Slashdot Mirror
Apple Has Too Much Money
Hugh Pickens writes "AP reports that last week during a question-and-answer session at the company's annual shareholders' meeting CEO Tim Cook said he believes Apple has more money than it needs and his next challenge is to figure out whether Apple should break from the cash-hoarding ways of his predecessor, the late Steve Jobs, and dip into its $98 billion bank account to pay shareholders a dividend this year. 'Frankly speaking, it's more than we need to run the company.' The question of how to handle Apple's cash stockpile is a touchy one, partly because company co-founder Jobs had steadfastly brushed aside suggestions that the company restore its quarterly dividend which Jobs suspended in 1995 when it was in such deep trouble that it needed to hold on to every cent to keep from going bankrupt. Marketwatch analyst Mark Hulbert writes that a compelling case can be made that a huge cash hoard actually represents grave danger for Apple. That's because too much cash often burns a hole in managers' pockets, and they end up doing a poor job of investing that cash—engaging instead in foolish pursuits like empire building. Hulbert adds that a good strategy for ensuring that Apple remains a hungry, growth-oriented entrepreneurial company might be for it to distribute much of its cash to shareholders."
I thought I was a genius for doubling my money.
Smivs rushes out to buy Apple shares
Smivs on the intertubes!
Maybe Apple can buy Adobe and send Flash to the tomb, or maybe and even better buy Google and kill Android once and forever. I have also AMD or Intel in my mind, Microsoft also, but it's sure that Apple needs to make a move of this kind. It's bad for the company to keep all the money doing nothing.
Apple is one of the most successful companies in the world -- right now.
But everyone with a soap box seems to think they know better than Apple management how the company should be run.
If they are really that smart go start your own company and beat Apple at it's own game.
just start charging less for their wares? Ya know, give back to the suckers that made them rich in the first place?
Dividends are just a marketing gimmick. The only winners are the brokers. I'm perfectly free to buy or sell the stock as I see fit. A dividend just lowers the value of the stock that I've already bought. So I'm forced to buy MORE stock and pay more commissions just to remain in the same place. Ridiculous.
. . . pick some good staff and management to run them, let them come up with some good ideas. And just wait and see where they go. If nowhere, tough luck, but the mother ship's kids won't go hungry. On the other hand . . . maybe they might end up with a valuable subsidiary.
Giving cash to shareholders won't work. They will just use the cash to go out and buy yet again more Apple products.
So then Apple will be stuck with the money again, and not know what to do with it.
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
Its fine for Apple to keep billions in reserve for R&D, acquisitions, and even a rainy day that may come - but to horde that much cash without having a real plan for it is irresponsible. The shareholders own the company and should get dividends if management doesn't have a better use for the money.
by reducing prices a little. Apple make great products, but their prices are higher than most of their competitors'. Seems like a great way to stay competitive with Google and others, who seem to have lower profit margins per unit sold.
Take half the money, divide it into 3 piles, for the 3 stakeholders:
1) Shareholders in the form of a one-time dividend.
2) Employees get a one time bonus
3) Customers get a gift card based on their purchases in the past quarter.
Apple is still left with 50 Billion, and keeps everyone happy.
When they hit $100B again, rinse & repeat.
Reality has a liberal bias
How did jobs manage to suspend Apple's dividend in 1995 when he was still working at NeXT??
"Slow down, Cowboy! It has been 3 years, 7 months and 26 days since you last successfully posted a comment."
If they ever to give dividend , they will destroy the company, beacuse the company is heading down hill , and it will need the money to last the many many years to come with no innovation.
They could use the money to be more innovative. if they are asking "in what" then apple is in a huge problem in the coming years.
"... which Jobs suspended in 1995 ..."
Uhuh. Right ... when he was at Next ... That's not even in the linked articles. You made that up.
"... a good strategy for ensuring that Apple remains a hungry, growth-oriented entrepreneurial company might be for it to distribute much of its cash to shareholders."
LOL. Stay hungry, stay entrepreneurial, send me your money!
In fact Tim Cook didn't suggest any dividend, that's just wishful thinking. Why should Apple do that when the stock price is still rising? There are one or two chinese people they can some iStuff to ...
Cash them in for 1 dollar notes.
Put them in a big pile
Set them on fire and use the heat to power the new data center.
Also helps reduce inflation.
Or just fill a swimming pool with them.
I'll give it a good home!
Here's an idea: buy up all patents on H.264 and make them freely usable. Then W3C would have no arguments not to use it in HTML5, google will have no excuse not to implement it, apple will have a head start on getting it implemented on all their devices, and we can have the fucking internet back.
I wrote my first program at the age of six, and I still can't work out how this website works.
And solve the energy problems forever.
hmm what bubble?
