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Apple to reveal decision on use of cash hoard on Monday morning

Sunday, March 18, 2012 · 9:21 pm · 65 Comments

Tim Cook, Apple’s CEO, and Peter Oppenheimer, Apple’s CFO, will host a conference call to announce the outcome of the Company’s discussions concerning its cash balance.

Apple will not be providing an update on the current quarter nor will any topics be discussed other than cash.

Analysts expect Apple to institute a dividend. It can easily afford one, since it had $97.6 billion in cash and securities at the end of last year,” Peter Svensson reports for The Associated Press. “That would be enough for a $100 one-time dividend for every shareholder, but analysts expect the company to institute a modest recurring dividend.”

Svensson reports, “Apple CEO Tim Cook and Chief Financial Officer Peter Oppenheimer will discuss the decision on a conference call at 9 a.m. Eastern time Monday morning, the company said late Sunday.”

Read more in the full article here.

MacDailyNews Note: Apple will provide live audio streaming of its conference call using Apple’s industry-leading QuickTime multimedia software. The live webcast will begin at 6:00 a.m. PDT on March 19, 2012 at www.apple.com/quicktime/qtv/call31912 and will also be available for replay for approximately two weeks thereafter. The webcast is available on any iPhone, iPad, iPod touch or any Mac or PC running QuickTime 6 or later.

MacDailyNews will provide live notes from the conference call beginning at 6am PDT / 9am EDT on Mondya, March 19th.

Categories: News

Tags: aapl, Apple Inc., buyback, cash hoard, cash-on-hand, dividend, finance, Tim Cook

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Comment Feed

65 Comments

1 2 Next »

mredofcourse

Sunday, March 18, 2012 - 9:33 pm · Reply

I think the short version of the call will be:
They’ve passed the 100 Billion mark, and they’re going to start issuing dividends.

Stock buy back doesn’t make sense with the stock so high.

A stock split may happen, but doesn’t affect what Apple does with the cash.

A major acquisition wouldn’t be announced like this, and I don’t think the executive team at Apple is in anyway interested in taking on a major acquisition.

Really, the only thing that I think could be a surprise here is whether or not Apple will take on some debt to finance dividends while leaving foreign money abroad until more favorable tax conditions occur.

Additionally, I could see Apple bringing in some people and forming a VC fund, but I think this would be a minor amount of their money.
brandon

Sunday, March 18, 2012 - 9:36 pm · Reply

I have a feeling Apple will also mention how many iPads were sold since the launch.
- Tflint
  
  Sunday, March 18, 2012 - 10:20 pm · Reply
  
  The story says that “will not be discussed.”
- GM
  
  Monday, March 19, 2012 - 2:49 am · Reply
  
  Read the article above. Second paragraph.
- GM
  
  Monday, March 19, 2012 - 2:51 am · Reply
  
  Geez!
Tobias Tate

Sunday, March 18, 2012 - 9:37 pm · Reply

ummmm… don’t they mean $100 for every SHARE (not shareholder)? Big difference there!
Sly

Sunday, March 18, 2012 - 9:39 pm · Reply

Buy Microsoft.
Sly

Sunday, March 18, 2012 - 9:39 pm · Reply

Or Adobe.
- Laughing_Boy48
  
  Monday, March 19, 2012 - 12:16 am · Reply
  
  Or Google and discontinue development of Android OS.
the joker

Sunday, March 18, 2012 - 9:40 pm · Reply

Return the cash to the shareholders. You know, the people who OWN this cash. Apple does not, in ANY WAY own this cash. The shareholder’s do.
- Rorschach
  
  Sunday, March 18, 2012 - 10:20 pm · Reply
  
  your username says it all, really.
  - GM
    
    Monday, March 19, 2012 - 3:02 am · Reply
    
    Ouch!
- Tflint
  
  Sunday, March 18, 2012 - 10:22 pm · Reply
  
  Your idea of economics is off base!
- disposableidentity
  
  Sunday, March 18, 2012 - 11:16 pm · Reply
  
  Apple owns the cash.
  You may own (some of) Apple, but Apple owns the cash.
  - 3l3c7ro
    
    Monday, March 19, 2012 - 3:13 am · Reply
    
    Gee, and I thought that I owned my house and not the bank. How does that work again?
    
