Apple’s biggest acquisition

“At the end of the first quarter 2013 there were 946,035,000 fully diluted shares of Apple stock outstanding,” Horace Dediu writes for Asymco.

“At the end of the second quarter there were 924,265,000. The 21,770,000 shares that disappeared were purchased by Apple and retired,” Dediu writes. “Apple shares traded between $390 and $463 during the quarter so it’s hard to know exactly how much Apple paid for them, but at an average of $426.5 per share Apple would have spent $9.3 billion.”

Dediu writes, “If we add the 11 million yet-to-be-retired to the 21.7 million already retired and assume $16 billion was paid for them then the average price paid was $488.25… But what is even more interesting is that if we consider the $16 billion expenditure as an acquisition, then Apple has made what amounts to its biggest. It’s more than some familiar companies are worth.”

Read more in the full article here.


  1. At this rate, Apple will have purchased it’s self in under 11 years and still be Apple. How is the crash and dump at Dell going? When it is over, what will Dell be?

    1. Apple is purchasing shares on the open market. The ore shares that Apple purchases, the more that ownership of Apple is concentrated among the remaining shareholders. But Apple is not buying itself.

      In addition, Apple is regularly issuing common stock as part of its employee compensation program. The AAPL share buy back program is also intended to compensate for this potential ownership dilution.

  2. Individual investors are getting shaken out like total schmucks as $440 Apple today is far more valuable at 40EPS with a 3.05 dividend… the company with a PE under 11 that’s about to disrupt the TV industry and the auto electronics industries? So institutional investors accounted for the +$20 stock bump and individuals are buying AMZN with a 3000+ PE because they are doing food delivery… food… haha… terrible margins. I just laugh at the tech market.

  3. Remember existing shareholder will own a greater proportion of the company with a share buyback. For a buyout all the shares would have to be repurchased and Apple could do that with their own money. They would need to raise the cash independently.
    Apple basically reduced share count by 2.5%. That number is not very significant and I bet most of the street would forget about that very quickly. For that reason I don’t think share reduction will be an effective means of increasing the value of the shares. It would be effective until at least 10-20% of shares are brought back.
    Whilst dividends have greater tax liabilities, they are a more visible return of value to the shareholders. Physiologically they can attract buyers more than a buyback.

    1. The stock blueback program will be gradually reflected in EPS. Retiring even just a few percent of AAPL common stock can have a noticeable effect on quarterly EPS. You can calculate what Apple’s 3Q EPS would have been with those shares still outstanding. You might be surprised.

      1. Honest question (or two) Can Apple time the buybacks so that it’s buying from the institutions and not the individual investors? And second, in either case, this should reduce the influence Wall Street has on the stock, shouldn’t it?

  4. My theory as to why Wall Street hates Apple, and so much of the business world monkeys hurls their turds at Apple is simple: They didn’t buy AAPL, (while suckling MS’s teet), and they are pissed at how wrong and stupid they were. So, rather than admitting they were wrong, they hurl turds. That’s what monkeys do. As a small time investor, with a brain on my shoulders, I am happy to have held onto most of my stock – only selling to pay off my house. I LOVE Apple’s strategy here, and I hope the majority of onwers of AAPL are like minded small time players that outsmarted Wall Street.

      1. Actually, many of them DID get nailed by that. They poo-pooed Apple until it got into the $600 range. Then they all said “buy buy buy!” That is why they’re so upset. They missed buying in at $79 a share after the housing bubble burst, and finally gave apple a chance at $600.

    1. You are likely correct.

      The shares were likely not de-authorized.

      Every public company as two sets of shares — one the superset of the other: Authorized Shares and Issued Shares. (There is a third set of “Allocated Shares” but people rarely worry about that unless that number is radically different from the Issued Shares amount.)

      The shares of AAPL that Apple bought back are no longer issued shares — they are no longer out in the public. However, it is extremely unlikely that Apple has changed the number of Authorized Shares. Therefore, technically those shares still exist, they are just not in distribution.

  5. Buying aapl back is a very good investment . Buy when others are scared . Those who sold their AAPL today and think google will hit the 1000 Mark first will be sad as AAPL will hit 1000 Mark in the next 16 months .

  6. So why didn’t Apple just buy Sony? Not only Sony, but AT&T? And a few battery R&D companies? Until Apple owns the innovators, the processes, the means of production, the media providers, and service providers, it will always be at their mercy and at the mercy of copy cat competition. Funny thing is, it could own them, or at least a provider in every industry. That’s what’s wrong with Apple. It could expand its control of competitors, partners and providers, but instead it prefers to live and die by a few products and the competitors that bleed off its busy with copy cat products.

    1. When there are several vendors doing similar — even if not identical — things such as in the battery world you mention or in the media distribution world (you mention AT&T) it is better for Apple to be able to shop around that buy and bring a single vendor and only its technology in house. Doing so sets up an inherent internal conflict between Apple and it other vendors and customers.

      Just look at the relationship between Google and Samsung. That relationship has radically soured since Google bought Motorola. Notice that Samsung has even announced that it is going to have its own developer’s conference independent of Google’s developer conference!

    2. Buying Sony means that Apple would be saddled with all of the issues that Sony currently have, where it’s been haemorrhaging money, and what would they do with it anyway? AT&T? Tempting, but they would be responsible for infrastructure maintenance, and all the costs involved in that, which I’m not sure Apple would be interested in either.
      Apple are much better off finding the small, innovative companies that offer something new, that Apple can quickly and easily integrate into it’s own structure.
      I’m sure Apple, who are working in developing new battery tech anyway, would love to have their own battery fab, but they have to be sure it’s a new, cutting-edge tech that will not only work successfully, but will continue to give long-term advantages, and not suddenly start bursting into flames in an embarrassing fashion, as Sony found with their laptop batteries, for example. The meeja love it when they can publish lurid “Apple exploding iPhone fail” headlines, even when it’s almost inevitably due to the customer monkeying around with an aftermarket battery, or charger, think how much more embarrassing it would be if the exploding batteries were made in Apple’s own factory.

    3. A chain is only as strong as its weakest link. The Apple strategy of building only very strong and specialized links “in house” and hooking up with multiple strong links across industries with enabling tech from the outside minimizes the likelihood that one weak link at Apple could limit their success. Also, if an outside link proves to be weak Apple can unhook from it and hook up with one or more other links to make the chain stronger. It is faster and easier to create a strong chair by linking with others than to have to build and maintain all the links in house, and just one weak link breaks the whole chain.

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