“If Apple does indeed reach a market value of $1 trillion, the accomplishment may be all the more unique given the company’s effort to lighten its massive cash load,” Dan Gallagher reports for The Wall Street Journal. “Apple has been buying back its own shares at a furious clip since last year’s tax-overhaul package freed up more than $250 billion that the company had accumulated in its offshore bank accounts.”
“Apple repurchased about 137 million shares on the open market during its fiscal second quarter that ended March 31, which is more than triple the pace of buybacks averaged over the previous eight periods,” Gallagher reports. “It also represented about 6% of the total volume of Apple shares traded during the quarter—the highest percentage seen in more than five years, according to Toni Sacconaghi of Bernstein.”
“The elevated repurchase activity has likely continued. The company said on its last earnings call that it intends to complete the $10 billion remaining on its current buyback plan before the end of the June quarter. It also announced a new $100 billion buyback that Financial Chief Luca Maestri said would be executed ‘efficiently and at a fast pace.’ Mr. Sacconaghi estimates that buybacks could account for 4%-8% of Apple’s total share volume over the next four to six quarters,” Gallagher reports. “Buying back shares is tax-efficient way to return cash to shareholders…”
Read more in the full article here.
MacDailyNews Take: Not “if.” When.
SEE ALSO:
Apple’s $1 trillion market value is a moving target due to record buybacks – May 29, 2018
Apple will reach to $1 trillion market value sometimes next quarter. 🙂
Long AAPL.
Not a stock market guy. But does Apple take these stocks out of circulation or do they keep them to use for employee compensation or both? You would think if they are taking them out of circulation then the stock would have to go that much higher in price in order to reach 1 Trillion mark.
Example:
Stock out 100
Stock Value is 1,000 Share
Market Cap is 100,000
Buy Back of 10 Shares and removes them from Circulation.
Stock value is still 1,000
Market cap would now be 90,000
Stock would have to go to 1,111 to keep the market cap at 100,000
This is what I absolutely hate about today’s financial “Journalists”: the quality of their reporting.
During FY2015 Apple bought back 289,563,000 shares.
During FY2016 Apple bought back 289,186,000 shares
During FY2017 Apple bought back 209,748,000 shares.
During FY2018 Apple is on track to buy back 195,959,000 shares.
During FQ2/2018 (Gallagher’s reference quarter) Apple bought back 89,294,000 shares.
All data comes directly from Apple’s SEC filings (10-Qs).
Apple buys back, each quarter, about 3.8% of the previous year’s quarter total shares.
And it’s not money back in the pocket of a shareholder.
It literally is, as the shares have to be bought and paid for from a shareholder(s).