    Does anybody think that when they get a mortgage that they don’t also have a stake in their house? I can see why ‘the joker’ is having trouble with the concepts.
    - disposableidentity
      
      Monday, March 19, 2012 - 9:38 am · Reply
      
      That’s a really bad analogy.
      
      Your shares make you a part owner of a corporation. But you have very little control over the operation of the business because… you own very little of the corporation. There are specific mechanisms you have access to.
      
      A better analogy would be direct democracy vs. representative democracy. If you don’t like how things are run you get to throw them out — you don’t get to vote on every issue.
      
      (Besides, in most cases your bank technically owns your house.)
      - 3l3c7ro
        
        Monday, March 19, 2012 - 10:17 am · Reply
        
        Thanks. I think you may be the only one here who gets my point. Many are confused by their view of money lent to a corporation in the way of shares in the company. The company still owns the right to manage but are moderated by a board of directors who can represent the shareholders as well as the interests of the company.
    - disposableidentity
      
      Monday, March 19, 2012 - 9:40 am · Reply
      
      Actually your bank analogy is perfect — at illustrating MY point.
      
      With a mortgage your bank essentially owns your home. However they don’t get any input into how you manage your home day-to-day.
      - 3l3c7ro
        
        Monday, March 19, 2012 - 10:19 am · Reply
        
        Yes, you got it. Thanks for making it clearer. The shareholders do sort of own the company but they don’t have the right to tell the company how to run itself.
  - the joker
    
    Monday, March 19, 2012 - 4:17 am · Reply
    
    I see the idiots are on parade here. If the share holders decide they want every last cent of Apple’s cash holdings, are you brain dead morons suggesting that Apple can overrule the shareholders and deny them this cash? Are you idiots that stupid?
    - disposableidentity
      
      Monday, March 19, 2012 - 9:30 am · Reply
      
      If that’s what the shareholders want, then they (we) have mechanisms to ask for it — including throwing out the management. But we pay these guys to run the show. The shareholders obviously trust their judgement. That’s why they’re there, to run the show for us.
      
      If you have a hundred million people grabbing for the steering wheel, we’ll end up in the ditch.
- Government tyranny
  
  Monday, March 19, 2012 - 2:47 am · Reply
  
  The shareholders own the cash? That is the same brain-damaged thinking that sold us the “too big to fail” B.S. Yes, I do understand that anology will go over the heads of those I mock, which is why “Stupid People” (SP) should abstain from voting. (You probably also think that “legal resident” equates to “Natural Born Citizen”. [hint: the birth certificate was a distraction.])
Tessellator

Sunday, March 18, 2012 - 9:43 pm · Reply

The “journalist/analyst” is being kind of disenjenious even a complete idiot journalist or analyst would know that only a third of that cash could actually be used because (at least) 2/3 was earned offshore and so remains offshore
To try to pay dividends from the remaining 2/3 they would have to give up a third to the federal government. (not a clever plan, Could even be viewed as a breach of fiduciary responsibility. )
- botvinnik
  
  Monday, March 19, 2012 - 12:46 am · Reply
  
  disingenuous is a bad word to misspell, especially when calling someone an idiot.
  - Tessellator
    
    Monday, March 19, 2012 - 9:08 pm · Reply
    
    Sorry I was posting from the phone, but never fear there are more than enough enough spelling Nazis to set things right again.
    And… your comprehension is lacking. Re-read the comment I wasn’t calling him an idiot, I was inferring that he knows better and was intentionally being incendiary.
    - botvinnik
      
      Tuesday, March 20, 2012 - 8:45 am · Reply
      
      “..even a complete idiot journalist or analyst would know that only ..” vis a vis “And… your comprehension is lacking. Re-read the comment I wasn’t calling him an idiot…”
      
      uh, that’s what you typed. My comprehension is astute.
      - Tessellator
        
        Tuesday, March 20, 2012 - 8:52 am · Reply
        
        As through a glass, darkly
        
        botvinnik
        
        Tuesday, March 20, 2012 - 9:19 am · Reply
        
        bah…spare me the pseudo-literary allusions to gloss-over your fuck-up.
        