- should i invest in company that tries to pay fair wages and make employees feel good/have nice life and earns just 25%/year profit
or
- should i invest in company that takes as much advantage of its workers and uses them as slaves, uses child labour, with some of them even killing themselves as consequence, but earning 100%+ ROI per year?
easy to answer for me, and probably majority people investing money, what do i care about other poorer people and how they live, i will go with one earning me more money, no matter what
I couldn't read the linked article (I seriously need to log in to view an AP news article hosted by Google? That's rich!) but that's not at all what I have heard Cook discussed. He downplayed the likelihood of a dividend payout and made it sound much more likely that Apple would find other ways to invest the money. In fact, his quote (re dividend payouts) was "My message there is that the board and the management are thinking about this very deeply... and we will do what we think is in the best interest of shareholders." Call me crazy but that sounds an awful lot like "look, we're not going to outright say it, but we're NOT paying dividends. We're thinking of other ways to invest the money that are better for the company which is, in our opinion, better for the shareholders."
Look, I know investors _REALLY_ want a dividend payout because it amounts to free cash (and lately the trend is "Apple, you have tons of cash - GIVE ME SOME!!") but, face facts people, the company has a history of not paying dividends, they don't feel it's a good use of their money, and they feel there are better ways to invest the money. Just accept it and move on.
Want to get dividends? Invest in stocks that pay dividends.
Apple has $90 billion in actual cash value, but it couldn't offer most of it in a dividend.
Why? Most of that $90 billion is held offshore. To offer a dividend, Apple would have to repatriate that money, and that will kick in an automatic tax (about 30% off the top). Then, to issue the dividend, Apple pays another tax. Also, the income is taxable capital gains for its stockholders as well. By the time Apple stockholders take the dividend to the bank, they're down to somewhere around 20% of the original cash.
If Apple wants to reward stockholders, it could buy back shares overseas. Normally, I hate stock buyback plans, but this is one of the few times it would make sense.
That only makes sense if any cash that a company has is invested in projects which can generate the same kind of return that generated the excess cash to begin with. That's excessively optimistic and as the summary noted, if a company has too much cash on hand and the shareholders never ask for any of it back, that creates an incentive to invest in projects with a sketchier prospect of a solid return.
Brain: We must prepare for tomorrow night
Pinky: Why, what are we doing tomorrow night?
Brain: We're going to go to Cupertino.
Pinky: What will we do when we get there?
Brain: The same thing we do every night, Pinky - try to take over the world!
...and fly a man to Mars. :)
Ezekiel 23:20
Abysmal timing to announce "we have more money than we actually know what to do with" so hot on the heels of the negative stories about workers rights in the factories making Apple (and other) components. Perhaps they wouldn't have the "problem" of having such a colossal cash mountain if all workers in the supply chain were paid a fair wage?
And depressing that the best suggestion for dealing with the cash mountain is to distribute it to investors (to keep already highly valued share prices inflated), rather than any one of a hundred other uses- from increased pay, smaller profit margins on sale prices, increased R&D to come up with some truly innovative technology, or even just good old fashioned philanthropy.
That can't be cheap, unless they skip on the FTL travel.
But everyone with a soap box seems to think they know better than Apple management how the company should be run.
If they are really that smart go start your own company and beat Apple at it's own game.
They don't know either.
If Apple's management were such geniuses, then why don't they take that cash and start another business line that will make them even more successful?
Or for a bad idea, buy a company that will add to their business - like Intel? (Using cash for acquisitions almost always turns out to be a bad decision. )
Sitting on a load of cash is a sure sign that management doesn't have any good ideas in the pipeline to keep the business growing and the company is headed towards stagnation.
It happened to Microsoft.
congratulations, capitalism. after Jobs passed away, it took less than a month for the hedge funders to begin the pillaging of the organization for their own personal aggrandizement.
apple will soon become 'the next HP', a gutted wretch whose main business is screwing people out of toner ink. bravo.
I know they get criticized for it, but until there's a shareholder revolt and/or people stop buying the stock (fat chance), I don't see the "need" to pay out a dividend. Apple could instead do one or more of the following:
1. Lower its profit margins and steal even more market share from its competitors. Tons of people already buy Apple products; imagine if they were that much cheaper.
2. Hire an even more talented workforce by offering "way above market" pay. Establish a threshold like 10%. Fire the lowest performing 10% of Apple employees. Technical, design, sales, the whole nine yards. Then give everybody who's left a 25% raise. Then fill the vacant positions with "superstar" caliber replacements. (Note: it shouldn't do this unless it's confident it can accurately gauge employee performance.)
3. Get into a market it doesn't yet play in and dominate it. This with the understanding it will incur a short-term financial loss. Prior to the iPhone's release, who would have ever thought the most popular phone in 2012 would be from Apple? Not me.
making you work 80 hours a week, making you live in a tiny room with 20 other people, make you use dangerous chemicals that damage your brain, threaten you with prison for even talking about a union, etc?
Apparently Greece would love some of that money...
"easy to answer for me, and probably majority people investing money, what do i care about other poorer people and how they live, i will go with one earning me more money, no matter what"
Romney, is that you?
Pay a dividend, and let your investors decide how to diversify.
Are you seriously suggesting that Apple start running some mines? Absurd. No one at Apple has any idea how to do that.
i dont understand why people who believe in the free market keep looking to China as some kind of model on a hill. China is run by the Communist Party, and the corporations over there are part owned by the same party.
