“Eighteen-and-a-half billion dollars is a lot of money,” Arik Hesseldahl reports for BusinessWeek. “It’s more than the estimated 2007 gross domestic product of Nicaragua. It’s bigger than the estimated 2005 expenditures of no fewer than 20 U.S. states. It’s enough to give $60.78 to every person in the United States, and $2.77 to every person in the world.”
“And most importantly for Apple (AAPL) investors, it amounts to $21 for every share of company stock—and as of the end of most recent quarter, it’s the cash pile sitting in Apple’s coffers,” Hesseldahl reports. “Shareholders certainly have shared in Apple’s success over the years. The stock topped out at $199.83 on Dec. 28, an almost 19-fold increase over five years. Yet the growth in the company’s cash hoard is starting to make people wonder, What exactly will Apple do with all that money?”
Hesseldahl writes, “Apple ought to return some of that cash to its shareholders in the form of a buyback… An aggressive stock repurchase plan will do three good things for Apple shareholders.”
• It will send an unambiguous signal that management believes Apple’s best days are ahead
• Word of a buyback would probably give the stock price the kind of upward lift it needs
• Reducing the number of shares outstanding—currently about 879 million—would boost earnings per share.
Hesseldahl writes, “While I’m the first to praise Apple management for the smart way it has run the business over the last several years, its lack of plans for its cash is starting to ring hollow.”
Much more in the full article here.
[Thanks to MacDailyNews Reader “Alex” for the heads up.]