“All of us were reminded over and over and over during the last few days that Apple has more cash on hand than does the U.S. government,” Bob Cringely writes for I, Cringely.
“There’s a mystery about Apple’s cash and that mystery has to do with Steve’s strategy for holding all that money.,” Cringely. “What’s it for”
Cringely, “The predominant theory seems to be that Apple intends to make a huge acquisition and periodically there are rumors of Cupertino buying this big company or that, with Hulu being the latest supposed target. And maybe Apple will buy Hulu (actually, I don’t think so, but let’s assume they do) but that will still leave Steve with $74+ billion, so the Apple money story won’t be going away. I think Apple has raised all that money for the sole purpose of….. having a lot of money. I don’t think Steve intends to make any major acquisitions at all, though that says nothing about a post-Steve Apple.”
Read more in the full article here.
Cringely’s article is very misleading in referencing GE. Apple has a ton more net cash and it’s completely out of line with every other company. GE has $136 Billion in cash because it has almost $500 Billion in debt. It needs to have the cash on hand as a condition of the enormous debt it holds.
Apple has zero debt.
Apple should keep it’s powder dry and use the cash strategically as they see fit.
So far they seem to be doing pretty well with their thinking.
They don’t need to ask anyonevfor monet.
If they want to implement an idea or seize an opportunity, they don’t need to ask if they will be able to pay for it.
Apple, keep doing what you are doing and hang onto the cash.
SJ is saving to buy somebody’s body and transfer his brain to his head. This person should be extremely healthy and very dumb as to not waste a perfectly good mere mortal. Any ideas for a subject?
Apple has piles of cash for 2 reasons:
1. Apple can buy whatever it wants, whenever it wants, and for the best prices (components, companies, patent portfolios, etc.);
2. Apple can fight off any challenges to itself, whether legal, competitive, etc.
Actually having a lot of cash makes it easier for some other company to buy you, right? So, Apple is worth $360B, BUT, about $80B, now, is cash in the bank. A takeover means you also takeover that $80B, so the true cost of a takeover would be $280B, not $360B.
Of course, only sovereign companies would have the financial resources to takeover a company the size of Apple, but the point is, too much cash on the balance sheet is actually an incentive for a takeover.
Apple products rely quite heavily on content, especially audio-video content. But Apple does not control the creation and ownership of almost any of this content. That is its Achiles Heel. So when it becomes necessary, Apple has the money to buy major content providers, such as movie, TV and/or music giants, or, alternatively, set up its own content-creation operation.
Remember when Apple had to borrow money from Microsoft to stay afloat?
So does Steve.