Moody’s: Apple now holds 10% of all U.S. corporate cash

“Apple Inc.’s $147 billion cash hoard now counts for nearly 10% of all corporate cash held by nonfinancial companies, according to an analysis by Moody’s,” Emily Chasan reports for The Wall Street Journal.

“U.S. nonfinancial companies held $1.48 trillion in cash as of June 30, according to Moody’s review of the more than 1,000 companies it rates. Cash stockpiles have grown by about 2% from $1.45 trillion at the end of last year, and up 81% from $820 billion at the end of 2006,” Chasan reports. “Corporate cash is still concentrated in just a few hands, with the top 50 holders accounting for 62% of the total. The companies with the five largest cash holdings – Apple, Microsoft Corp., Google Inc. , Cisco Systems Inc. and Pfizer Inc. – held more than one quarter of the cash.”

“Despite dividends and buybacks Apple, has about 9.5% more cash than it did at the end of last year,” Chasan reports. “Apple has nearly double the cash hoard of its next closest rival, since Microsoft has the second-largest cash stockpile at $77 billion.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Dan K.” for the heads up.]

29 Comments

        1. Mac Daily News constantly comaining how crap other systems are and how easy and good all Apps are on the App Store. And I’m a huge fan of Mac Daily Nees and Apple but this App is probably one of the worst in the while App Store. It’s crappy, buggy it lacks basic features. It’s ugly and never revives any updates. The only thing that is good with it is the Push Notifications. But that is nothing special. Mac Daily News should honestly be ashamed over their crappy App which really should be one of the best in the App Store but its one of the worst.

    1. Wants his cut? Do you not understand that “Apple’s cash” is really Apple’s shareholder’s cash? When Carl Icahn is pushing for a larger buy-back, it doesn’t benefit him at the expense of everyone else. It benefits all shareholders, whether you’re holding it for the next 20 years, 5 years, or 1 day.

      Really the commenters here and on other blogs talking about AAPL the stock have no clue what they’re talking about.

      1. Wrong! It only benefits the short term investor.

        Certainly Apple should likely return more money to shareholders but not near the amount Ichan wants. Apple would need to borrow to do it. All that kind of buyback will do is give Ichan and his lot a quick profit; they will then dump the stock. The stock will then come back down on the expectation that there won’t be that type of return again anytime soon. Ichan will be long gone with his profits and long term investors will be left stuck. Apple has enough cash on hand that is should devise a plan to return any new profits to investors while keeping the current balance sheet. Doing it that way will increase long term valuation of the stock because for a share holder to cash in you will need to stay with Apple stock. That will also allow allow Apple to keep enough cash on hand to make major strategic moves should it need to. It won’t please Ichan because he won’t be the main beneficiary but he doesn’t need the money.

      2. Well, its not really that simple. Icahn is not an investor in Apple because he has a long term view about the company’s success – he want to make money from dealing in Apple stock, and his priorities are not necessarily aligned either with Apple’s priorities or those of other shareholders.

        If there is a major economic collapse (and their might be) then Apple’s cash cushion will not only keep the organisation running, but provide opportunities for acquisitions in diverse areas. They might, for example, buy a telco or two, or a tv network, or someone like HBO. Steve Jobs was keen to keep cash on ice for opportunities such as these and I am sure Cook is of the same view.

        That said, Apple’s cash hoard is probabiy larger than anyone at Apple imagined it would be. Cook has made some concessions to wall street heavyweights like Icahn, but retained most of the cash.

        Apple know what they are doing. They don’t need Icahn to advise them on their business, and I am sure they appreciate his motives are personal.

        1. I don’t agree with all of your points. Apple has way more cash than it needs and stock buy back at Apple current price is the best use of that cash anyone could think off.

          Your note about Apple moving into other business is exactly why many worry about how Apple will spend it’s cash. Current Apple management is focused and I don’t believe will make big investment bets in industries they don’t understand, but I’m not so sure about a second generation of managers behind the current senior guys. So on this one I’m with Ichan, Apple should buy back stock at theses prices very aggressively.

      3. See my post below. Apple needs to tell all stock brokers, analysts, investment brokers to piss off. Apple got here doing it their way for the last how many decades?

      4. Of course it benefits Carl. The more shares Apple takes out of circulation, the greater percentage Carl holds. The limiting case is when all the other shareholders’ stock is repurchased, and Carl holds 100% of the outstanding stock. At some point, before then, the corporate raider will have enough stock to exert control on the company. Then he can ruin Apple, as he has other companies. I sincerely hope Mr Cook is sensitive to this second order effect.

