BW: Apple Should Buy Back Some Stock
BW: Apple Should Buy Back Some Stock
by , 1:20 PM EST, February 28th, 2008
Noting Apple's $18 billion in cash, Business Week's Arik Hesseldahl believes that it's time for Apple to buy back some of its 879 million shares.
"Eighteen-and-a-half billion dollars is a lot of money," Mr. Hesseldahl opened. "It's more than the estimated 2007 gross domestic product of Nicaragua. It's bigger than the estimated 2005 expenditures of no fewer than 20 U.S. states. It's enough to give $60.78 to every person in the United States..."
What's more, that cash accounts for US$21 of every share of Apple stock. Mr. Hesseldahl argued that it's high time Apple seriously considers returning some of that cash to its stockholders in the form of a buyback. An aggressive stock repurchase program would achieve three things for Apple.
First it would send a signal that Apple believes its best days are ahead of it. Second, it would give the stock price a lift. Finally, with fewer shares outstanding, it would increase earnings per share.
Considering the argument that Apple has used that all that cash is being held in strategic reserve for a considered acquisition, Mr. Hesseldahl didn't really see any candidate companies that would be wise for Apple to buy. Not even Adobe. TiVo might, "but why bother? Adding TV recording capabilities shouldn't be all that hard for Apple, and why would it want to support Tivo's existing subscription and set-top business, especially when it's losing money?" Mr. Hesseldahl observed.
"While I'm the first to praise Apple management for the smart way it has run the business over the last several years, its lack of plans for its cash is starting to ring hollow....," Mr. Hesseldahl concluded. "How much more flexibility does Apple need? And how much bigger does that pile of cash need to be before it's enough?"
Observer Comments
Comments are currently closed. Please email the author instead.
Recent Headlines - Updated July 6th
- Mon, 11:17 AM
- Ted Landau's User Friendly View - Apple’s LED Cinema Display: A Too Short Story
- 11:11 AM
- Product News - Photo Recovery for Mac Adds Photoshop Support
- 10:39 AM
- Hot Forum Topic - iPhones in Education
- 8:47 AM
- News - Apple Employee Injured in Store Shooting
- Fri, 10:29 AM
- News - Apple Warns of Learning Interchange Security Breach
- 7:30 AM
- News - Happy Fourth of July!
- Thu, 6:07 PM
- TMO Scoop - Psystar Moves to Drop Bankruptcy Ahead of Apple Legal Battle
- 5:37 PM
- News - Uncomfirmed Reports Say Apple & Nvidia On The Outs
- 4:57 PM
- News - Microsoft Sick Over Barf Ad
- 4:09 PM
- Product News - KRK Ships R6 Passive Studio Monitor for Recording
- 3:45 PM
- John Martellaro's Blog - Particle Debris (week ending 7/2) Juiced, Joost and Goosed
- 3:12 PM
- Product News - ExactScan 2 Pro Released
The Mac Observer Reader Specials
- Download Typestyler, still the Ultimate Styling Tool for Internet, Print and Video Graphics. Works great in Classic with a Native OS X Version on the way. Free Tryout: www.typestyler.com
OWC: Big Drives, High Performance - Not High Prices! SATA 3.5" up to 1.5TB. Notebook up to 500GB. FW up to 6.0TB. 1.0TB Drive Models from as low as $97.99 www.MacSales.com
If you're using a Mac, then you've gotta check out Full Tilt Poker for Mac. This Full Tilt Poker bonus code does the unthinkable, it actually rewards!
RamJet Memory: MacBook and MacBook Pro 4GB kits for $57.99! Mac Pro 4GB Kits $99.99! iMac and Mac mini 4GB Kits for $57.99! 1TB SATA Hard Drives for $109.99! Click hereFor the latest Apple products use Ciao, a price comparison website, to find laptops like MacBook Air. Then find the best prices on MP3 players and use our comparison tool to evaluate mobile phones like the Apple iPhone.
Laptop Hardware Provided by TechRestore - Overnight Mac & iPod Repairs.

