realise you're suggesting a hardware company give their hardware away for free, to subsidise content and software sales on which their margins are intentionally razor-thin? You realise also that they just put a new AppleTV on the market for $99 three days ago and people have already paid for them? You realise that giving away $99 worth of hardware for free just to saturate the market is legally classified as dumping and is an anticompetitive crime? Do you have any idea how hard it would be to ramp production of the AppleTV to produce over 100 million of the damn things?
Anyway, my best guess is acquisitions, large strategic acquisitions, possibly coupled with a dividend - either a small continuing one, or a largish (Say $20) one-off one.
As for who they should acquire, the obvious answers are any one or more of Twitter, a medium to large video game publisher (EA, the world Number 2, is only worth around $6 Billion so a smaller outfit or two would be dirt cheap) and maybe Adobe, though I'd have questions about whether the SEC & EU would be okay with that.
The worst idea would be to pay dividends. Some analysts are quoted saying this would be great idea.... Apple should ditch Wall Street and go private with that cash. This $100 billion cash puts Apple in a great position to compete and the resources to invest in research. As soon as they hand out that cash, they'll go down that long gray road towards craptastic again.
I think Steve Jobs would never do it just to please Wall Street. A hard lesson he learned from being kicked out of Apple the first time.
I don't think they will go private. All the directors make a fortune from their stock options.
Being quoted also means Apple fanbois can buy into the company, which probably encourages them to keep buying Apple kit.
You do realize that if a stock didn't drop the amount of the dividend after ex-date their would be an ARBITRAGE that would be exploited by hedge funds?
Come on guy stop being so pedantic, and STOP with the Microsoft comparisons.
APPLE IS NOT MICROSOFT
Weren't you the one that said the stock was going to drop if they didn't announce a dividend at the previous shareholder's meeting?
Comments
However I would like to see some major acquisitions intstead. ARM or Samsung would do nicely.
I know it wouldn't happen
Massive investment into developing 'green' energy sources. This would benefit Apple be silencing critics, boosting Apple street cred, and generating IP of value into the future.
Apple could boast that it's data centers and products were manufactured using 100% green energy.
I'm not really a big fan of the 'green' movement, but I could see this being a positive and beneficial way to waste large piles of cash.
[Microsoft] overly split the stock to a point now that it will never go up for squat.
MSFT will never increase significantly in value because Microsoft will never again enjoy rapid earnings growth. Splitting the stock has nothing to do with it.
Apple could announce a 10 for 1 stock split and the effect on market cap would be negligible. The advantage of a stock split is that it would slightly increase liquidity for small investors, leading to negligible upward pressure on stock price. The disadvantage is that it would increase commissions for some investors, leading to negligible downward pressure on stock price. Which effect would be greater is anyone's guess. We can only say that the effect would be negligible.
Sharp Corp of Japan needs cash badly and Apple can pick them up cheap right now. This would help Apple detatch themselves from Samsung and give them their own large manufacturing facilities and even solar panel production for the roofs of their Apple Stores, new HQ, existing offices, and iCloud data centers.
If Sharp became financially unstable, that could be very dangerous for Apple right now. While Apple might not buy them outright, a huge percentage stake does make sense for many reasons.
http://www.bloomberg.com/news/2012-0...rt-of-day.html
It was Tim Cook who engineered a large portion of the outsourcing of Apple manufacturing to Taiwanese/Chinese firms in the first place. While Apple puts a decent amount of money into R&D, at the end of the day, the actual production of components and final assembly is still handled by 3rd parties. I live in Northern California and I still hear about the Elk Grove facility that is mostly empty and unused by Apple, years after it was built.
Based on that history, it seems somewhat unlikely that Apple would purposely choose to get into the manufacturing game again. Tim Cook seems perfectly happy to have the flexibility to pick and choose his suppliers based on the needs of the company and products. If Omnivision has the camera sensors you need today, but Sony has them tomorrow, just switch! PortalPlayer doesn't have the tech you need anymore, go with someone else! It seems the advantages of relying on 3rd party manufacturers still tends to outweigh the benefits of bringing component manufacturing or assembly in-house.
I'd like a stock buy back and for Apple to announce plans to split the stock. I'm expecting a dividend and an announcement of how successful this weekend's iPads were.
edit: I withdraw my buyback comment for a time when the stock market is suffering.
A stock buyback makes most sense when the market is suffering, and the stock is cheap.
Let's hope Apple just keeps it in the bank. Times will be tough one day. Guaranteed. History has proven that again and again.
True, but will times ever be so tough that Apple will need over $100Bn to bail them out? Has any company ever held such a large cash reserve?
