“All else being equal, every dollar a company spends on shareholder dividends or stock buybacks cuts a firm’s market cap by a buck,” Kevin Kingsbury reports for The Wall Street Journal. “Without that river of cash, talk about when Apple will become a trillion-dollar company might have ended a while ago.”
“The company early this decade began in earnest to spend on both share repurchases and dividends after some sporadic activity dating to the 1980s,” Kingsbury reports. “Overall, Apple bought $201 billion of stock and paid $67.2 billion of dividends through the opening quarter of this year, according to FactSet data. Add a portion of that back to Apple’s $933 billion market cap and total share value would right now be well above $1 trillion.”
“Apple’s market cap will take a further hit this week as the company updates its share count a day or two after its Tuesday results release,” Kingsbury reports. “The company announced a record $100 billion stock-buyback plan in May and Chief Financial Officer Luca Maestri said then that repurchases would occur ‘at a fast pace.’ The rate has already been picking up, with shares outstanding falling 3.1% in the fiscal second quarter ended March. A similar reduction for this past quarter would cut Apple’s market cap by almost $30 billion versus current calculations.”
Read more in the full article here.
MacDailyNews Take: $268.2 billion in buybacks and dividends – and counting!
Apple is within striking distance of $1,000,000,000,000 – July 31, 2018