What will Apple do with $28B?

  • Posted: 24 January 2009 01:35 AM #16

    Buffeted - 23 January 2009 04:26 PM

    Apple already indicated at earnings that the bulk
    of investments in Q02 will be in Apple stores.

    A buy back seems an obvious play considering current share price
    and the additional boost the signal of confidence would bring.

    Product research and development.

    Public Relations Strategy.

    an ipancreas.

    Buffeted, I discerned from the call Apple was slowing the pace of new store openings versus the pace of the first seven years since the first stores were opened (May 2001).

    R&D as a percentage of revenue will most likely remain in its current band of activity.

    The retail stores are the company’s best public relations strategy and outside of the long-term lease liabilities, the stores pretty much pay for themselves from retail margin on sales.

    I don’t see a buy back.

    There are reasons for now for keeping the cash and I hope to pleasantly startled by the creative investments management chooses to make in the company’s future.

         
  • Posted: 24 January 2009 08:21 AM #17

    Buybacks are for companies who think they are fixed players in a fixed market, who think other people can invest the money more profitably than they, and therefore gearing up is a good plan. (gearing up is what brought the current crisis isn’t it?)

    If you think Apple should buy back, you haven’t imagined what Apple can become; you’ve forgotten Apple’s declaration, when SJ returned, to change the world.

         
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    Posted: 24 January 2009 08:49 AM #18

    Note that there has been a decline in shares outstanding, so mini buyback might be in the works. What else might cause a decline in shares?

    2008q1: 900
    2008q2: 899
    2008q3: 903
    2008q4: 905
    2009q1: 901

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    Posted: 24 January 2009 09:55 AM #19

    awcabot - 24 January 2009 12:49 PM

    Note that there has been a decline in shares outstanding, so mini buyback might be in the works. What else might cause a decline in shares?

    2008q1: 900
    2008q2: 899
    2008q3: 903
    2008q4: 905
    2009q1: 901

    The variation in diluted shares is related to how employee stock options are valued.  If an option is underwater due to a low current stock price then the option has no value as far as FASB.  Only in the money options count so the number is down probably due Apple’s low share price compared to the option strike price

         
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    Posted: 24 January 2009 06:21 PM #20

    $28 billion earning just under 2% is an extra half billion in “income”.  Not bad.  I still think a one time dividend makes some sense.  Reward the patient, longer term investors with a little coin.  Apple just doesn’t need that much cash sitting around.

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  • Posted: 24 January 2009 06:32 PM #21

    incorrigible - 24 January 2009 10:21 PM

    $28 billion earning just under 2% is an extra half billion in “income”.  Not bad.  I still think a one time dividend makes some sense.  Reward the patient, longer term investors with a little coin.  Apple just doesn’t need that much cash sitting around.

    As a long-term investor I don’t need a taxable reward in the form of a one-time dividend at a time not of my choosing. I’d prefer to see my investment build in a tax-deferred way through share price appreciation (created in part by the cash underpinning the share price) than a cash dividend that cannibalizes the balance sheet and is double-taxed (when earned by Apple and when realized as dividend income by shareholders). I’d much rather see the share value build and the cash pile grow until such time as management uses the cash in strategic ways to further the company’s long-term enterprise and product plans.

         
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    Posted: 24 January 2009 10:12 PM #22

    We may see a market of “Last man standing”. Where the strongest survive. This would be the company with the best product, best marketing and the most reserves to weather the economic storms. That would be Apple. I have no complaints with how the business is being run.


    :apple:

         
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    Posted: 26 January 2009 11:40 PM #23

    Maybe Apple should buy Skype:

    Skype May Be For Sale

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  • Posted: 27 January 2009 05:23 AM #24

    cramar - 27 January 2009 03:40 AM

    Maybe Apple should buy Skype:

    Skype May Be For Sale


    Why?

    Skype is old technology. I want Apple to be the vanguard of technology innovators, not a collector of old, stale and worn-out technologies that much more fits in with Microsoft’s image.

    What I expect from Apple is the unexpected.

         
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    Posted: 27 January 2009 02:38 PM #25

    I go with the acquisition and general purpose scenario.  There are technologies out there that Apple wants.  There is land that needs buying for Apple Stores.  There are employees that need training.

         
  • Posted: 27 January 2009 08:14 PM #26

    Dont forget that a good chunk of this cash is overseas and would have to take a 30% haircut to Uncle Sam if Apple wanted to bring it back over to distribute to shareholders.

         
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    Posted: 27 January 2009 09:51 PM #27

    WillyPitt - 28 January 2009 12:14 AM

    Dont forget that a good chunk of this cash is overseas and would have to take a 30% haircut to Uncle Sam if Apple wanted to bring it back over to distribute to shareholders.

    This is an important point.  In addition, leaving cash overseas facilitate payment to suppliers, stores expansion and currency hedging.

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    Posted: 28 January 2009 11:59 AM #28

    Spending the week in Las Vegas. I’m reminded every time I pull out my wallet just how inefficient trying to purchase something can be. Though it’ll never happen, imagine if Apple “reinvented transactions”? We’ve talked about this before on this board, maybe a couple years ago. With $28b behind the idea, Apple might be able to make it work. They invent a really *simple* Point-of-Sale technology, then roll it out aggressively. Spread the Apple ecosystem to every convenience store, fueling station, restaurant, and market, backed by plenty of cash.

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    Posted: 28 January 2009 12:06 PM #29

    posted in wrong thread.

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    -John Maynard Keynes

         
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    Posted: 28 January 2009 12:41 PM #30

    rezonate - 28 January 2009 03:59 PM

    Spending the week in Las Vegas. I’m reminded every time I pull out my wallet just how inefficient trying to purchase something can be. Though it’ll never happen, imagine if Apple “reinvented transactions”? We’ve talked about this before on this board, maybe a couple years ago. With $28b behind the idea, Apple might be able to make it work. They invent a really *simple* Point-of-Sale technology, then roll it out aggressively. Spread the Apple ecosystem to every convenience store, fueling station, restaurant, and market, backed by plenty of cash.

    Thank you for reminding us of this point.  Why need to be backed by plenty of cash?

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