Not me. A dividend does not historically increase the share price of a growth stock. For example, look at the big Microsoft one-time dividend a year ago. The share price dropped by almost exactly the amount of the dividend.
And Microsoft's share price growth has been far lower than Apple's - and MS offers a dividend and Apple does not. There's no evidence that a dividend increases the share price of growth stocks - and people like Warren Buffet are staunchly opposed.
Both terrible examples. In both cases, Apple's success depends on having access to all content and carriers. Choosing only one puts them in competition with key partners.
That's not at all true. A large one-time dividend causes a drop in share price roughly equal to the value of the dividend. If it's an ongoing dividend, there's no evidence that dividends are correlated with share price. Some of the fastest growing stocks (Berkshire Hathaway and AAPL, for example) do NOT pay dividends.
But feel free to provide evidence to support the claim that a dividend generally increases share price.
Not quite true.
They pay taxes in local currency on money earned in other countries. If they repatriate the money, they pay taxes based on US tax rates - BUT they get to deduct the amount paid on foreign countries. So, in effect, if they want the money back in the U.S., the total tax rate they pay will be US tax rates, so there's no double taxation.
Actually, you have it backwards.
A split is shuffling deck chairs. It has absolutely no impact on the ratios or the split-adjusted share price. Evidence is pretty clear that while a split might have a very short term benefit, that goes away quickly.
OTOH, a buy-back has a very real effect. There are 930 M shares in circulation right now. The per-share earnings are $X divided by 930 M. If Apple buys back 30 M shares, then the per-share earnings are $X divided by only 900 M, so earnings per share are increased - permanently.
Whatever multiple the investor uses will be based on the new share price, so the price would increase proportionally. That is, if they buy back 5% of the shares, the share price will increase approximately 5%.
+1 on all points.
Except perhaps the last one: there is no way to predict whether the investor will use the same multiple after as (s)he did before. There are potentially all sorts of things that a buyback could signal that could make the multiple lower, stay the same, or even higher (e.g., signaling the fact that Apple's senior management is very bullish on its future cash flow prospects, and is credibly saying that AAPL is a 'buy' even at $585 and it's putting its money where its mouth is).
Extensive past empirical evidence suggests that, on average, a buyback has positive signaling effects.
My own preference would be: Ideally, a sizable (e.g., $25B) buyback, which would signal management confidence that the stock is headed much higher. If not, a one-time special dividend for the same amount, but shareholders will have to swallow personal taxes (as well as possible implied US taxes on any repatriated earnings). The other problem with the latter is, it's not clear what opportunities are currently available for the shareholders to invest the money elsewhere.
I hope to God they do not announce a 'regular' quarterly dividend. That would be insanity.
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?
Huh? Care to explain how that arbitrage strategy would work?
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.
How about Apple just outright buy AT&T, fire all current management and replace them with Apple appointees. Then maybe Apple's customers could have a decent wireless carrier for their Apple products, one that treats them with some respect. Thinking just a bit deeper on the subject - it's also the last piece to the iCloud puzzle.
It would be wise for them to buyback stock to maintain talents with stock certificates as incentives. A onetime dividend to shareholders could also be made opening the door for future onetime special dividends.
I would like to see Apple take more ownership in the supply chain by investing in companies that make their components further giving them the edge.
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
Are you suggesting that Apple give away an Apple TV set top box to every American household that wants one in order to gain a better foothold in the television market?
Although not really a bad idea at its core, don't you think the rest of the world would feel just a bit slighted if Apple were to do this only in the U.S.A.?
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.
That's a fun scenario to consider. LOL. Of course it would take them a couple of years to ramp up production to fill that order. The antitrust issues of wiping out their smaller competitors by giving away free products would be crazy.
Repatriate it and pay some taxes. They have been on a streak talking about job creation in the US. If they repatriated any substantial amount, they could brag about helping the gov't too.
Are you suggesting that Apple give away an Apple TV set top box to every American household that wants one in order to gain a better foothold in the television market?
Although not really a bad idea at its core, don't you think the rest of the world would feel just a bit slighted if Apple were to do this only in the U.S.A.?
Good Point.... since it's just crazy speculation... Free Apple TVs for the World
Seems majority believe in a dividend and or a split over a buy back.
I support that but...am in Hollywood...work in the entertainment industry and for my money two acquisitions (not that they'd announce it tomorrow) make a whole lotta sense to some of us here.
1) Netflix - Why? Content deals. Apple needs to secure it's position in this arena IF it's gonna go balls out in the TV Content world. Strange that suddenly you can now pay for your sub's in itunes. Just sayin.