        Tessellator
        
        Tuesday, March 20, 2012 - 5:00 pm · Reply
        
        I don’t think you lack of comprehension, or you lack of literacy are my “fuck-up”
        
        And somehow I don’t put Mark Twain in the “hi brow” Literary category, but perhaps it is where you went to school.
        
        botvinnik
        
        Thursday, March 22, 2012 - 11:43 am · Reply
        
        “as through a glass, darkly” is a biblical quote attributed to Saul Of Tarsus (aka St. Paul) not Mark Twain, you illiterate jackass.
peruphotography2011

Sunday, March 18, 2012 - 9:50 pm · Reply

I believe that the true and significant use of this large amount of cash will be announce:

1. Repatriating the amount of money held over seas, and enabling it to be taxed at current US tax rates.

2. Building of American manufacturing facilities for Apple products in the US,

These two announcement will ignite the country, and foster a spirit of hope and optimism for the future in the US.

American workers and Government must repond positively to this risk taking on the part of Apple.

This will be faith in our future, and the future of the world.
- jackman
  
  Sunday, March 18, 2012 - 10:59 pm · Reply
  
  your comment is the dumbest thing I’ve ever read on this site. Unless you’re were being sarcastic, in which case, very funny.
  - Laughing_Boy48
    
    Monday, March 19, 2012 - 12:18 am · Reply
    
    He was being extremely sarcastic and it was very funny.
- Ben Dover
  
  Monday, March 19, 2012 - 2:54 am · Reply
  
  “Hope and optimism”? I smell Obama’s new campaign slogan.
  
  - Ben Dover
- Almux
  
  Monday, March 19, 2012 - 4:01 am · Reply
  
  Oh gee! And you think the american workingpoors will be glad to work more hours for even less per month, for the others to be able to still buy things at the actual cheap prizes?
  Be realistic: the so called “amrerican way of life” has turned out to be a total waste of resources and a ethic disaster, period.
  Think different: find another way… and find it quickly! Or, follow the republican brain washing machine. Don’t even try to have any critical sense and go on believing that you can go on doing any jul…t with some kind of a god on your side making all well behind your mess.
  - Harry Tuttle
    
    Monday, March 19, 2012 - 7:57 am · Reply
    
    Speaking like a true materialistic secularist…
Bongo

Sunday, March 18, 2012 - 9:52 pm · Reply

For all the people telling everyone who wants a dividend to either shut up or sell their shares, I hope you do the same after tomorrow.
SP

Sunday, March 18, 2012 - 9:56 pm · Reply

Thank you, “the joker,” for making complete sense.

For those of you who are about to complain about what AAPL will do (and hopefully that means giving the cash back to its shareholders), Apple’s current valuation is based on its current future earnings * a growth projection. Effectively, Apple is sitting on a huge growth machine that’s throwing off cash — and then it’s hoarding that cash and generating almost no return on it (since it’s clearly generating excess cash by adding to cash reserves quarter after quarter). The cash Apple deems “excess” (what it does not need to fund its future investments) can and SHOULD be returned to shareholders so that shareholders can invest it however they would like to (instead of keeping it as cash, which generates next to nothing as returns).

BTW, nothing’s stopping you from taking your Apple dividend and buying Apple shares — or buying anything else that, for that matter. And for those that are getting antsy that this will depress Apple’s stock price — the stock price is driven far more by Apple’s earnings and growth, which won’t change by its financial actions.