There are no labor unions, there are no workers rights laws, there are no environmental laws. There are mines and factories that are run on prison labor - 'criminals' being people who speak things the government doesnt like. Criminals being people who mention forming a union. That is not a 'free market' upon which wages were decided. That is a captive market, not a free competitive market.
In case you have forgotten, slavery was what the Republican Party was founded to eliminate from the face of the Earth. Not to make a profit off of it by claiming it was 'fair'.
The idea that someone should not have to inhale N-Hexane on an assembly line to save 1% on the cost of a product has nothing to do with 'socialism'. It is about basic human decency, basic morality, basic common sense. It is about the difference between a civilized society and lawless barbarism.
How about Apple invests in a server business that corporations can actually use? Buy Windows client and AD licenses for all Macs ... no, all Apple devices. Build a better AD than Microsoft, own the corporate environment, give big customers real choices. Interoperate better with Linux. Extend SAMBA and support FOSS projects... (who am I kidding, right?)
Good on Apple for being extraordinarily profitable. While it would eat in to that profit, Apple should seriously considering bringing their manufacturing to the states. $98B would go a long way toward building a [financially] sustainable infrastructure for US manufacturing. Do it now!
stubborn tiny lights vs. clustering darkness foreverok?
No, they don't know how to do that. Yes, paying a dividend out is a perfectly fine, totally reasonable idea (and in fact that's what investing is about - getting some cash flow). But they are not go8ing to do more than 25% payment on an earned dollar (that's rare), the real distributed tax in US is HUGE, it's 64% (of-course Apple isn't paying all of that, it's has enough accountants and lawyers to make sure), if the money isn't paid out though, it can be reinvested, and it doesn't have to be Apple's people, they can diversify by buying shares in mining companies, agriculture, etc., they don't need to know how to run those, they just need to evaluate the potential investment and always keep eyes on them.
Does it make sense? Well, one thing is for sure - Apple is not going to be on top of this hardware game forever. Saudi Arabia is diversifying out of their oil business, because they know oil won't last forever, so they build infrastructure, new islands, buildings, parks, whatever they do - it's aimed at long term preservation of cash flow.
You can't handle the truth.
Complete bollocks dividends are the major part of the return from any portfolio of securitys - this is investing 101 its also real money you cant fake dividends via dodgy accounting practices.
Now, Jobs is gone. So, unless the current board has plans to go "Thermonuclear" on someone, it's time for some dividends.
Schools and hospitals etc...
Oh who am i kidding.
It's not like there are people starving on this ever so filthy planet.
If they have so much money that they don't know what to do with it, they could stop suing the world around patents.
No, it's the manager of your mutual fund. Which makes you as evil a capitalist as anyone.
No, because you get to keep the dividend and use it to buy more stock if you prefer.
They could spend 50 billion of it on curing cancer. You know, I wondered why Steve Jobs didn't do that .. I kept putting off writing to him to tell him to do that -- I now regret that. All he had to do was get all the world's top cancer scientists together to work on the problem in a focused way. He did that with computer animation and it worked. He did that with smartphones and it worked. Why can't it work for cancer or for regenerative medicine (growing new body parts)?
And yes, it would be massively profitable .. they can charge the equivalent of 1 or 2 years of chemotherapy for the cure. The insurance companies would gladly pay for it (it'll be cheaper than paying for 3-5 years of various expensive chemotherapy drugs and tests that the average cancer patient needs).
They would get their invested money back within months.
Obviously, they do a pretty good job - how about giving them 5x or 10x as much money and a 40 hour work week? Now THERE'S a great idea.
Shoes for Industry. Shoes for the Dead.
The fundamental value of a stock is the sum of future payouts in the form of dividends, spinoffs or liquidation. For companies with finite resources, such as a mining company, this is easier to compute than for a technology company like Apple. But if Apple would never pay a dividend or spin off parts, the value of the stock is zero. The discussion above shows a remarkable lack of understanding of the basics of capitalism. The only reason not to pay a dividend is that the money is better invested in the company now so that it will generate even higher profits for the owners in the future.
When you buy stock you own part of the company. Isn't it kind of silly to not take any of the profit out of the company you own once it's mature and has all the money it needs for operations into the indefinite future. Intentionally deciding not to get paid as the owner of a company seems silly.
E pluribus unum
All those starving lawyers out there and all that cash laying around... obscene amounts of cash... private army amounts of cash... could buy a dozen small to medium sized nations for that amount of cash.
Apple could buy every politician on the planet for just about that amount of cash. They could sustain legal aggression against competitors indefinitely for that amount of cash.
But don't even THINK about bringing manufacuring and support back to the US... Apple doesn't owe anyone anything.
More patents!
More trademarks!
More copyrights!
More lawsuits!
More control!
Oh, and one more thing...
Informative+insightful
There are several tablet type devices that are about to clean Apple's clock with market share of the "less than a month's wages" priced tablets. Apple could starve all of them out of the market by slashing prices on iPod Touch and iPad devices down to a reasonable level. I'd get two or three of each at a $100 or $200 price point for the Touch and Pad. iPads are great, but they cost to fucking much. I can get 80% of the functionality at a fifth the price. I still want an iPad, but won't consider one because of the huge cost. Spend a few billion pushing some of the players out of the market once, and everybody will look at the rest and realize they could do it again and they'd stay out (or make something that's better).
