Apple to hold investor call for first-time bond offering in euros - report

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  • Reply 21 of 116
    melgrossmelgross Posts: 33,573member

    I believe the answer to 'why not use cash' is - if you can borrow at (for example) 2% and make (for example) 10% with the cash you have than you still make 8% total where as if you just use cash you lose that ability to make anything. 

    Someone who understands this better can correct me if that's not right. This being the internet, I'm sure he/she will.

    Apple has stated, over the years, that their policy for investments is maintaince of capital. That's a conservative policy. Too many companies that attempt to hedge currencies, or make money with their cash tend to lose some of it. When that much money is available, it's also difficult to invest without roiling the markets.

    For example, even if the U.S. government changed to rules, and allowed foreign profits back into the country wothout having to pay those large taxes, Apple would need to take years to do so. If they withdrew all that money and sold all the foreign investments at once, banks could fail, and intruments could drop precipiticely. They would need to ease out. US corporations hold over $1trillion overseas, a tremendous number. Out GNP is about $17 trillion, so you can see what a large number that is.
  • Reply 22 of 116
    Originally Posted by melgross View Post

    ...banks could fail...



    Isn’t that their problem?

  • Reply 23 of 116
    melgrossmelgross Posts: 33,573member
    jsmythe00 wrote: »
    Me? I'm tired of these companies skirting around not paying tax. I had a 27% effective tax rate and make below 60k. You have billion dollar corporations with a NEGATIVE effective tax rate.

    WTF. If you're not going to pay your taxes then tariffs the $hit out of their products. You want to sell your products in your homeland country? You pay your tax or they don't sell.

    This isn't just directed to Apple BTW. Im pro apple(typing this out on an IP5S...using SwiftKey keyboard). It's for all corporations that push the tax burden on the working class.

    Well, Apple, for example, paid a total tax rate of 26.1% last quarter. But their US tax rate was higher. My estimate is about 32%. That's one of the highest, if not the highest of all large companies here. And then there is the State taxes they paid, which was about $900 million. Local taxes too.

    Yes, we can get ticked at large companies (GE, for example) that pay no taxes, or even get money back. But that our fault too. We vote for the people who propose those schemes. We can vote them out too. But people are too lazy to really think.
  • Reply 24 of 116
    Quote:

    Originally Posted by bradipao View Post



    I think that they can use domestic cash only...

    I am sorry, but I am not following your statement: "...use domestic cash only". For what exactly? What do you think I was referring to?

  • Reply 25 of 116
    Quote:

    Originally Posted by melgross View Post



    They would need to bring the money back here in order to do that. This way, the bonds are backed by the cash and investments, but won't be directly paid back by them.



    And I'm also trying to find out when the call is being done. If it's being done in the EU, then with the time difference, it could be held while we're writing.

    I think you're right about that.

     

    Afaik, the call is not public.

  • Reply 26 of 116
    Quote:
    Originally Posted by melgross View Post



    Apple is taking advantage of the fact that the Euro has been dropping relative to the dollar. That would be in addition to interest rates offered there. But they aren't just buying bonds in Euros.

    But then it's puzzling that they're issuing variable rate notes. You'd think they'd want to lock in the historically low fixed rates.

     

    Scratch that. Only the first two tranches seem to be variable rate. The fact that there is a "%" against the next four suggests they're likely fixed rate.

  • Reply 27 of 116
    fracfrac Posts: 480member
    After a week in bed with Delhi Belly, I can offer this definitive statement.

    This [I]could[/I] be a good thing, it [I]might[/I] actually happen [I]If[/I] - even without the planets [I]Improbably[/I] aligning, [I]perhaps[/I], Apple, [I]conceivably[/I] and [I]for all one knows[/I], views the [I]possibility[/I] as a [I]feasible[/I] option, which [I]may[/I] offer [I]unimaginable[/I] and [I]untold[/I] benefits [I]unforeseen[/I] in normal [I]unquantifiable[/I] and [I]possible[/I] scenarios.
    That [I]perchance[/I]...about covers it.
  • Reply 28 of 116
    melgrossmelgross Posts: 33,573member

    Isn’t that their problem?

    Do you really want the EU regulators to point at Apple, publicly, and say that the reason those banks failed was that Apple withdrew all their accounts, and that it was responsible for economic turmoil? How would that affect consumer attitudes towards Apple? Do you think it would help Apple's sales and reputation?
  • Reply 29 of 116
    melgrossmelgross Posts: 33,573member
    I think you're right about that.