2) Sprint - Why? Wireless is the future. Again if you were Apple and going full on into the TV arena and your not getting cooperation from content providers who (some) happen to also control the content pipes into our homes then you'd make a run for a pipe provider giving you access into homes wirelessly. As we heard, Apple is at first base and getting ready to roll out a major boost to WIFI delivery...The only way I see Apple gaining cooperation with content providers and developers like my employer is by having direct access. Thoughts?
It's Disney. Otherwise, why did Apple withdraw from competing with ESPN on the rights to European football (soccer)? It does not need to compete for content if it can just buy the content producer/holder (Disney). It's all about content.
I hope Apple decides to wait until the cash reserve grows to $150 billion and the share price reaches $700 before issuing a dividend and that's what the conference is all about.
By my calculation that should be in about a month and a half. And I'm not kidding.
Reminds me of the scene from Die Hard 2 where after stealing a bunch of gold, the leader declares, "Tomorrow, we decide which country we want to buy!"
But in all seriousness, It's clear that Apple intends to buy more than one country. I say start with the little ones, perhaps island nations, and grant senior Apple executives lifetime presidential status as non-cash compensation for their dedicated work.
I then suspect Apple will acquire some tactical nuclear weapons and aim them towards Mountain View, CA and Seattle, WA, just in case someone gets a few bright ideas.
The fun wouldn't stop there, as the company will undoubtedly unveil its biggest secret to date: Steve Jobs has secretly been living in stasis and all of their billions of dollars will now be devoted to medical research that will revive our fearless leader.
Okay... maybe I went a bit too far with that last one.
On a truly serious note, I don't see the reason why Apple would choose this moment to initiate a stock buy back, dividend, or stock split. There have been plenty of opportunities in the past, but I don't see what's changed now that would prompt any of these moves other than the size of the stock pile has grown. On the issue of stock buy backs, it's not as though Apple's share price is hurting and needs to be buoyed; the stock is on a tear. On the issue of a stock split, this also seems unnecessary since it has no impact on Apple's cash reserves. It's hardly necessary to hold a news conference just to announce a stock split. On the issue of a dividend, I guess there is the possibility that they will rush to pay one before the expiration of current reduced tax rates on dividends, but that hardly seems like a compelling reason to pay one. I would assume that Apple will continue doing well for some time to come and anything paid out on a special dividend will be earned back in the coming quarters and years, at which point, there is no guarantee that the tax treatment of dividends will be any more or less favorable. So aiming for a dividend purely on the basis of tax rates also seems unlikely. Beyond that, the stock doesn't really need any additional help anyway. Announcing a regular dividend might finally bring in large institutional investors that are seeking income on their holdings, but it doesn't seem like AAPL is in need of them either... These next 7 hours are going to be torture.
It must be a nice problem to have: We have too much money!
I am quite fascinated by the possibilities, though. From reading the thread, it sounds (to me -- and I have no idea what I'm talking about) that the special dividend might be likely.
It doesn't seem like there are any acquisitions that would have any true effect on the amount of cash they have on hand. A dividend doesn't *seem* to make sense, at least from what people here are saying.
The funny thing is, even if they pay out this special dividend, they are going to be in the same boat again, soon.
I think they're going to announce a the investment of their Main Campus on the company bottom line, a few more acquisitions and investment in advanced Materials Research Firms amongst other component manufacturing as a start.
Reminds me of the scene from Die Hard 2 where after stealing a bunch of gold, the leader declares, "Tomorrow, we decide which country we want to buy!"
But in all seriousness, It's clear that Apple intends to buy more than one country. I say start with the little ones, perhaps island nations, and grant senior Apple executives lifetime presidential status as non-cash compensation for their dedicated work.
I then suspect Apple will acquire some tactical nuclear weapons and aim them towards Mountain View, CA and Seattle, WA, just in case someone gets a few bright ideas.
The fun wouldn't stop there, as the company will undoubtedly unveil its biggest secret to date: Steve Jobs has secretly been living in stasis and all of their billions of dollars will now be devoted to medical research that will revive our fearless leader.
Okay... maybe I went a bit too far with that last one.