The problem is you're playing the greater fool game. If you intend to make money by selling a stock at a later date, then what you're saying is that you think you can find someone willing to buy AFTER you got the value out of it. Your buying strategy is also then based on inside information, "intuition" or some other divine insight, otherwise people would have already known and driven the price up. Another downside is that you have to actually SELL your assets to get any money from them.
The old school way which is now gaining popularity again is to buy companies that pay dividends. This gives you a return without finding a fool to sell to or cashing out. It's how it's supposed to work. If the stock goes down, it's not even relevant unless they cut the dividend (there is eventually a correlation there). Now a few words about yield. A company can only pay (long term, at most) a dividend of 1/PE where PE is the price/earnings ratio. So a PE of 20 means they can potentially pay a 5% dividend if they pay out all the earnings. A PE of 10 is potentially "undervalued" in this regard. Apple with a PE around 15 isn't actually bad, they should probably just start paying a dividend based on earnings and keep the pile of cash for a rainy day. Then the dividend could be kept up during tough times.
Give the money to Santorum's campaign. I'm pretty amused by what he's done so far, and I'd like to continue to see this trainwreck stay on the rails while it remains lulzy. I greatly admire his support for keeping women perpetually pregnant, opposition to same sex marriage, and his precious belief that becoming president would grant him the kingly powers required to overturn Supreme Court decisions.
Giving just 30 million dollars would invigorate his campaign at a fraction of the cost of filming a similarly funny season of a comedy show, and there's the added bonus that the fucknuts may actually get in to office. Imaging the fun as a repressed woman hating social conservative to the right of the Pope would seated in the Oval Office? It'd be like smearing bananas all over the controls of a cruise liner and letting the chimps loose to run things. Perhaps Palin would be willing to take a position in his cabinet! Oh, that would be fucking amazing!
Through last summer I hemmed and hawed about whether to hold or sell; my Apple shares had gone up 500% and were hovering around that point. Then Jobs passed, and I kicked myself for not having pulled the trigger before then. The share price dipped, of course, and the temptation to join those heading for the exits was strong.
But it was reading Slashdot that kept me on board. I had not been aware that Tim Cook had already been running the company for quite a while, that he had been thoroughly groomed by Jobs, and that Jobs had left a roadmap for several years of products.
Flash forward to February 2012 and the share price is up 700% from where I bought it, and they're mulling a dividend. Thanks, Slashdot!
Do what you can, with what you have, where you are.
Ok, here's something that I'm sure will piss off a lot of people, (maybe even myself if I think about it!) but why doesn't the US enact a law that mandates a majority of Apple products SOLD in the US be MADE in the US? (not just designed)
I know this would suck for consumers (and the corporate planners at Apple which would have to deal with the havoc this would cause their supply chains) but it would bring back manufacturing jobs to the US (now we'd just have to keep those pesky migrants from taking them!). I mean, this wouldn't be illegal by international trade rules would it? (Brazil has a similar policy and it's still a member of the WTO). Also the auto industry has something like this in place, lots of foreign car companies manufacture cars in the US.
Like I said, this is not going to be popular with lots of people, even me a (very) happy Apple shareholder. However, as a committed well-off Democrat, I'm used to advocating positions that might not be good for my own self-interest IN THE SHORT RUN in support of the common good. Maybe I should be committed! ;)
Missing option.
Buy shares. It goes up. It goes down. Market crashes, it goes down more. Buy more at fire sale prices. It goes up slowly.
Remember, buy low, sell high. You may have to wait for the high and resist selling in a panic.
When people were getting out of the market, I got in.
The truth shall set you free!
There was a story recently about a design for Apple's new HQ: a sleek, low, circular building that blends into the landscape.
This news suggests a different shape for the building: a cube. See if they're up to 3 cubic acres of money yet.
Except that Apple and other manufacturers doing business in China have always had labor issues hanging over their heads, and the amount of cash and lack of a dividend are legitimate issues if you are an investor in apple.
culture, not a cash hoard. I'm sure the management of Apple have enough self-control not to go on a spending bender.
Apple has too many US DOLLARS, that's its problem. With 15% inflation it is insane to keep savings in that currency, they need to come up with a diversification strategy. However paying dividends to shareholders is also a very reasonable suggestion.
Too many eggs in one basket, I'd look at completely different businesses (agriculture, mining, but obviously not in US, it's too dangerous, there will be more nationalisation and more taxes and more inflation and other types of theft by government).
They definitely need to diversify out of their own bonds, which are dollar denominated though. Again - buying up some mining businesses, joint venture into energy, metals, agriculture.
15% inflation? What are you talking about?
Use the cash pile and buy back a majority of the outstanding share capital.
That way they return money to their investors and also ensure that no one can buy Apple out.
WTF? I hear you say....
The cash in the bank is a target for a buyout.
The 'buyer' could arrange to borrow that amount for a short time just to complete the purchase.