Then forget AAPL and MSFT. Provide evidence that a dividend increases share price. There is no such evidence.
Irrelevant-it doesn't matter why they did it. The fact is that Microsoft's large one-time dividend decreased share price by roughly the amount of the dividend and the same has historically been true.
For example, look at dividends issued for mutual finds. Invariably, the mutual fund drops by roughly the amount of the dividend on the ex-dividend date.
It is explained here:
http://www.ehow.com/info_8159878_eff...are-price.html
"On the ex-dividend date, the share price will open at the previous day closing price minus the amount of the dividend."
But feel free to provide evidence to support your claim that a dividend would raise the share price.
Historically, you're wrong. Almost every time there has been a large one-time dividend (either mutual funds or stocks), the share price dropped by roughly the amount of the dividend -and that's exactly what basic principles would predict. Please show a single example where a large one-time dividend increased share price. There aren't any.
As for a steady dividend, there is also no evidence that it would increase dividends. In fact, if you look at historical values, dividend paying stocks tend to grow more slowly than non-dividend stocks because a company generally starts issuing a dividend when it is no longer growing. (There are exceptions. First, dividends tend to increase share value in emerging markets. There are studies in Pakistan and early in China's market history which confirm this. But the effect fails in developed markets. Second, if the company is a slow-growing, very mature stock, a dividend can have a positive effect, but that doesn't apply to Apple).
That's not to say that it would happen in this case, but there is absolutely no evidence that issuing a dividend would increase share price.
That hasn't happened historically. Investors (particularly institutional ones) are not so easily hoodwinked as you think.
Again, there's no historical evidence to support that claim.
I can't prove what would happen in the case of Apple. What I can show is that every time there's a large dividend, the share price drops on the ex-dividend date. That's true whether it's a stock or a mutual fund.
Possibly, but the point is that the TOTAL tax Apple would pay on repatriating earnings would not be any greater than if the money were earned in the U.S.
Again, you're wrong. Share buybacks DO increase the average share price - because there are fewer shares in circulation. It's simple math.
Or perhaps you're arguing that the multiple that investors use would be LOWER if Apple buys back shares? That's completely illogical. You're arguing that the investors would pay a GREATER multiple of Apple pays a dividend, leaving the same number of shares in circulation, but a lower multiple if they're taking share out of circulation. That just isn't a rational argument.
Again, forget Microsoft. Look up any other company that did a large one-time distribution. Or look up any mutual fund which did a large distribution. The share price drops by the amount of the distribution on the ex-dividend date.
Good thing no one would be investing based solely on your opinion. That would be completely irrational. Why in the world would the share price go up 15% if they announce an on-going 2% dividend? Furthermore, as pointed out above, there's no evidence that initiating a dividend causes ANY long term share price effect. But feel free to try to support your claim.
Jragosta-
Those quotes aren't mine, can you please fix your post and credit them to whoever made them??
MSFT will never increase significantly in value because Microsoft will never again enjoy rapid earnings growth. Splitting the stock has nothing to do with it.
Apple could announce a 10 for 1 stock split and the effect on market cap would be negligible. The advantage of a stock split is that it would slightly increase liquidity for small investors, leading to negligible upward pressure on stock price. The disadvantage is that it would increase commissions for some investors, leading to negligible downward pressure on stock price. Which effect would be greater is anyone's guess. We can only say that the effect would be negligible.
They split the stock 9 times. They've issued a dividend 33 times since their last split of 2002.
Microsoft on it's rise and massive split to generate low stock prices for more buy in which allowed them to smother and buy out competitors resulted in a race to the bottom PC Market with them the only OEM in town.
Apple does a race to the top in quality products and enjoys extremely modest PC market share and a consistently market in the embedded space for indispensible devices. They again don't have a monopoly.
They need no split and I doubt Apple will issue a split. Most of their money is in long-term securities. I don't see them doing a reverse stock buy or a split.
I see them investing in areas that will position them for future markets and will allow them to leverage those securities to buy materials in even larger quantities forcing their future competitors to wait.
I'd expect them to announce not just one but maybe 2 other near flagship campus projects that Steve most likely signed off on and co-designed along with the flag ship.
You don't spend several quarters discussing whether or not to buy back stock, issue a dividend and/or announce a split. You spend several quarters engaging in a future strategy already designed in conjunction with it's co-founder before he died.
Apple may not actually directly get into Manufacturing but they sure easily could invest ten billion in other Fab plans by already seasoned manufacturers ensuring them a guaranteed slot of scaling up in production for current and future roadmap products.