    Afaik, the call is not public.

    Well, that's too bad. But Apple's stock has hit $109.44 last I looked. Perhaps it's happening now.
  • Reply 30 of 116
    Quote:
    Originally Posted by melgross View Post

     
    Quote:
    Originally Posted by jsmythe00 View Post



    Me? I'm tired of these companies skirting around not paying tax. I had a 27% effective tax rate and make below 60k. You have billion dollar corporations with a NEGATIVE effective tax rate.



    WTF. If you're not going to pay your taxes then tariffs the $hit out of their products. You want to sell your products in your homeland country? You pay your tax or they don't sell.



    This isn't just directed to Apple BTW. Im pro apple(typing this out on an IP5S...using SwiftKey keyboard). It's for all corporations that push the tax burden on the working class.




    Well, Apple, for example, paid a total tax rate of 26.1% last quarter. But their US tax rate was higher. My estimate is about 32%. That's one of the highest, if not the highest of all large companies here. And then there is the State taxes they paid, which was about $900 million. Local taxes too.



    Yes, we can get ticked at large companies (GE, for example) that pay no taxes, or even get money back. But that our fault too. We vote for the people who propose those schemes. We can vote them out too. But people are too lazy to really think.

    Not to mention that we have the highest corporate tax rate among the leading industrialized countries in the world today (incl. China), and a territorial worldwide taxation system. (Sheesh, my brain feels like molasses today..... :\)

  • Reply 31 of 116
    melgrossmelgross Posts: 33,573member
    But then it's puzzling that they're issuing variable rate notes. You'd think they'd want to lock in the historically low fixed rates.

    Scratch that. Only the first two tranches seem to be variable rate. The fact that there is a "%" against the next four suggests they're likely fixed rate.

    That's why I really want in on that call. They must have good reasons. I'd love to hear them. Likely we'll know much of it later.
  • Reply 32 of 116
    melgrossmelgross Posts: 33,573member
    Not to mention that we have the highest corporate tax rate among the leading industrialized countries in the world today (incl. China), and a territorial worldwide taxation system. (Sheesh, my brain feels like molasses today..... :\ )

    Our corporate tax system was set when US companies sold most of their product here. Foreign sales were a small portion of their sales. But now, with multinational corporations being based here, the situation is different. The corporate tax system needs changes. But companies like the system the way it is, for the most part. Corporate minded representatives work to keep the status quo. While my economic views tend somewhat to the left of the Republican Party, as its moved to the right, along with the Democratic Party, I disagree with the Democratic position that doesn't want to eliminate the additional taxes on foreign earnings. So Apple would have to pay the difference between their foreign taxes, and the US taxes they actually paid. People get it wrong when they state that foreign earnings would be taxed at 35%. It's the difference between what their percentage outside is, and their US rate. So while it's not quite as onerous as most people think, it still adds up.

    Republicans have, over the years, proposed a 25% corporate tax rate, and corporations have supported that. Democrats have also proposed a 25% corporate tax rate, but only if loopholes are closed. That has been vehemently opposed by corporations and the Republican Party. Apple has come out in favor of it, because they would be paying less US taxes. But other corporations would be paying a lot more, and are against it. As the Republican Party prides itself as being the business friendly party, it's understanderable as to why they oppose it too.
  • Reply 33 of 116
    Originally Posted by melgross View Post

    Do you really want the EU regulators to point at Apple, publicly, and say that the reason those banks failed was that Apple withdrew all their accounts, and that it was responsible for economic turmoil? How would that affect consumer attitudes towards Apple? Do you think it would help Apple's sales and reputation?

     

    They’ll do it anyway. *shrug* What has happened to everyone in the past who has whined “IT’S APPLE’S FAULT WE FAILED”? Apple ignores them and they go on about their business. Maybe these banks should diversify from just holding US overseas earnings. I don’t see them complaining (in reverse) that their respective countries don’t double tax their overseas earnings. If Apple et. al. repatriating would really make them fail, they ought to have a plan in place for that; repatriation seems like an inevitability, not a possibility.

  • Reply 34 of 116
    melgross wrote: »
    Do you really want the EU regulators to point at Apple, publicly, and say that the reason those banks failed was that Apple withdrew all their accounts, and that it was responsible for economic turmoil? How would that affect consumer attitudes towards Apple? Do you think it would help Apple's sales and reputation?