When Compaq took over Dec, Dec had $2B+ in the bank. Compaq was able to borrow that amount to complete the purchase on the understanding the the loan would be repaid as soon as the sale went through. Compaq had to stump a whole lot less that the $5B agree price simply because of the cash in the bank that Dec had.
The same goes for Apple.
I know that it would take someone with a great deal of balls to put a deal to buy out Apple together. $98B is more than the GDP of most countries in the world.
A private apple would not have Journo's pouring over its results. That is worth a lot of $$$$$
just my 2c...
They should not, under any circumstance, reduce cash reserves at this point. Re-establishing a dividend might make sense, but not an excessive one, and not as a means of managing capital.
Do you know why it took a year for competitors to bring out a real iPad competitor? It wasn't because Apple had much better tech, or because the others didn't have the prototypes - it was because no one could order parts. Before Apple launched the iPad, they bought up so much of the manufacturing capacity for key components - screens, especially - there was no way that Samsung could contract enough suppliers to bring a competitor to market.
Doing this takes a lot of capital. If they're talking about reducing operating capital, that tells me they don't have a "Next Big Thing" that they're planning on launching like they did the iPhone and iPad. That means drastically lower long-term growth.
Learn about Photography Basics.
I am talking about real inflation, the real money printing that causes it and the increase of prices that is coming to USA due to it, though it was able to severely delay that by exporting all of that inflation (specifically because the printed money leaves the country to buy foreign goods, where it is accumulated).
Real inflation, the kind of inflation that should have been used as deflater to the fake GDP numbers (GDP has been shrinking in USA for over 20 years, not growing, and in all cases, GDP is 70% spending of imported goods, and there are bail outs and military spending there too). Real inflation, which is the real tax on everybody holding US denominated assets.
Real inflation, the way it was calculated during Nixon, when simple 4% was enough for the gov't to set wage and price controls (misguidedly, as all economic and fiscal things gov'ts do). It was calculated without substitutions and hedonics, without reverse engineering the numbers to fit the narrative.
Or real inflation as calculated from rise of commodity prices (and no, it's not 'speculation', that's a cop out for the gov't inflating its money, buying its own debt, there are always 2 people in each transaction - one buy, one selling).
Real inflation, which does not need to see increase in wages, that's Keynesian nonsense. Wages don't increase because there is nothing manufactured.
You can't handle the truth.
Oy, spoken like a true jealous journalist who thinks companies should exist for sole the benefit of supplying healthcare and retirement benefits to its employees. Granted, one shouldn't spend money simply to take out the competition. Apple tends to buy companies that add a lot of value to its business compared to the money spent.
By some estimates, bringing the cash home today would eat up to 50% of the cash in taxes due when all is said and done. However, even if it's the 27% that was just proposed by Obama you are still talking about $10-20B of that cash disappearing as far as Apple is concerned. Same with Cisco. Until we give them a way to bring the money back cheaply it isn't going to happen. As for those that argue against this because of the apparently loss in revenue to the IRS in letting this happen, would you rather have the money sitting in a bank account in Ireland/Geneva/wherever, or in the bank accounts of, or spent by domestic investors.
I hope they use that money to further stifle innovation. All these technological novelties and the accompanying technobabble are growing over my head.
If Pandora's box is destined to be opened, *I* want to be the one to open it.
Funny how when liberals have mounds of cash they don't follow through with their rhetoric. Yes, I would be willing to bet Apple is predominantly liberal/Democrat. How about giving some bonuses/raises and better working conditions to the Chinese workers in sweatshops? How about bringing some manufacturing jobs home? Think of the children!
Of course so called "conservatives" an be hypocritical too, but I had to just point this out.
Apple should invest that money in plant, education, and working training here in the US. It's a shame they don't care enough about America to make us a better place. Keep your dividends and sit on your cash pile. Wait until people figure this out...
Yeah, it's really burning a hole in apples pocket. I mean, they are buying companies left and right......
Not
Why do "market analysts" seem to always be completely wrong about everything? Look at their records? Are they correct most of the time? No. Then why the hell do we have to keep listening to them say things in regards to what a company should do?
If anything, I'd like to see apple invest several billion into their new campus. Maybe also put a billion back into making sure its suppliers are actually following FLA guidelines. There are a lot of things Apple can do, but it does not need to give out a dividend. No one has any right to tell the most successful company in the united states how to do business, especially some fucking market analyst.
It's either on the beat or off the beat, it's that easy.
I moderate therefore I rule!
--
Wow, you're bad at investing.
That excess cash was built upon slave labour in China.
Let's not trivialize their suffering for your shiny gadgets.
Maybe they should invest some of that money back in the
country that made Apple and return some of that technology
back. Just MHO, that's all...
Donate a billion or so to NASA to keep deep space exploration going.
Undetectable Steganography? Yep, there's an app fo
Of course they should pay a dividend. That's what companies are for. The value of a stock is the present value of all future dividends. That's classic Graham and Dodd, and Warren Buffet. Stock buybacks mostly benefit executives with stock options. Most stock option / stock buyback programs don't reduce the net amount of stock outstanding. Yes, dividends are taxed. So?
