“Apple shares edged higher Monday as speculation grew that the company would once again return some of its multibillion-dollar war chest to investors in the form of dividends and share buybacks, just as it had done one year earlier,” Patrick May writes for SiliconBeat. “At that time, Apple announced it would bump up its cash-out to $100 billion by the end of 2015, and it had accomplished more than half of that goal by February.”
“Here’s the thinking: As Cook successfully fended off [Carl] Icahn’s demands [for increased AAPL buybacks], he also suggested to investors that Apple would unveil new products this year after a long drought in that department,” May writes. “Yet with few observers actually expecting Apple to come up with a new TV or wearable ‘iWatch’ before June’s annual worldwide developer conference, it would make sense for Apple to dip into its cash hoard once again, just to keep everybody happy until a new killer product does come out.”
Read more in the full article here.
Greedy bastards.
Why does anyone think Apple has to placate investors? This is one of many reasons why this whole system is screwed up!
Yes, I own Apple stock. Yes, I’ve owned it since the Dark Days. But I don’t expect Apple to do things that are not the best thing for Apple The Company just to make me richer.
The board and officers of Apple’s first and foremost fiduciary responsibility is to do what is financially the best for Apple The Company. Their secondary responsibility is to do what is best for the investors. Unfortunately *way* too many investors think it is the other way around. This leads to the company doing stupid things just to make sure that Wall Street is not mad at them.
Apple needs to again take the Apple attitude of the late 1990s and do what is best for Apple The Company! To hell with with doing things just to placate investors.
And how does parting with some of the $160 bil to buy and own their own stock not help Apple? It is not like the buyback money is just pissed away, they are buying AAPL at a very low price. Looks like a win win from my point of view. And I am long AAPL and have been since 2002.
Define what you mean by “Apple The Company” and what Apple could do with that $160 Billion (and growing rapidly) to improve it?
BTW: Every share of stock that you own in Apple is 2/3 invested in Apple’s business that’s growing tremendously well, while 1/3 is invested in cash that’s sitting there getting a very crappy return. Why wouldn’t you want more of your investment be in Apple’s business?
Is that you Timber?
You are close in your assessment, but I would state it a bit differently, Shadowself. Apple has a fiduciary responsibility to its owners (investors), NOT the corporation. However, it essentially amounts to the same thing, in my opinion, because a healthy corporation generally rewards its owners quite well. Apple has a long term plan and vision and does not play games to temporarily enhance its stock price. That displeases some investors who are looking for a quick profit, but I believe that Apple’s strategy is better for the company and its long term investors. Investors who disagree are free to sell AAPL and move on.
People tend to ignore the fact that ownership in a publicly traded company changes from day-to-day and moment-to-moment as investors buy and sell shares. A corporation is not required to address the desires of each and every investor at any given moment in time, even investors that acquire a substantial minority ownership of the corporation (that includes you, Icahn). Basically, if you don’t like how a company is run, then you can either work to change corporate policies by selecting different people for the Board of Directors and by developing and voting on shareholder initiatives, or you can sell your stock in that corporation and invest elsewhere.
If you are fortunate enough to own a majority share of a corporation, or can organize a group of investors who collectively own a majority share, then you can assert substantial influence on corporate decisions and policies. As it currently stands, it would require a collective ownership of roughly $250B in stock to wield a majority stake in Apple.
Some corporations issue classes of common stock to skew this math. For instance, Class A shares might have 10 votes, Class B shares the standard 1 vote, and Class C shares no voting rights at all. That approach might enable a minority owner (in terms of dollar value) to exercise majority power in a corporation. In the stock market, not all shares are created equal.
If you are interested in investing beyond the basic level, then you might also be interested in preferred stock, which also comes in different flavors. Preferred stock tends to emphasize dividend income at the expense of the ownership/voting rights and unlimited share value appreciation of common stock.
Investing can be both fun and rewarding. My general opinion is that free investment advice is worth what you paid and that the vast majority of people peddling investment advice to the public are simply looking to get richer by taking your money. If their investment advice was truly great, then they would be independently wealthy without the need to pimp themselves out in a magazine, newspaper, or blog.
Why bother? They should let he stock keep falling and do massive buy backs until they can go private then make those sorry people pay when they come our with new innovative things.
I’m not selling my equity in AAPL so I’ll end up owning the whole shebang.
It does *not* work that way!!! A corporation cannot “go private” by using company assets to buy back stock!
Stock buy backs simply reduce the quantity of stock outstanding, thus tending to concentrate ownership in a smaller group of people. Theoretically, the overall value of the company is unchanged by this action – but that value is distributed across a smaller number of shares, thus increasing the share price.
All things being equal, a person (or investment group) would have to acquire the same value of shares (say, $250B) to exercise majority control over Apple regardless of the number of shares outstanding. To truly take Apple private would take more than double that amount, because you would have to pay a premium (possibly 15% to 30% or more) to acquire all of the shares (supply/demand). Please keep in mind that the corporate assets under the control of Apple are *owner* assets. As a result, every shareholder in Apple participates in the stock buy backs, even if just in a very, very tiny way.
Please, please stop talking about Apple “going private.” It is highly unlikely to happen, in general, and it is *impossible* for it to happen using Apple corporate assets.
The best way to placate an analyst is with a tranquilliser dart shot from an elephant rifle.