“Share repurchases and dividends are often viewed as a good sign for a company since they are ways of returning cash to the investors,” Jim Pyke writes for Seeking Alpha.
“However, returning too much cash can possibly put a company in a more challenging situation should there be a downturn in business or should debt markets freeze,” Pyke writes. “During initial growth phases, companies often return very little capital and quite commonly continue to raise it through equity and debt issuance. Some technology companies are only starting to pay dividends, with Cisco Systems, Inc. a notable example.”
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Pyke reports, “While AAPL is not necessarily unique in the fact that it has a very large rainy day fund set aside; it is unique in the fact that AAPL has shown no interest in giving cash back to shareholders through either stock buy backs or dividends. In fact, AAPL is actively issuing more equity and taking in more cash… I think the market would view an AAPL dividend or stock buy back as a positive event.”
Read more in the full article here.
MacDailyNews Take: Certainly Apple is unique. And, just as certainly, Steve Jobs has a plan for the cash on-hand. Armchair peons should sit back, shut up, and watch it unfold. Stop calling for unique Apple to act like every other company.