On a truly serious note, I don't see the reason why Apple would choose this moment to initiate a stock buy back, dividend, or stock split. There have been plenty of opportunities in the past, but I don't see what's changed now that would prompt any of these moves other than the size of the stock pile has grown. On the issue of stock buy backs, it's not as though Apple's share price is hurting and needs to be buoyed; the stock is on a tear. On the issue of a stock split, this also seems unnecessary since it has no impact on Apple's cash reserves. It's hardly necessary to hold a news conference just to announce a stock split. On the issue of a dividend, I guess there is the possibility that they will rush to pay one before the expiration of current reduced tax rates on dividends, but that hardly seems like a compelling reason to pay one. I would assume that Apple will continue doing well for some time to come and anything paid out on a special dividend will be earned back in the coming quarters and years, at which point, there is no guarantee that the tax treatment of dividends will be any more or less favorable. So aiming for a dividend purely on the basis of tax rates also seems unlikely. Beyond that, the stock doesn't really need any additional help anyway. Announcing a regular dividend might finally bring in large institutional investors that are seeking income on their holdings, but it doesn't seem like AAPL is in need of them either... These next 7 hours are going to be torture.
About AAPL stock price. The correction has been swift so far this year, but the stock is still extremely cheap and lagging behind company performance, and will be even more cheap once the upcoming quarters ring in. I'm not "predicting" a buy-back, but I think that people need to realize that especially with such a careful company like AAPL.... they won't just one day think "hey, the stock is down lately, we're gonna buy some". I think it's more likely a decision that they will take seriously, and have meetings, votes, sleep-on-its, etc. By the time they're ready to do it, the stock may have rushed up $200 while it's trying to catch up to a fairer P/E value.... however, I don't think that Apple is trying to wheel and deal their own stock here.... I'm sure that if they decide that they want to buy back, they will buy back, and the stock is still VERY cheap relative to the company performance (all that matters).
The next several hours will be torturous on AAPL investors indeed. I bet shorters are sh*tting bricks right now. The stock will probably be deep into the red or green tomorrow, with a small likelihood of whatever is announced being a smooth and moderate sail (though, it can happen), allowing the stock to fluctuate "normally".
Regardless of what happens, Longs are in the clear, just inevitable day to day movements, however, shorters can lose or win big on it. This is an interesting scenario for all, however, as I don't remember Apple ever doing something so Wall Street-centric.
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.
“Investors are coming to suspect that Sharp’s slump is more serious than thought,” said Makoto Kikuchi, chief executive officer at Myojo Asset Management Co. in Tokyo. “There is a concern over possible fundraising as losses are expected to continue next year.”
Sharp doesn’t have any promising business large enough to pull the company out of its slump
Comments
Not me. A dividend does not historically increase the share price of a growth stock. For example, look at the big Microsoft one-time dividend a year ago. The share price dropped by almost exactly the amount of the dividend.
And Microsoft's share price growth has been far lower than Apple's - and MS offers a dividend and Apple does not. There's no evidence that a dividend increases the share price of growth stocks - and people like Warren Buffet are staunchly opposed.
Both terrible examples. In both cases, Apple's success depends on having access to all content and carriers. Choosing only one puts them in competition with key partners.
That's not at all true. A large one-time dividend causes a drop in share price roughly equal to the value of the dividend. If it's an ongoing dividend, there's no evidence that dividends are correlated with share price. Some of the fastest growing stocks (Berkshire Hathaway and AAPL, for example) do NOT pay dividends.
But feel free to provide evidence to support the claim that a dividend generally increases share price.
Not quite true.
They pay taxes in local currency on money earned in other countries. If they repatriate the money, they pay taxes based on US tax rates - BUT they get to deduct the amount paid on foreign countries. So, in effect, if they want the money back in the U.S., the total tax rate they pay will be US tax rates, so there's no double taxation.
Actually, you have it backwards.
A split is shuffling deck chairs. It has absolutely no impact on the ratios or the split-adjusted share price. Evidence is pretty clear that while a split might have a very short term benefit, that goes away quickly.
OTOH, a buy-back has a very real effect. There are 930 M shares in circulation right now. The per-share earnings are $X divided by 930 M. If Apple buys back 30 M shares, then the per-share earnings are $X divided by only 900 M, so earnings per share are increased - permanently.
Whatever multiple the investor uses will be based on the new share price, so the price would increase proportionally. That is, if they buy back 5% of the shares, the share price will increase approximately 5%.
+1 on all points.
Except perhaps the last one: there is no way to predict whether the investor will use the same multiple after as (s)he did before. There are potentially all sorts of things that a buyback could signal that could make the multiple lower, stay the same, or even higher (e.g., signaling the fact that Apple's senior management is very bullish on its future cash flow prospects, and is credibly saying that AAPL is a 'buy' even at $585 and it's putting its money where its mouth is).
Extensive past empirical evidence suggests that, on average, a buyback has positive signaling effects.
