“It is safe to say that no one disagrees with the proposition that Apple‘s $137.1 billion cash position is more money that the company needs to operate its business,” Eric Savitz reports for Forbes.
MacDailyNews Take: Depending on Apple’s goals, which no one outside the company knows, that may not be enough cash. (Perhaps it was Steve Jobs’ wish to buy Microsoft outright, shut it down and end the Dark Age of Personal Computing in one fell swoop or maybe he wanted to terraform Mars or maybe it’s insurance in the face of recalcitrant content providers (“last chance: sign the deal or we’ll buy you with petty cash”)? Nobody outside of Tim and/or Laurene might know the true reason for accumulating the cash. Apple might have more than enough cash on hand or they might not even be a tenth of the way to their goal.)
“But the fact remains that not all cash is the same, and that in Apple’s case, $94 billion of the total is outside the country; the other $43.1 billion is held inside the U.S.,” Savitz reports. “Bernstein Research analyst Toni Sacconaghi points out in a research note today that he expects Apple’s U.S. net income in FY 2013 to be about $12.4 billion, which he notes is lower than the roughly $13.4 billion the company has committed for dividends and share repurchases. In other words, for Apple to return more cash, the company will have to turn to some other source than domestic cash flow.”
Savitz reports, “Sacconaghi contends that Apple has two options on where to get cash to boost dividends and/or stock buybacks: Pay the tax man [or] Take on massive amounts of debt.”
Read more in the full article here.
MacDailyNews Take: Wasn’t Apple already taxed on that offshore money? Why would Apple want or why should they be forced to pay additional taxes on that money? Not in the best interest of shareholders. As for the idea of incurring debt, we think “debt-free” sounds and feels much better.
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