Apple preparing $17B bond sale to help fund massive share buyback

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Comments

  • Reply 21 of 33
    tcaseytcasey Posts: 199member

    Looks like apple is on a good run.

  • Reply 22 of 33
    Quote:

    Originally Posted by SolipsismX View Post



    It's a good time to be holding AAPL.

    Yeah.... as of the time of writing, today:

     

    GOOG  –2.28%

    LNKD   –9.03%

    TSLA   –4.05%

    TWTR  –4.52%

    AMZN  –4.38%

    FB       –4.26%

    NFLX   –6.24%

    AAPL   +2.08%

  • Reply 23 of 33
    drewys808drewys808 Posts: 547member
    It seems to me that this type of capital reallocation is almost a type of insider trading... in a good way.


    Assuming that the CEO/board are intending to do what their fiduciary duties require, can't we also assume that the CEO/board know something that the market doesn't? Or is my thinking off base?
  • Reply 24 of 33
    Issuing bonds at probably >2% to 5% seems a great idea if you thing your company is going to do well in the future. Retiring stock that is currently yielding 2.3% and about to rise is an immediate offsetting savings. From a tax perspective, I am no accountant, but I believe the dividends come out of profits taxed at corporate rates whereas bond interest is an expense and therefore reduced taxable profits and therefore tax. Seems a good deal all round to me to deliver value to the shareholders.
  • Reply 25 of 33
    knowitallknowitall Posts: 1,648member
    sog35 wrote: »
    average stock price of buyback $485
    stock price today $590

    Apple has saved shareholders over $10,000,000,000 in share appreciation.
    GTFO you troll.  You don't know anything about capital allocation so you should zip it.

    Apple thinks the shares are undervalued and thats why they authorized purchases of $90,000,000,000.  Apple knows EXACTLY what they will be releasing the next 2 years.  Do you?  Then STFU.

    I do know something about good manners, you clearly don't.
    That could explain your focus on money.
  • Reply 26 of 33
    knowitallknowitall Posts: 1,648member
    Yeah.... as of the time of writing, today:

    GOOG  –2.28%
    LNKD   –9.03%
    TSLA   –4.05%
    TWTR  –4.52%
    AMZN  –4.38%
    FB       –4.26%
    NFLX   –6.24%
    AAPL   +2.08%

    Wait a few days when someone sneezes ...
  • Reply 27 of 33
    knowitallknowitall Posts: 1,648member
    sog35 wrote: »

    Questioning the decision making of the most valuable and profitable company in the world deserves that response from me.

    Do you really think in your wildest dreams that Apple would spend $90,000,000,000 on something they don't think will help shareholders and the company?

    Saying Apple is lending money to gamblers and has ran out of ideas is beyond stupidity.  And I will continue to expose people like you, good manners or not.

    And WTF are you talking about focusing on money.  This topic is about the $17B bond and $90B buyback.  it is about money.  You are the one off topic talking about satelites in the north pole so you need to GTFO.

    So, you don't understand my remarks. That would explain the anger.
  • Reply 28 of 33
    mode 5mode 5 Posts: 59member
    I know nothing about how this stuff works, so this is probably a silly question, but if Apple USA is raising capital through a bond sale that can be done in international markets, what's to stop Apple using its overseas cash to buy the bonds?

    Apple international could own Apple USA's debt, couldn't it?
  • Reply 29 of 33
    crowleycrowley Posts: 10,453member
    I'm sure the SEC must have rules prohibiting that.
  • Reply 30 of 33
    mode 5mode 5 Posts: 59member
    Quote:

    Originally Posted by Crowley View Post



    I'm sure the SEC must have rules prohibiting that.

     

    I wonder what the negative would be from their perspective? Apple wouldn't be repatriating it's overseas cash, just using it to fund AAPL activities within the US. As a debt, the cash is still technically offshore even though it's working for Apple in the US. 

  • Reply 31 of 33
    crowleycrowley Posts: 10,453member
    mode 5 wrote: »
    I wonder what the negative would be from their perspective? Apple wouldn't be repatriating it's overseas cash, just using it to fund AAPL activities within the <span style="line-height:1.4em;">US. As a debt, </span>
    the<span style="line-height:1.4em;"> cash is still technically offshore even though it's working for Apple in the US. </span>
    The negative being a major incentive to not repatriate cash. Allowing selling debt to an offshore subsidiary without limitation or cost would be a pretty gaping hole in any revenue system, as there would be no need to formally repatriate cash in order to put it to work in your home country.
  • Reply 32 of 33
    mode 5mode 5 Posts: 59member
    Quote:

    Originally Posted by Crowley View Post



    The negative being a major incentive to not repatriate cash. 

     

    But isn't that the problem in the first place? Apple's acquisition of offshore debts for its US based activities is the result of the disincentive that already exists to bringing offshore cash home. Far from bringing its cash home now, this is Apple deciding that it's more profitable to move its US based profits overseas as well. By taking on foreign debt, Apple will further reduce its tax burden in the US, meanwhile directly, or indirectly, Apple's international stock piles of cash will offset / neutralise the cost of that debt effectively at the rate where it's sourced. They'll pay overseas tax rates on their growing overseas cash piles, but obviously they've done the numbers and discovered it's more profitable to grow a foreign debt in the US and pay their taxes overseas.  

     

    The bottom line, is the bottom line! They no longer care where the cash is stashed, so long as they're maximising their return on it. Poor old Uncle Sam, however, is just going to end up going hungrier and hungrier.  

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