Brett Arends writes for MarketWatch, “Enough of the Apple ‘iPad’ hype already. Is it an iPod that doesn’t fit in your pocket? An ‘ebook’ reader with even less battery life than an iPhone? Or just a netbook that lacks a keyboard?
“If Steve Jobs really wants to help his stockholders, there’s something much simpler he could unveil later this month instead,” Arends writes. “A dividend.”
“Apple Inc. is sitting on billions of dollars in stockholders’ money,” Arends writes. “The chief executive should stop the miser routine and hand it back to its rightful owners.”
“This is not all money Apple needs to run its business. Most of it is sitting in low-yielding investments like short-term corporate bonds. It’s earning next to nothing,” Arends writes. “And that’s bad news for investors. Many of them may not realize it, but it’s dragging down their returns. It’s costing them money.”
“Why is Apple hoarding its cash? A company spokesman explains: ‘We have maintained our cash and strong balance sheet to preserve the flexibility to make strategic investments and/or acquisitions.’ In short: In case they want to spend it,” Arends writes.
“Steve Jobs really doesn’t need an acquisitions warchest of around $30 billion, and it is alarming to think he wants one,” Arends writes. “He should start handing back this money to stockholders through dividends. Regular, quarterly dividends are better than a one-off special payout because they impose financial discipline on the management. But the core principle is the same in either case. The money belongs to stockholders: Give.”
Arends writes, “Indeed Jobs should go further. Apple should — gasp — start borrowing, and hand that money back, too.”
Full article here.
MacDailyNews Take: Call us crazy, but we trust the judgment of Steve Jobs, Tim Cook, and Peter Oppenheimer more than that of Brett Arends. In fact, we trust the judgment of just about anybody more than that of Brett Arends.
If you are investor in [Apple (AAPL)] stock, brace yourself for a dose of reality. The shares’ best days are surely behind them. – Brett Arends, July 22, 2009
Shares of Apple Inc. closed at $156.74 on July 22, 2009. They current trade for $208.86. Up 33.25%.
For a more, read Daniel Eran Dilger’s “Who’s paying Brett Arends to malign Apple?” article over on RoughlyDrafted here.