The trouble with acquisitions is that buying a company with lower margins devalues the stock. Apple has incredibly high margins for a manufacturer, and they will have a tough time finding someone to acquire with better margins. Of course, Apple really isn't a manufacturer; that's all outsourced. Apple's "manufacturing" acquisitions in semiconductors, Anobit, Intrinsity, and PA Semi were all "fabless" companies. They did design, not manufacturing.
Google has a worse problem. Google stock peaked in 2007, so they're no longer a growth company and should be paying a dividend. Instead, they keep trying to expand into new areas, and not making money in them. 96% of revenue is still from ads.
they want the most profit for their investment. if the company stops producing massive earnings based on its products/innovation/whatever, then they will gut it and sell it just like a used car. or just like HP.
sometimes they will skip that whole 'stops producing massive earnings' thing, and just go right to the gutting, because personally it can benefit a few people a great deal to throw a company down the toilet in order to pay out big bonuses and get rid of liabilities. see Kerr-McGee / Tronox or hundreds of other examples. (Blue Star airlines anyone?)
for Jobs, the profit was a means to an end, this vision of technology. for shareholders, the profit is the end. they simply do not care. and i can promise you that there are hedge funders invested in every company on this planet, but also they own bonds of the company.
the value of the stock is the labor extracted from slaves in china. if they were payed proper wages, then they would be able to buy imports from the united states and everyones living standards would raise.
instead we send it all to the 1%, who spend it on cocaine and Dubai prostitutes. yay progress.
Here's an idea. Donate money to find a for cure pancreatic cancer. Greedy bastards.
Doesn't it seem silly to slaughter the goose that killed the golden egg? Doesn't it seem just as silly to just bleed it a little?
If shareholders want to get paid, they can sell their stock. But relying on dividends is nothing more than letting casino players leech off a company's hard work, welfare for capitalists. If you were an employee and had the temerity to ask for a raise because the company was doing do well, the same capitalists (ironically enough, though it shouldn't be ironic at all) would be so far up your ass for being a leech. If you were a taxpayer who wanted your taxes to go to services for the less well-to-do citizens, the same people would (and do) scream to the rafters about what a leech you are. How are dividends any different? Shareholders don't contribute in any way to the success of the company, and they definitely don't deserve to leech profits out of it just because it does well. If it does well when they happened to own a piece of it, they can sell some pf their share for a profit. But this idea that they deserve a regular income stream only drains value from the company and is leeching as certainly as if they were Cadillac-driving welfare queens.
Ideally the market price is the correct price for the security based on collective wisdom.
Sellers may be selling because they think it is overvalued, but they may also be selling
because they need the cash. Like to pay tuition.
"you've got too much money - don't invest it, give it to your - poor, poor - shareholders instead." *facepalm*
No, because you get to keep the dividend and use it to buy more stock if you prefer.
this.
as now apple stock is just paper(bits). you're not going to get more of it without using cash out of your own pocket to drive it up, and up. and up. if there is absolutely no expectancy of them EVER paying a dividend, what does the public stock have to do with _anything_?(there's no voting power, AND they don't tell shareholders shit about what they're up to) it could just as well be a casino game disconnected from everything, since if apples yearly profits make no difference to the stockholders anyways you could argue that the stock would go up even if they didn't make any money.
world was created 5 seconds before this post as it is.
"That's because too much cash often burns a hole in managers' pockets, and they end up doing a poor job of investing that cash—engaging instead in foolish pursuits like empire building."
Siri, PA Semi... appear to have been wise purchases. All of these (purchases/acquisitions since 2008) seem to have, for the most part, worked out well. (not counting the last 3 since it's too early). 2-3 billion.. of almost 100 in the bank. they could have bought those companies with the interest.
April 24, 2008 P.A. Semi Semiconductors United States US$278,000,000 [31] Apple A4, A5 (SoC)
July 7, 2009 Placebase Maps United States — [32] Maps
December 6, 2009 Lala.com Music streaming United States US$17,000,000 [33] iCloud, iTunes Match
January 5, 2010 Quattro Wireless Mobile advertising United States US$275,000,000 [34] iAds
April 27, 2010 Intrinsity Semiconductors United States US$121,000,000 [35] Apple A5 (SoC)
April 27, 2010 Siri Software United States — [36] Siri
July 14, 2010 Poly9 Web-based mapping Canada — [37] Maps
September 20, 2010 Polar Rose Face-Recognition Sweden US$29,000,000 [38] iPhone software (camera)
September 14, 2010 IMSense High Dynamic Range Photography United Kingdom — [39] iPhone software (camera)
August 1, 2011 C3 Technologies 3D Mapping Sweden US$267,000,000 [40] Maps
December 20, 2011 Anobit Flash Memory Israel US$390,000,000 [41] iPhones and iPads
February 23, 2012 Chomp App-search software United States US$50,000,000 [42]
I'll bet a significant chunk of that money would be well spent tooling OTHER manufacturers facilities to make Apple parts. Spend the money to upgrade a factory to make the seamless glass panes they used in the NYC store (for example) and they get really good prices on that glass for another construction project.. the new HQ.. which apparently has all glass exterior walls (and no right angles).
