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

Posted:
in AAPL Investors edited January 2014
Speculation abounds as to what Apple will do with its $137 billion cash pile, but one investment officer believes Cupertino will put the rumors to rest by announcing its plans for the massive cash hoard by next month.

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


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

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

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

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

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

What exactly Apple should do with its considerable cash holdings has been the topic of much discussion as the pile gets bigger. Last month saw a small revolt on the part of one investor, who believed Apple should issue preferred stock, though that has since died down. A good portion of the assets sits overseas, prompting calls from assorted governments for the repatriation of Apple's stashed earnings so that it can be taxed.
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Comments

  • Reply 1 of 56
    neilmneilm Posts: 574member
    Gosh, what a terrible, terrible problem to have.
    No wonder Apple is doomed...
  • Reply 2 of 56
    majjomajjo Posts: 574member
    If they return a good portion to shareholders, I'll probably buy in again
  • Reply 3 of 56
    emrulemrul Posts: 26member
    It is a problem. Think about it, Fed is printing dollars faster than Apple can shift iPhones so each dollar becomes worth less and less... Apple may as well burn that money for all the good it does sitting in its coffers.
  • Reply 4 of 56
    macvictamacvicta Posts: 346member


    They should use the money to buy gold.

  • Reply 5 of 56
    slurpyslurpy Posts: 5,111member


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

  • Reply 6 of 56
    buzzzbuzzz Posts: 84member
    They should start a stock buy back.
  • Reply 7 of 56
    jason98jason98 Posts: 763member

    Quote:

    Originally Posted by majjo View Post



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


     


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


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


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


    Yeah, and kill [email protected] Google.  image

  • Reply 8 of 56
    Each dollar becomes worth less and less? Oh really emrul? Inflation for 2012 was... drum roll ...
    1.7%!!! Dollars kept for strategic purposes only seem like a brilliant idea when they get used. What will everyone say when Apple buys Corning (makers of Gorilla Glass), for example, which has a market of $18.5 billion and would probably cost at least $30 billion. I think Cook et. al. actually do know what they're doing.
  • Reply 9 of 56
    majjomajjo Posts: 574member
    jason98 wrote: »
    That would be a terrible way of wasting hard-earned money.
    Just buy out Wolfram Alpha, Yelp, Sharp, and TSMC to secure future operations.
    Also ask IBM to let Watson technology to get added to Siri stack.
    Yeah, and kill [email protected] Google.  <img alt="1biggrin.gif" id="user_yui_3_7_3_1_1363034418444_1411" src="http://forums-files.appleinsider.com/images/smilies/1biggrin.gif" style="line-height:1.231;" name="user_yui_3_7_3_1_1363034418444_1411">
    well, currently they're not doing anything with it, which is quite frustrating to shareholders.
  • Reply 10 of 56
    magman1979magman1979 Posts: 1,110member
    I need to figure out how I can become an "analyst", that way, I can get paid huge bucks whilst talking out of my ass all day long, that would be awesome! /s
  • Reply 11 of 56
    noelosnoelos Posts: 102member
    "well, currently they're not doing anything with it, which is quite frustrating to shareholders."

    I think the offices of Braeburn Capital only moved; they're still investing that cash pile not sticking it under the bed ... though what a big bed that would be.
  • Reply 12 of 56
    genovellegenovelle Posts: 863member
    majjo wrote: »
    well, currently they're not doing anything with it, which is quite frustrating to shareholders.
    The fact is they don't really know what they are doing until they reveal it. They have implemented a buy back, they started paying dividends after many years of refusing to do so. I think Steve had the right idea. Don't give them anything. Give an inch and they want a mile. Give them nothing and they are content with that. Notice, the stock started tanking after they started pandering to stock holders.
  • Reply 13 of 56
    I'm not one to jump on mergers and acquisitions as a panacea, or as a cheap trick to boost revenue. But Apple could certainly pick up a few companies that would assist in services, payments, maps, and other core/future interests. I'd start with Foursquare, Square, and possibly Waze. The former two can assist tremendously with points of interest. Another thing they may want to consider is investing in start-ups like Google Ventures does. Not to just copy Google, but the fact is many entrepreneurs would value a VC type relationship with Apple.
  • Reply 14 of 56
    solipsismxsolipsismx Posts: 19,566member
    genovelle wrote: »
    The fact is they don't really know what they are doing until they reveal it. They have implemented a buy back, they started paying dividends after many years of refusing to do so. I think Steve had the right idea. Don't give them anything. Give an inch and they want a mile. Give them nothing and they are content with that. Notice, the stock started tanking after they started pandering to stock holders.

    Give them an inch and they'll take a foot and before you know it you won't have a leg to stand on.
  • Reply 15 of 56
    tallest skiltallest skil Posts: 43,399member


    Originally Posted by jason98 View Post

    Yeah, and kill [email protected] Google.  image


     


    I wonder… 


     


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


     


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

  • Reply 16 of 56
    They can give it to me....

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

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

    They need to amend that Microsoft story to be 'if you had bought tens of thousands of shares in Microsoft in the 70's....' :rolleyes:
  • Reply 17 of 56
    majjomajjo Posts: 574member
    I wonder… 

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

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

    And in doing so, they have become Microsoft.
  • Reply 18 of 56
    gcguygcguy Posts: 14member
    stevejay27 wrote: »
    Each dollar becomes worth less and less? Oh really emrul? Inflation for 2012 was... drum roll ...
    1.7%!!! Dollars kept for strategic purposes only seem like a brilliant idea when they get used. What will everyone say when Apple buys Corning (makers of Gorilla Glass), for example, which has a market of $18.5 billion and would probably cost at least $30 billion. I think Cook et. al. actually do know what they're doing.

    The inflation numbers are so doctored it's insane. Just like the unemployment numbers. Don't believe the Obumma hype machine.
  • Reply 19 of 56
    solipsismxsolipsismx Posts: 19,566member
    gcguy wrote: »
    The inflation numbers are so doctored it's insane. Just like the unemployment numbers. Don't believe the Obumma hype machine.

    Right?¡ If only we could go back to the time right before Bush left office when everything was so great¡
  • Reply 20 of 56
    tallest skiltallest skil Posts: 43,399member


    Originally Posted by majjo View Post

    And in doing so, they have become Microsoft.


     


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

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