“Apple Inc.’s failure to pay a dividend is preventing some investors from buying shares of the Mac, iPhone and iPad maker, according to Toni Sacconaghi, an analyst at Sanford C. Bernstein & Co.,” Tara Lachapelle and Tom Keene report for Bloomberg.
“Sacconaghi said about 10 percent to 15 percent of the investors he speaks with avoid the Cupertino, California-based company because they only buy firms with payouts or they’re concerned Apple will use cash for an acquisition. Apple had $25.6 billion in cash and short-term investments as of Sept. 30, the fourth-biggest amount in the Standard & Poor’s 500 Index when companies with financial divisions are excluded,” Lachapelle and Keene report. “‘As an Apple board member, I would not want to create any reason for people to not want to own my stock,” he said. “There is a reason right now, which is there’s a large cash balance that investors are not giving them full credit for, that investors are worried about in terms of the surprise of a large and potentially value-destroying acquisition, and there are investors who have dividend mandates who also can’t own Apple.'”
MacDailyNews Take: Don’t worry, Toni: Steve Ballmer will be crowned Miss America before you’re named to Apple’s BoD.
Lachapelle and Keene report, “Apple generated $16.6 billion in free cash flow, or money generated from its business minus capital expenditures, in the fiscal year that ended in September, according to the company. Given the company’s $281.1 billion market value, a 5 percent dividend yield would cost it $14.1 billion annually.”
Full article here.
MacDailyNews Take: Toni, go back to searching for your “missing” iPhones, you broken record. Steve already answered your incessantly repetitive crapola this week:
“Of course that’s been suggested to us. We strongly believe that one or more very strategic opportunities may come along that we can take advantage – that we’re in a unique position to take advantage of because of our strong cash position. I think, we’ve demonstrated a really strong track record of being very disciplined with the use of cash. We don’t let it burn a hole in our pocket and we don’t allow it to motivate us to do stupid acquisitions. So, I think that we’d like to continue to keep our powder dry because we do feel that there are one or more strategic opportunities in the future. That’s the biggest reason. There [are] other reasons as well that we could go into but that’s the biggest one.” – Apple CEO Steve Jobs, October 18, 2010