Apple’s cash could buy a safety net for stock price

“March 19 came and went without any dividend news from Apple,” John Paczkowski reports for AllThingsD.

“And with no announced capital allocation plan, Apple’s cash hoard is going from outrageously excessive to obscenely excessive,” Paczkowski reports. “As I noted earlier this week, Moody’s Investors Service believes that Apple’s cash will exceed $170 billion by year’s end if the company doesn’t start returning some of it to shareholders.”

Paczkowski reports, “So why not erase current stock woes with a larger cash distribution? Topeka analyst Brian White thinks Apple would be foolish not to. By increasing its quarterly dividend, Apple could stabilize its stock price. So, if, as White theorizes, the company is generating approximately $50 billion in free cash flow per year, why not do it?”

Read more in the full article here.

MacDailyNews Take: Maybe they want to take the company private or buy Morocco and McDonald’s or something?

22 Comments

  1. The desperation of investors to get hold of Apple’s cash is going from outrageously excessive to obscenely excessive.

    Apple will do what Apple thinks is best. It doesn’t listen to outside commentators, analysts, pundits, bloggers or journalists.

    1. The pile of cash belongs to Apple to do with as the see fit. It does not belong to investors, although that myth has been falsely perpetrated ad nausiem from blowhard business school MBA crooks and swindlers in empty suits for decades.

      It persists because crooks in suits and ties profit from this myth. The truth is that corporations are THEIR OWN LEGAL ENTIES. They have similar rights as individuals. Investment crooks can take their empty suited blowhard opinions and shove them where the sun don’t shine.

      I would love to see a real crackdown in all the crooked mafia boiler room scams that are run through quasi legal investment firms but I’m not holding my breath.

      As far as why Apple ‘needs’ that money, its no ones damn business but Apple. I would suspect that they have far better ideas what to do with it than analysts and investment firms run by crooks who crashed and destroyed our economy a few years back.

      1. Yes, the cash belongs to Apple, but we (the shareholders) own Apple.

        Saying the money doesn’t belong to the investors is a little like saying your dog’s chew toy doesn’t belong to you — because clearly it belongs to your dog. Yes, and your dog belongs to you.

        Having said all that, I’m happy to see where Apple’s management goes with this. Over the last ten or fifteen years they’ve made better desisions in every regard than I have, or anyone else for that matter. I think they’re in the best position to use that money.

        1. The idea that shareholders own a company is also a myth. It is a convenient idea, but not actuall true. Shareholders own stock, which gives them certain rights, but this is not the same as ownership.

          1. And yet if you buy most of the shares in a corporation you can do almost anything you like with it. If you buy them all, you do, in fact, “own the corporation” and all of its assets.

            You can use tricks of language to make that kind of argument about almost any asset. But for all intents and purposes we actually do ‘own’ land, ‘own’ intellectual property, ‘own’ our pets, and ‘own’ our homes.

  2. What Apple needs to do it stick to its core values and make insanely great products. Not a penny’s worth of mental or managerial bandwidth should go towards rewarding the casino players we call shareholders.

    1. Completely agree with your first sentence. The second sentence is total B.S. Apple is a corporation. The stockholders own the company. They have shares of it. Cook and the rest of the BoD own a whole lot more than I (by many orders of magnitude). The BoD has a legal, fiduciary duty to the shareholders.

      1. False. Apple is a corporation and is a legally protected entity. Shareholders do NOT own apple any more than you can legally own a slave. I see you have been suckered in by the business school koolaid myth but its factually and legally groundless with specific cases you can easily look up that prove your assertions false.

        1. What exactly are you smoking?

          If you own a share of the company, that pretty much means what it sounds like — that YOU now OWN a SHARE of the COMPANY.

          You don’t own the whole thing, and you don’t get to directly control what the company does (it’s not a direct democracy kind of scenario). But you do get a say proportionate to the share of the company you own. And should the shareholders decide (together) that returning a portion of the cash (or other assets for that matter) to shareholders is a good idea, well, that’s what will be done.

          Sure, in law corporations are often treated as sudo-individuals. But they’re not some kind of “free agent” entities. Corporations are run by managers who are hired by directors who are appointed by the shareholders.

      2. Apple’s responsibility to the shareholders is to make sure the company produces great products. With record sales, record revenue, record profits, gigantic market cap, best quarter of any tech company ever, I’d say Apple is doing pretty good in fulfilling that responsibility.

        Apple has ZERO responsibility to WS and AAPL, because Apple CANNOT control WS. Apple CANNOT control the asinine expectations and predictions of the analcysts. Apple CANNOT control the SEC and their steadfast refusal to do anything about the blatant manipulation of AAPL by hedge funds, ‘journalists’ an media outlets. Apple CANNOT control the laws or lack of laws that govern the stock market.

        Shareholders make their money through the sale of AAPL. If they and their brokers and experts cannot make money playing the legalized gambling game, maybe they should get out and put their funds into something more stable, like a community credit union or bank where they are guaranteed a return, however small it will be.

  3. Seriously, Apple should buy an island. Make it an independent offshore financial “kingdom”. Move their headquarters there (I assume the mother ship flies).
    R&D plus certain key manufacturing operations should be there. Like chip fabrications.
    This island should also have nice natural beaches. And be topless.

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