spend the money to upgrade the CNC machines to tool unibody chassis, and no other vendor can use that facility (because Apple bought exclusivity). OR they bought all the machines (since it literally takes HOURS to cut a chasis out of a billet http://plasticsnews.com/china/english/chinablog/2011/12/apple_turns_to_new_materials.html)
Corning shelved Gorilla glass because they couldn't find a market for it. along comes Jobs... next thing you know, Corning is making Gorilla glass screens for everyone. I don't think Apple paid to re-tool... but probably gauranteed a shit ton of units ordered to get them to start making Gorilla glass in mass.
you can complain all you want about their marketing, their products, whatever. but you CANNOT, in any way, argue that their business model isn't ROCK SOLID.
as the saying goes.. if it ain't broke....
Name a currency they should be using. The way the EU is throwing around money, they are going to inflate at a rate no first world country has seen in years. The Yuan is already hitting high inflation levels and will likely get worse.
Disclaimer: My country uses the Euro.
If Apple can take the monumental task of providing K-College books for free, I'm sure in the future we wouldn't mind getting Apple products to run them on. Apple has always been pro-education with the Apples in the classroom projects which got my K-12 schools computers. Why not go ahead and do the real revolution in our midst. By providing free K-College books, you end up saving people much more money on books than they spend on your computers. Sorry, this is my plea to everyone, lets provide K-College books in freely copied form, so the entire world can get an education.
God spoke to me
The value of a stock is is the anticipated future benefits from owning that stock. Strippers sell lap dances based upon the same sort of hope: That they'll grab their coat and go home with the poor sucker. Maybe, but just one more dance and then we'll see.
Have gnu, will travel.
You can never be too thin or too rich.
That is all.
If they could Apple should buy a majority share in Microsoft. Then close down the operating system division, killing support for it. Keep the good products, like Office and Visual Studio. Merge the Xbox division into the AppleTV division, and then spin off or close the rest of Microsoft.
While immediately it looks like a bad move because they're sacking the company. Killing the operating system division would leave Apple's competitors in the PC market like Dell and HP out to dry. We've seen from the past that not many people want Linux, which is a shame. And this effectively leaves OSX as the only viable OS in the market. Apple would just have to make sure they have enough parts on hand to build up their production capacity to meet the demand of the PC manufacturers that no-longer have an operating system. With Apple being the only large computer manufacturer around at this time their stock would rise again after the hit of sacking Microsoft.
This would also kill most of the beige box component manufacturing as well, since most custom PCs run windows. And those customers would have to go looking for a PC eventually and the only real game in town would be the small time manufacturers using Linux, or Apple.
If they also make Office and Visual Studio OSX only products that will start moving corporate customers to their Macs, and iPads. BSD is already a server class operating system, and OSX is pretty darn close to it so they could move back into servers at this time, hell they'll have a monopoly on PCs, and Windows Server 20XX wouldn't be on the market, and the current server products wouldn't be supported.
But this move would probably be seen as a monopolistic move and hopefully killed by the SEC. And Microsoft Market Cap is 264 billion and there's no way for Apple to get a majority share in it. But that's a move I wouldn't put past Apple. Actually I wouldn't put it past any board of directors if they could pull it off. They'd dump their Microsoft stock first of course, its only insider trading if you get caught. A few bribes... campaign contributions, will get them past the SEC.
Software Engineer & Writer of Military Science Fiction and Fantasy Blog: petermwright.com Twitter: WrightPeterM
I didn't say currency, AFAIC all paper is only good for one purpose, and they make better toilet paper for that.
You can't handle the truth.
Cancer is not really important in the grand scheme of things, Better to put some serious money into conserving biodiversity and exploiting it for bioengineering and development of crops that can survive the climate apocalypse, and feed the hungry. I guess most people in the world don't survive long enough for cancer to be much of an issue either way, and most people spend most of their lives trying to get enough food to subsist. Free the world from hunger and you suddenly have 6 billion new consumers who can afford to buy things other than just food.
Korma: Good
That'll fix em.
Why not buy RIM?
I know (insert blackberry hate here), etc. But owning a proper enterprise device management suite like BES would go a long way to getting iphones & ipads into corporate users hands.
But as the IT guys who has to support both blackberries and iphones, maybe that's just my personal dream.
What you are talking about is the latest trend in investment theory - behavioral economics.
The rational person makes their decision on current available information to maximize returns at the lowest risk. They should not care about the past (sunk costs, can't be changed. Mind you, I am not talking about reviewing past choices to gain deeper and better wisdom) and know the uncertainty of investing in the future.
However, people are emotional. They tend to hold on to losers too long, tend to place bigger bets, etc.
A economic noble prize winner who was heavy into investment theory (I think it was either Black or Merton) tended to keep a large chunk of his money in boring bond and index funds so he would not suffer the regret of making a "bad" choice. "Bad" in the sense of having made the right choice with the current information only to be surprised by the future.
I could use $8000 for a new commuting motorcycle. fatbuckel2@gmail.com Let me know.