Also, if Apple (in some fantasy world) bought some company and shut them down, instead of giving that money to the shareholders, that would be a colossal waste of capital — and downright criminal mismanagement of money that belongs to someone else. Namely, the shareholders.
- disposableidentity
  
  Sunday, March 18, 2012 - 11:27 pm · Reply
  
  No problem with what you’re saying, but I want to make sure Apple keeps every penny (and then a little more) that if feels it could use. There are a lot of smart people there with great ideas. They have a huge portfilio of products woven into a massive seamless ecosystem. I can think of another dozen mini “industries” that Apple could create that add to and enhance what they already have. I just don’t ever want to hear that lack of cash prevents them from doing that.
  
  I just think Apple can do better with that money than I can. But if Tim Cook says tomorrow that he can’t think of a smart thing to do with that $100+ billion, sure, give it to the shareholders.
Grouch4460

Sunday, March 18, 2012 - 9:59 pm · Reply

I’d like to see them start their own bank. They could then provide the financing for purchase of Apple products. Additionally, they could issue their own credit card like Mastercard/Visa. This could tie in very well with the introduction of NFC and the electronic wallet with the next iPhone. A bank could be another income stream just like a new product.
- Uetzi
  
  Sunday, March 18, 2012 - 10:23 pm · Reply
  
  Great idea Grouch. Finance is one digital realm where Apple hasn’t (yet) placed a stake in the ground. I see Apple going after a part of the entire payment system through the iPhone making another thing that is too complicated right now Apple easy.
- Laughing_Boy48
  
  Monday, March 19, 2012 - 12:21 am · Reply
  
  Some commenter on another site said the same thing. That really would be an excellent idea the way you set it out. I don’t think there would be a better idea for Apple to do with at least half of its cash.
- aToMac
  
  Monday, March 19, 2012 - 1:54 am · Reply
  
  It didn’t work for Government Motors. It’s better to invest in China where the wealth is transferring to, then to stimulate even more debt financed consumption in the US. US government has a deficit that will burn all of Apple cash within a month.
  - David
    
    Monday, March 19, 2012 - 7:26 am · Reply
    
    But GM finance got involved with mortgages here in the UK nothing to do with financing vehicles.
citizen

Sunday, March 18, 2012 - 10:16 pm · Reply

trolls and naifs are out in force tonight.
silverhawk1

Sunday, March 18, 2012 - 10:20 pm · Reply

A dividend might just ignite a buying frenzy and the stock could close over $600.
- Johnny Appleseed
  
  Sunday, March 18, 2012 - 10:39 pm · Reply
  
  It’ll probably give it a bump, but I wonder how much the expectation of a dividend is already built in to the price, given the issue has been discussed for the past several weeks.
  - silverhawk1
    
    Monday, March 19, 2012 - 8:50 am · Reply
    
    • AAPL Pre-Market: Up $14.28, or 2.44% to $599.85 @ 8:17am EDT
ken1w

Sunday, March 18, 2012 - 11:23 pm · Reply

I think the people who want a dividend have no imagination, courage, or true belief in Apple.

With access to that level of funding, without the risk of accumulating debt, imagination is the only limit to what Apple can do… In the past, Apple had to “bet the farm” to create the original Mac, and again to save the company with iMac and Mac OS X when Steve Jobs returned. Now, Apple can take similar and even much greater risks with relatively little actual risk. iPad was a big risk. The rumored “iTV” is a big risk. That “cash hoard” allows Apple to be bold. In the future…

Apple could launch a network of hundreds of low-earth-orbit satellites, and make earth-based wireless carriers obsolete, or buy Iridium and enhance its existing “constellation” as a proving ground before expanding its capacity a thousandfold. Wireless access everywhere (even at the North Pole). Imagine what infusion of Apple funding would do for the U.S. space industry.

Apple could buy Tesla Motors, and start making Apple “pod cars.” 100% electric vehicles that are more convenient, efficient, and user-friendly than gas-powered cars, including hybrids. Siri’s great great “grand child” will provide the AI. Tesla happens to own and use a part of the defunct “NUMMI” car factory in Fremont, CA (very close to Cupertino). Apple could buy the whole plant.

A more obvious future extension of Apple is into “personal robotics.” Apple can do better than the Japanese companies that currently have leadership in this area, but they need to start now (and maybe they have already). Again, whatever Siri becomes will play a large role.