    Isn't that rather far fetched? If the environment became favorable for Apple to repatriate their overseas billions, it would also be favorable for GE, etc. It would be unlikely Apple would be demonized for actions of many high-profile companies..
  • Reply 35 of 116
    melgrossmelgross Posts: 33,573member
    They’ll do it anyway. *shrug* What has happened to everyone in the past who has whined “IT’S APPLE’S FAULT WE FAILED”? Apple ignores them and they go on about their business. Maybe these banks should diversify from just holding US overseas earnings. I don’t see them complaining (in reverse) that their respective countries don’t double tax their overseas earnings. If Apple et. al. repatriating would really make them fail, they ought to have a plan in place for that; repatriation seems like an inevitability, not a possibility.

    Thats a rather simplistic view.
  • Reply 36 of 116
    melgrossmelgross Posts: 33,573member
    Isn't that rather far fetched? If the environment became favorable for Apple to repatriate their overseas billions, it would also be favorable for GE, etc. It would be unlikely Apple would be demonized for actions of many high-profile companies..

    No, it's not. Look at the latest EU bank findings. A lot of banks are tottering. A number have been declared insolvent, and will either be closed down, or merged with stronger banks. Why? Because they don't have enough deposits to cover their loans, as well as other reasons. If Apple takes billions out of these banks, then they will be even less stable. More might fail. If they sell instruments (stocks, bonds, etc) in large amounts, then those instruments will fall. With a recession looming in the EU Zone, this will just make things worse. If Microsoft follows, and they have the second largest amount there, then we will be blamed for whatever fallout occurs.

    It's not far fetched at all. Again, US corporations have over $1trillion abroad. A lot of that in in the EU. It's so much that it constitutes over 5% of all investment money in the region. It's actually growing faster than the combined economies in the region.
  • Reply 37 of 116
    Originally Posted by melgross View Post

    Thats a rather simplistic view.

     

    Sure is. But explain why it’s Apple’s responsibility to keep European banks from failing. 

     

    It's actually growing faster than the combined economies in the region.


     

    Really puts into perspective who’s still the top dog globally.

  • Reply 38 of 116
    dnd0psdnd0ps Posts: 253member
    Quote:

    Originally Posted by digitalclips View Post



    If the $ continues to strengthen against European currencies I'd suggest Apple buying England and making it the 51st State. Wales, Scotland and N. Ireland could become Celtica or some new a catchy name. I admit I am unsure of the tax ramifications though.



    XD

     

    Yeah, it's about time someone got rid of that old hag in Buckingham Palace and installed a republican form of government. Apple Store at Buckingham Palace, anyone?

  • Reply 39 of 116
    melgross wrote: »
    No, it's not. Look at the latest EU bank findings. A lot of banks are tottering. A number have been declared insolvent, and will either be closed down, or merged with stronger banks. Why? Because they don't have enough deposits to cover their loans, as well as other reasons. If Apple takes billions out of these banks, then they will be even less stable. More might fail. If they sell instruments (stocks, bonds, etc) in large amounts, then those instruments will fall. With a recession looming in the EU Zone, this will just make things worse. If Microsoft follows, and they have the second largest amount there, then we will be blamed for whatever fallout occurs.

    It's not far fetched at all. Again, US corporations have over $1trillion abroad. A lot of that in in the EU. It's so much that it constitutes over 5% of all investment money in the region. It's actually growing faster than the combined economies in the region.

    More evidence that "stimulus" is and has always been a Keynesian fraud.
  • Reply 40 of 116
    melgrossmelgross Posts: 33,573member
    Sure is. But explain why it’s Apple’s responsibility to keep European banks from failing. 

    Really puts into perspective who’s still the top dog globally.

    Is it their responsibility, or something else? Corporate responsibility would be to do whatever is legal to benefit shareholders the most, over the long term. Causing banks to fail, and help push a region towards recession isn't in a company's best interest. It wouldn't be just Apple, of course.
    Since over 60% of Apple's business is now foreign, if Apple showed a lack of concern, that would hurt them in no versus ways. While citizens in the US have no loyalty, or patriotism when looking for the latest bargain. Many people in other countries do. I CPU,d see Apple's sales falling if, say, the Chinese government took it as a way to rail even more against Apple, and to restrict their sales in China. The EU also shows hostility towards US companies, not allowing mergers between two US based companies, not allowing them to buy companies based there, etc. this would only make the paranoia worse.

    And for what! Almost no gain on USA companies parts.
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