My own preference would be: Ideally, a sizable (e.g., $25B) buyback, which would signal management confidence that the stock is headed much higher. If not, a one-time special dividend for the same amount, but shareholders will have to swallow personal taxes (as well as possible implied US taxes on any repatriated earnings). The other problem with the latter is, it's not clear what opportunities are currently available for the shareholders to invest the money elsewhere.
I hope to God they do not announce a 'regular' quarterly dividend. That would be insanity.
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?
Huh? Care to explain how that arbitrage strategy would work?
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.
I would like to see Apple take more ownership in the supply chain by investing in companies that make their components further giving them the edge.
We shall see tomorrow though.
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
Are you suggesting that Apple give away an Apple TV set top box to every American household that wants one in order to gain a better foothold in the television market?
Although not really a bad idea at its core, don't you think the rest of the world would feel just a bit slighted if Apple were to do this only in the U.S.A.?
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.
That's a fun scenario to consider. LOL. Of course it would take them a couple of years to ramp up production to fill that order. The antitrust issues of wiping out their smaller competitors by giving away free products would be crazy.
Repatriate it and pay some taxes. They have been on a streak talking about job creation in the US. If they repatriated any substantial amount, they could brag about helping the gov't too.
This.
Are you suggesting that Apple give away an Apple TV set top box to every American household that wants one in order to gain a better foothold in the television market?
Although not really a bad idea at its core, don't you think the rest of the world would feel just a bit slighted if Apple were to do this only in the U.S.A.?
Good Point.... since it's just crazy speculation... Free Apple TVs for the World
Lots of good discussion here...
I see establishment of a $15 billion Steve Jobs Apple Foundation...
Details at 6 AM PDT...
Wow
Read all the posts.
Seems majority believe in a dividend and or a split over a buy back.
I support that but...am in Hollywood...work in the entertainment industry and for my money two acquisitions (not that they'd announce it tomorrow) make a whole lotta sense to some of us here.
1) Netflix - Why? Content deals. Apple needs to secure it's position in this arena IF it's gonna go balls out in the TV Content world. Strange that suddenly you can now pay for your sub's in itunes. Just sayin.
2) Sprint - Why? Wireless is the future. Again if you were Apple and going full on into the TV arena and your not getting cooperation from content providers who (some) happen to also control the content pipes into our homes then you'd make a run for a pipe provider giving you access into homes wirelessly. As we heard, Apple is at first base and getting ready to roll out a major boost to WIFI delivery...The only way I see Apple gaining cooperation with content providers and developers like my employer is by having direct access. Thoughts?
this makes perfectly good sense.
APPLE buying SAMSUNG??? They should be so lucky
It's Disney. Otherwise, why did Apple withdraw from competing with ESPN on the rights to European football (soccer)? It does not need to compete for content if it can just buy the content producer/holder (Disney). It's all about content.
I hope Apple decides to wait until the cash reserve grows to $150 billion and the share price reaches $700 before issuing a dividend and that's what the conference is all about.
By my calculation that should be in about a month and a half. And I'm not kidding.
Reminds me of the scene from Die Hard 2 where after stealing a bunch of gold, the leader declares, "Tomorrow, we decide which country we want to buy!"
But in all seriousness, It's clear that Apple intends to buy more than one country. I say start with the little ones, perhaps island nations, and grant senior Apple executives lifetime presidential status as non-cash compensation for their dedicated work.
I then suspect Apple will acquire some tactical nuclear weapons and aim them towards Mountain View, CA and Seattle, WA, just in case someone gets a few bright ideas.
The fun wouldn't stop there, as the company will undoubtedly unveil its biggest secret to date: Steve Jobs has secretly been living in stasis and all of their billions of dollars will now be devoted to medical research that will revive our fearless leader.
Okay... maybe I went a bit too far with that last one.
On a truly serious note, I don't see the reason why Apple would choose this moment to initiate a stock buy back, dividend, or stock split. There have been plenty of opportunities in the past, but I don't see what's changed now that would prompt any of these moves other than the size of the stock pile has grown. On the issue of stock buy backs, it's not as though Apple's share price is hurting and needs to be buoyed; the stock is on a tear. On the issue of a stock split, this also seems unnecessary since it has no impact on Apple's cash reserves. It's hardly necessary to hold a news conference just to announce a stock split. On the issue of a dividend, I guess there is the possibility that they will rush to pay one before the expiration of current reduced tax rates on dividends, but that hardly seems like a compelling reason to pay one. I would assume that Apple will continue doing well for some time to come and anything paid out on a special dividend will be earned back in the coming quarters and years, at which point, there is no guarantee that the tax treatment of dividends will be any more or less favorable. So aiming for a dividend purely on the basis of tax rates also seems unlikely. Beyond that, the stock doesn't really need any additional help anyway. Announcing a regular dividend might finally bring in large institutional investors that are seeking income on their holdings, but it doesn't seem like AAPL is in need of them either... These next 7 hours are going to be torture.