And that’s just me making stuff up. Imagine what the collective genius (the “crazy ones”) at Apple can imagine (and actually DO).

My guess is that Apple will announce a small recurring dividend, as “appeasement” for those lacking vision. Apple will keep their “crazy” plans secret. The dividend will provide a distraction, while not significantly affecting the “cash hoard.” When it’s too late for the competition to take action, Apple will announce its new initiative (and true purpose for the money).
- disposableidentity
  
  Sunday, March 18, 2012 - 11:36 pm · Reply
  
  “My guess is that Apple will announce a small recurring dividend, as “appeasement” for those lacking vision. Apple will keep their “crazy” plans secret. The dividend will provide a distraction, while not significantly affecting the “cash hoard.”
  
  I’m hoping for this. A small, sustainable dividend that shuts everyone up and lets them start treating Apple like a blue chip. All while Apple keeps planning huge, industry-disrupting change.
- disposableidentity
  
  Monday, March 19, 2012 - 9:45 am · Reply
  
  And after the conference call it looks like that’s the case.
  
  Returning a bunch of cash to shareholders through a modest dividend.
  
  Buying back some shares when it makes sense to off-set dilution.
  
  Keeping a giant (and growing) war chest for the “think different” opportunities.
breeze

Sunday, March 18, 2012 - 11:25 pm · Reply

THINK DIFFERENT.
spendingmachine

Sunday, March 18, 2012 - 11:48 pm · Reply

if they don’t know what to do with the cash..

GIVE it to ME…

I have NO PROBLEMS figuring out what to to do with it…
- botvinnik
  
  Monday, March 19, 2012 - 12:49 am · Reply
  
  oh, you’d just spend it all on  stuff.
Brau

Monday, March 19, 2012 - 1:25 am · Reply

Sad news.
This clearly indicates Apple has never had a secret world domination plot, set to unleash with the purchase of some Utopian Technical Inc, bringing righteousness and fulfillment to all the faithful.

Gosh, what to do now?
althegeo

Monday, March 19, 2012 - 2:01 am · Reply

A $15 a year dividend per share. 2.5% return per year on your investment.

Might as well have Tim buy out some of the competition or buy something else that’s useful.
- Apple Wannabe's
  
  Monday, March 19, 2012 - 3:08 am · Reply
  
  I’m sorry, did the word “competition” escape your lips?
  
  …”I do not think it means what you think it means.”
  
  I would love it if there were some. But, no.
Raymond

Monday, March 19, 2012 - 2:05 am · Reply

I want Apple to boost to $660 tonight !!!!!
Bongo

Monday, March 19, 2012 - 2:22 am · Reply

A dividend is really the only way to make money on your investment without having to give up ownership of your stake in the company. I don’t understand why people are so vehemently against this. A company does not have to stop growing or stop dominating in order to issue a dividend – they are not related.

I have owned Apple shares for a while. I have a huge unrealized gain but it’s really not my money until I cash out. A dividend is a perfect reward for my investment in Apple.

Not all companies should pay dividends, but ones that can afford to without compromising their ambitions and operations definitely should. Apple clearly falls into this camp.

Look at the oldest, most successful stocks on the market. Do you see a trend? At some point cash needs to be returned to the investors. Any rational investor looks to get returns on his investment without having to sell, because those returns should recur year upon year, and giving up ownership makes no sense.
- Go APPL!
  
  Monday, March 19, 2012 - 3:15 am · Reply
  
  A stock that pays dividends is really the safest investment. Stock prices fluctuate, but once a dividend is collected, you can never lose that money. You can waste it, but it is yours to do with what you wish. And if Apple does pay a dividend, today’s best bet is to use it to buy more Apple stock!
- Trrosen
  
  Monday, March 19, 2012 - 5:37 am · Reply
  
  Dumb idea any money paid out in dividends reduces the value of the company and therefore your stocks the same amount. You really gain nothing but you will lose a percentage of the dividend to taxes. Without dividends you control when you pay taxes on the gains. Paying a dividend forces you to pay now.