        1. Some truth in what you say but do the math: he claims to hold $2 Billion in stock out of a market capitalization of $445 Billion. So he controls 0.5% of the outstanding stock. He won’t control voting in his life time. So your point does not apply here. I strongly agree with SunbeamRapier above.

    2. Apple holds more than 7 times Icahns total worth. He needs to go back to his own end of the pool. This isn’t some mid-size corporation that’s having cash flow troubles that he can raid for the value of the employees pension funds. Tim needs to rell him to stick his piddly $2B where the sun doesn’t shine and stop wasting his time.

  1. Okay, so let me get this straight:

    – #1 Brand – Most valuable brand in the world
    – #1 Innovation – Most innovative company (according to other CEOs)
    – #1 Cash – Largest cash hoard in the United States
    – #1/#2 Profits – The first or second most profitable company

    But:
    – People actually believe Apple is in trouble
    – That the iOS / Mac ecosystem is deeply troubled
    – The stock trades at a discount to the S&P P/E Average (Just remember, Apple trades at ~11.5 P/E, where Coke [Yes, Coke] trades at a ~20 P/E)

    Is this never-neverland? Seriously folks, it’s critical that the truth about Apple gets out, and you can make a difference

    1. This. This fact is why Wall Street picks on Apple. They are pissed that they can’t touch that huge pile of money.

      They will do whatever they can to destroy Apple, acquire them, bleed them dry, then break it into pieces and sell it all for more money.

      They can’t see 30 days past today. All they want is instant gratification.

    1. Just yesterday I had a customer that is old enough to be a grandmother working at a PR firm say, “Yea I heard people were getting sick because of iOS 7.”
      I just shook my head. If the news repeats it enough, everyone believes it.

      1. I agree. The story was obviously a plant by a competitor, but got huge play. The parallax is almost un-noticeable. My son had to point it out to me. And it can be turned off, I believe. Its about time for some factory suicide stories to emerge again and electrocution from a 5C.

  2. Apple holds most of the corporate cash and it will continue to do so. I’m curious about what Apple intends to do with all that overseas cash. I sure hope they have some grand scheme that I can’t even imagine because right now it’s just sitting in some foreign bank collecting the barest amount of interest. With that kind of cash Apple should be able to turn Wall Street upside down but instead remains one of the worst performing stocks of all 2013. Just unbelievable. I guess I’ll just have to hope for an increased dividend next year.

    1. You’re aware that Apple being “one of the worse performing stocks of all 2013” – which I doubt – has nothing to do with their fundamentals, don’t you?

      Any other company as successful as Apple would be worth significantly more.

      The question is why isn’t

  3. I have been an Apple Shareholder for 15 years. I have no complaints for one of they highest performance stocks in history. Apple’s return to its shareholders is the fact they are the highest valued company in the world AND the highest valued BRAND, outpacing Coke, who held that position for 13 years. Icahn is a bully and only interested in his short term pocketbook, like he really needs more money!

    Apple’s current buyback program is the most aggressive in history and their dividend of over 3% us generous. If Steve Jobs were still alive, we might have more clash, more game changing products, but NO dividends and NO stock splits or buybacks. People should quit bitching about Apple like the sad sacks on Wall Street who have been wrong for 10 years and running. How is that Dell stock doing? Microshit doing pretty well too, right?

  4. This is NOT an indication of how much Apple has in cash. It is an indication of the poor financial situation for most other U.S. corporations. Yes, Apple’s pile of cash is VERY large, but it should NOT account for 10% of the total.

    And if you included debt as “negative cash,” as part of the equation, Apple’s “net cash” portion would be MUCH higher than 10%.

  5. I know that this goes against the Apple religion, but Apple’s accrual of so much cash really does represent poor management.

    If you personally choose to take all the money you make and stuff it under your mattress, fine. But Apple is responsible to shareholders and — much more importantly — to the employees and users.

    Stop hoarding, Cook. It’s time to use your obscene pile o’cash to make new products. INNOVATE. Buy a few companies. Enter a new market. Do something that doesn’t attract the parasites of Wall Street.

    1. Have you been asleep, Mike? Apple has been innovating, buying companies, entering new markets. . . or haven’t you noticed? No matter WHAT Apple does the wolves of Wall Street will be slavering at the door. . . it doesn’t matter. . . and you will be posting negative comments.

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