“Apple Inc has nearly $29 billion of cash on hand, a pile of money exceeded at only one other tech company, but if the past is any guide stockholders aren’t likely to share in the wealth any time soon,” Gabriel Madway writes for Reuters.
“The iPod, Mac and iPhone maker does not routinely pay a dividend, repurchase stock, or acquire companies, so what it will do with its war chest presents something of a mystery,” Madway writes.
“Many analysts are skeptical that Apple will distribute any of the money via dividend or buy back shares, saying being flush is never a bad thing, especially in an uncertain economy,” Madway writes. “But not all analysts agree.”
“‘I think the pressure is definitely mounting,’ said Scotia Capital analyst Gus Papageorgiou. ‘It’s just too big a number … the cash belongs to the shareholders, the shareholders don’t need Apple to invest the cash, they need Apple to generate the cash,'” Madway writes.
MacDailyNews Take: Gee, that’s very interesting. One question, WTF is Gus Papageorgiou?
Madway continues, “Apple has a history of hoarding cash for a rainy day, said Jeffrey Lin, an analyst at TCW Group. TCW Asset Management owns roughly 2.4 million Apple shares. Although he would not mind seeing a dividend, Lin said stock buybacks have not been proven to boost share prices. Moreover, that’s not why people buy Apple’s shares. ‘A lot of people would like to see it happen … but I think more people care about the bottom line,’ Lin said. ‘If the company’s beating numbers and executing well it’s hard for somebody not to own … you may not like it, but it’s not going to keep you from owning it.'”
“Apple had nearly $29 billion in cash, cash equivalents and marketable securities as of March 28. Only Cisco Systems Inc, with nearly $30 billion in cash and investments, tops Apple in that category among U.S. tech names. But Cisco’s $5 a share in cash pales next to Apple’s more than $31 a share,” Madway reports.
“Apple’s shares and products are holding up well in the downturn,” Madway reports. “An Apple spokesman referred questions to previous company statements about preserving financial flexibility to make strategic investments or acquisitions.”
Full article here.
[Thanks to MacDailyNews Reader “Brawndo Drinker” for the heads up.]