Material Science is where all the break throughs are happening and Apple will be investing in areas that they can get the most leverage out of against their perceived competitors.
I think Steve Jobs would never do it just to please Wall Street. A hard lesson he learned from being kicked out of Apple the first time.
Go AAPL...
[Microsoft] split the stock 9 times. They've issued a dividend 33 times since their last split of 2002.
Microsoft on it's rise and massive split to generate low stock prices for more buy in which allowed them to smother and buy out competitors resulted in a race to the bottom PC Market with them the only OEM in town.
Microsoft stamping out the competition had nothing to do with their stock splits. They are unrelated. It would be a stretch, but one could try to argue that stamping out the competition enabled the stock splits. There is no basis for an argument that the stock splits enabled stamping out the competition. If a stock split could enable any such thing, we would see hundreds of times more stock splits than we actually see.
How about buying a big ass laser and rights to the moon's surface to carve out an Apple logo on it? I think $100 billion could achieve that.
Moon's surface is not available for sale, just as Mars or anything outside of the Earth atmosphere. International conventions specify that quite clearly... Everyone outside of the USA wants to prevent the USA doing to Space what they did to Earth, or we'll have nowhere to go once this world is finally completely unusable due to (how's that called? oh yeah) "free enterprise with no morals".
I think it will likely be a divdend or buy back. Tim's way of putting down a marker now he's in charge.
However I would like to see some major acquisitions intstead. ARM or Samsung would do nicely.
I know it wouldn't happen
ARM? I don't see why not.
but Samsung? It seems like most AI'er still seem to believe that Samsung == Foxconn (or Apple == Walmart).
Maybe they will state no dividend and no buy back to end the speculation and stabilise the share price.
Call me one of the crazy ones... but just Think Different with me for a second...
Nielsen estimates that the number of U.S. Television Homes is around 115 Million...
Apple has near 100 Billion dollars in the bank...
The cost of the Apple TV to build is near $65...
The cost to provide an Apple TV to every Television Home in the US would be about $7.5 billion dollars... less than 10% of their 100 billion reserve.
Lets speculate that Apple is poised to open the app store on the Apple TV... a 30% cut of every app purchased in 115 million homes... an Apple hardware presence in 115 million homes... a movie rental/purchase platform in 115 million homes... a potential gaming goldmine...
The networks would no longer be able to say no to Apple; it just wouldn't be smart business for them to resist at that point...
I have said it for years... The Apple TV is the most important piece of hardware in Apple's long term strategy... they classify it as a "hobby"... I classify it as the ultimate Trojan Horse...
I wouldn't be surprised if this is Apple's announcement... huge penetration gains in a market Apple is extremely interested in dominating... very low cost with huge returns... it's crazy... but it's just crazy enough to work.
You realise you're suggesting a hardware company give their hardware away for free, to subsidise content and software sales on which their margins are intentionally razor-thin? You realise also that they just put a new AppleTV on the market for $99 three days ago and people have already paid for them? You realise that giving away $99 worth of hardware for free just to saturate the market is legally classified as dumping and is an anticompetitive crime? Do you have any idea how hard it would be to ramp production of the AppleTV to produce over 100 million of the damn things?
Anyway, my best guess is acquisitions, large strategic acquisitions, possibly coupled with a dividend - either a small continuing one, or a largish (Say $20) one-off one.
As for who they should acquire, the obvious answers are any one or more of Twitter, a medium to large video game publisher (EA, the world Number 2, is only worth around $6 Billion so a smaller outfit or two would be dirt cheap) and maybe Adobe, though I'd have questions about whether the SEC & EU would be okay with that.
The worst idea would be to pay dividends. Some analysts are quoted saying this would be great idea.... Apple should ditch Wall Street and go private with that cash. This $100 billion cash puts Apple in a great position to compete and the resources to invest in research. As soon as they hand out that cash, they'll go down that long gray road towards craptastic again.
I think Steve Jobs would never do it just to please Wall Street. A hard lesson he learned from being kicked out of Apple the first time.
I don't think they will go private. All the directors make a fortune from their stock options.
Being quoted also means Apple fanbois can buy into the company, which probably encourages them to keep buying Apple kit.
jragosta, is at it again...
You do realize that if a stock didn't drop the amount of the dividend after ex-date their would be an ARBITRAGE that would be exploited by hedge funds?
Come on guy stop being so pedantic, and STOP with the Microsoft comparisons.
APPLE IS NOT MICROSOFT
Weren't you the one that said the stock was going to drop if they didn't announce a dividend at the previous shareholder's meeting?