I am quite fascinated by the possibilities, though. From reading the thread, it sounds (to me -- and I have no idea what I'm talking about) that the special dividend might be likely.
It doesn't seem like there are any acquisitions that would have any true effect on the amount of cash they have on hand. A dividend doesn't *seem* to make sense, at least from what people here are saying.
The funny thing is, even if they pay out this special dividend, they are going to be in the same boat again, soon.
Right?
They're gonna launch a satellite system. iOs devices will no longer be constrained to towers, local telecoms, borders, or even dry land.
Free worldwide communication, a whole new non-terrestrial internet, and the price of admission is the apple device you buy to use it.
I'm giddy with excitement!
Reminds me of the scene from Die Hard 2 where after stealing a bunch of gold, the leader declares, "Tomorrow, we decide which country we want to buy!"
But in all seriousness, It's clear that Apple intends to buy more than one country. I say start with the little ones, perhaps island nations, and grant senior Apple executives lifetime presidential status as non-cash compensation for their dedicated work.
I then suspect Apple will acquire some tactical nuclear weapons and aim them towards Mountain View, CA and Seattle, WA, just in case someone gets a few bright ideas.
The fun wouldn't stop there, as the company will undoubtedly unveil its biggest secret to date: Steve Jobs has secretly been living in stasis and all of their billions of dollars will now be devoted to medical research that will revive our fearless leader.
Okay... maybe I went a bit too far with that last one.
On a truly serious note, I don't see the reason why Apple would choose this moment to initiate a stock buy back, dividend, or stock split. There have been plenty of opportunities in the past, but I don't see what's changed now that would prompt any of these moves other than the size of the stock pile has grown. On the issue of stock buy backs, it's not as though Apple's share price is hurting and needs to be buoyed; the stock is on a tear. On the issue of a stock split, this also seems unnecessary since it has no impact on Apple's cash reserves. It's hardly necessary to hold a news conference just to announce a stock split. On the issue of a dividend, I guess there is the possibility that they will rush to pay one before the expiration of current reduced tax rates on dividends, but that hardly seems like a compelling reason to pay one. I would assume that Apple will continue doing well for some time to come and anything paid out on a special dividend will be earned back in the coming quarters and years, at which point, there is no guarantee that the tax treatment of dividends will be any more or less favorable. So aiming for a dividend purely on the basis of tax rates also seems unlikely. Beyond that, the stock doesn't really need any additional help anyway. Announcing a regular dividend might finally bring in large institutional investors that are seeking income on their holdings, but it doesn't seem like AAPL is in need of them either... These next 7 hours are going to be torture.
About AAPL stock price. The correction has been swift so far this year, but the stock is still extremely cheap and lagging behind company performance, and will be even more cheap once the upcoming quarters ring in. I'm not "predicting" a buy-back, but I think that people need to realize that especially with such a careful company like AAPL.... they won't just one day think "hey, the stock is down lately, we're gonna buy some". I think it's more likely a decision that they will take seriously, and have meetings, votes, sleep-on-its, etc. By the time they're ready to do it, the stock may have rushed up $200 while it's trying to catch up to a fairer P/E value.... however, I don't think that Apple is trying to wheel and deal their own stock here.... I'm sure that if they decide that they want to buy back, they will buy back, and the stock is still VERY cheap relative to the company performance (all that matters).
The next several hours will be torturous on AAPL investors indeed. I bet shorters are sh*tting bricks right now. The stock will probably be deep into the red or green tomorrow, with a small likelihood of whatever is announced being a smooth and moderate sail (though, it can happen), allowing the stock to fluctuate "normally".
Regardless of what happens, Longs are in the clear, just inevitable day to day movements, however, shorters can lose or win big on it. This is an interesting scenario for all, however, as I don't remember Apple ever doing something so Wall Street-centric.
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
“Investors are coming to suspect that Sharp’s slump is more serious than thought,” said Makoto Kikuchi, chief executive officer at Myojo Asset Management Co. in Tokyo. “There is a concern over possible fundraising as losses are expected to continue next year.”
Sharp doesn’t have any promising business large enough to pull the company out of its slump