“In its quarterly results on Tuesday, Apple Inc. likely will report that its cash hoard has topped a quarter of a trillion dollars, an unrivaled milestone for a private corporation that raises a question: Why would any company want to hold that much money?” Tripp Mickle reports for The Wall Street Journal. “Apple has added to its pile at a blistering pace, doubling it in just over four-and-a-half years. In the last three months of 2016 it wracked up new cash at a rate of about $3.6 million an hour. Its current total, not accounting for debt, exceeds the market values of Wal-Mart Stores Inc. and that of Procter & Gamble Co. , and outstrips the foreign-currency reserves of the U.K. and Canada combined.”
“The stash has drawn fresh attention recently as President Donald Trump tries to revamp the U.S. tax regime,” Mickle reports. “Apple, like many big companies, keeps most of its cash offshore—some 93% of its $246.09 billion total cash, cash equivalents, and securities as of December—to avoid U.S. corporate taxes that executives consider too high.”
“The Trump administration this week proposed a one-time tax holiday to encourage companies to bring that cash home, and said it wants to slash the U.S. corporate-income-tax rate to 15% from 35% and largely exempt future foreign profits. That could make it easier for Apple to put its money to use, through acquisitions or by doling out more to shareholders,” Mickle reports. “Apple Chief Executive Tim Cook early this year said he was eager to bring cash home if tax changes enable it, and Chief Financial Officer Luca Maestri said such a move would give Apple flexibility to do more capital returns… One possible approach would be a special dividend. Apple could deliver such a windfall.”
“With $250 billion, Apple could buy both Tesla and Netflix and still have plenty left over. It also might want to use some cash to pay down some of its debt or look to boost U.S. manufacturing after facing calls last year from then-President-elect Trump to build a plant in the U.S.,” Mickle reports. “Either way, there is a growing sense that Apple’s cash hoard has far outstripped its needs.”
Read more in the full article here.
MacDailyNews Take: It’s a mind-boggling sum. Outstrips the foreign-currency reserves of the U.K. and Canada combined! There’s enough to fuel Apple’s R&D, reward shareholders, and acquire pretty much anything.
Cash buybacks are great for Banksters but not for long term investors.
Not one more share buyback until we have a MacPro workstation on sale- not vaporware.
It also doesn’t help the American worker, which is what the tax repatriation has been about for years.
It should be quite easy for Apple to build a great MacPro. An updated version of the “cheesegrater” should be simple to do as long as we know Apple is fully committed on correcting their current “trashcan” mistake. As long as Apple uses industry standard components and makes sure there are proper drivers for GPUs, it should be a piece of cake to do.
$250 billion dollars and no Mac Pro update light was on. It’s criminal. Macs should be the very finest one can buy, not a concession to goofball design and limitation. Here Apple has a license to print money and sell tons of computers too. All it takes is the will, common sense and very little relative effort.
Reward shareholders… Thanks for buying something and then holding on to that something for years… you need to be rewarded for that as, you know, that’s not a skill that millions of people posses!
Either way, I wonder if the Freedom Caucus will block this just because they know they can? Without their support, it’s as good as dead.
“Money goes where it is welcome.”
Rand Paul
:::MAY DAY UPDATE:::
In Paris, they’re rioting because they want socialism; in Caracas they’re rioting because they have socialism.
Grass is always greener syndrome.
With this obscene pile of $, still Cook is trying to sell goddamned dual core Haswell processor Mac minis with garbage integrated Iris 5000 Gpu. Would someone kindly remind Apple what decade it is? This level of performance would be found in a $200 netbook, not a desktop computer that could and should be able to crunch number and drive dual 4K displays with ease.
Perhaps someone should take all of Apple’s cash, it’s obvious Cook doesn’t have a clue what to do with it.
They’re not trying to sell them, they’re trying to NOT sell them, and doing a fairly fine job at it. 🙂
Remember, the Mini was never about POWERHOUSE TINY WORKSTATION. It was a stopgap for those that wanted to switch to Mac, but didn’t want to do it when they already have their own monitor, keyboard and mouse. I hadn’t thought about it before now, but I wouldn’t be surprised if the Mini disappears.
Not sure I’d describe Trump’s one-page tax plan as “looming.” There’s a little thing called Congress that’s in the way. And based on his insistence that the funding package that was just passed include money for the wall (it wasn’t), and that arts funding be slashed to zero (it was actually increased), or that the NIH budget be slashed (it went up by a couple of billion), I’d say the odds of his tax package going through as is are virtually nil.
Seriously, no estate tax, no AMT and lowering the top rate for millionaires and billionaires? Moderate Republicans will NOT go for it — at least not in the Senate (not if they’re running for reelection in 2018).
Oh yeah, Congress. Congress hasn’t passed a budget since 2009 — nothing but continuing resolutions. The Federal government is spending/borrowing over four-frikken-trillion dollars a year with zero accountability.
There’s plenty of accountability. We get a chance to elect a brand new House (and a third of the Senate) every two years. It’s our own damn fault that we send about 98% of these folks back to their jobs after giving them a 10% approval rating.