Seeing all the fanbois here trying to "rationalize" slave labour makes me want to puke. As dirty as Apple's business practices might be (closed formats, deliberate lock-in, moving all their jobs abroad, slave labor, river pollution, etc.), I have to say seeing that money in Apple's bank account somehow feels less wrong than seeing it in the hands of the people who gave it to them, knowing perfectly well what was (and is) going on behind the scenes. At least there's a kind of greedy and callous honesty about it.
I couldn't care less what Apple does with their money; it can't be worse than what their clients did with it.
Let me try to use simple words. Dividends do not fall from the sky, they're money that's taken out of the company, which is is reflected in the drop of the stock price once it goes ex-dividend.
So I'm getting some money, and losing the same amount of value in the stock. Well, actually, losing a bit more, as I had to pay commissions to buy the stock.
So we're robbing Peter to pay Paul. Where's the sense in this?
If I wanted money, I could, at any time, sell some of my stock. I'd get to sell it when I wanted, the amount I wanted, and keep as much stock as I wanted. With dividends i don't get any one of those three freedoms.
Why not use that money to build up their own infrastructure. It's a known fact that Siri has lost some of it's usefulness as more users started using the service. Also iCloud is known to be running on leased Azure and AWS. I know they have built a datacenter in North Carolina and going to be building one in Oregon, but seems to me that their Cloud infrastructure is somewhat inadequate for where their technology may be headed (Siri, streaming media, etc.)
Now that's a problem I would like to have...
Shareholders aren't killing the goose or even bleeding it a little, they just want a share of the money the farmer gets when he sells the golden egg. See, they gave the farmer the money to raise the goose in return for a share of the profits the farmer would someday earn in the golden egg business. Now that the farmer is making lots and lots of money, the shareholders can expect a return on their investment. As part owners of the goose, they have a right to it.
Seems to be the best way to stop politicians threatening you is if you can foreclose on them.
"I think at some point, you've made enough money..."
Can anybody who's a real lawyer say anything about perpetuities?
I thought I read about a case where a huge sum of money was to keep accruing interest forever.
The state disallowed it because they didn't want to allow the creation of a monster.
Aside from legal aspects, if Apple wanted, couldn't it create a fund which would eventually dwarf all other financial entities on Earth? And even own everything? I mean, if they don't give out a dividend, that's where it's going eventually anyway.
I'm not a lawyer, but I play one on the Internet. Blog
You seem to forget that the US has many reciprocal arrangement with counties all over the world regarding taxes.
Apple may well earn some money in Europe. They pay tax on these earnings (like Microsoft, Adobe etc) to the Government in Dublin (who has given them very generous tax breaks...). The tax paid offsets the amount of $$$ the owe Uncle Sam.
At least Apple is not registered in Nevada like Microsoft. NV has no corporate taxes..... ergo MS gets away with billions.
Apple could bring monies held overseas to the US should they need to do so. This is regarded as 'Tax Paid. monies and no further levy would be imposed by the folks in DC.
Use that money to pay your employees.
"MIT betrayed all of its basic principles."
Not suggesting that this would benefit apple. But for me what's preventing me from buying apple has always been cost. Secondary has been the closed ecosystem. Really wish they took the lead in the industry and made appstores interoperable. Just more of the same. Can't help but relate it to the battle for the desktop that they lost to windows back in the day.
Mark Hulbert owns Apple shares and is trying to push their value higher so he can sell.
I am talking about real inflation, the real money printing that causes it and the increase of prices that is coming to USA due to it, though it was able to severely delay that by exporting all of that inflation (specifically because the printed money leaves the country to buy foreign goods, where it is accumulated).
Real inflation, the kind of inflation that should have been used as deflater to the fake GDP numbers (GDP has been shrinking in USA for over 20 years, not growing, and in all cases, GDP is 70% spending of imported goods, and there are bail outs and military spending there too). Real inflation, which is the real tax on everybody holding US denominated assets.
Real inflation, the way it was calculated during Nixon, when simple 4% was enough for the gov't to set wage and price controls (misguidedly, as all economic and fiscal things gov'ts do). It was calculated without substitutions and hedonics, without reverse engineering the numbers to fit the narrative.
Or real inflation as calculated from rise of commodity prices (and no, it's not 'speculation', that's a cop out for the gov't inflating its money, buying its own debt, there are always 2 people in each transaction - one buy, one selling).
Real inflation, which does not need to see increase in wages, that's Keynesian nonsense. Wages don't increase because there is nothing manufactured.
Are you familiar with the concept of relative value? You know, the underpinning of modern economics?
You are talking about 2 things here.
First, you talk about control. The rule of thumb is that control is worth about a 20% premium.
This is separate from the short term items you are talking about. When somebody gains more then 10% it indicates that they want to buy the whole company or take control of it to move it in a new direction. The price is reacting to the possible change in direction of the company. Or, when somebody dumps a huge amount of stock. In this case there is a short term supply / demand imbalance that can cause to the stock to fall.
If you look more carefully how it actually looks. In fact, they have around 10B in actual cash (or cash equivalents), around 15-20B in what they call "short term marketable securities" and the rest (~70B) in something they call "long term marketable securities". Since they crossed 30B, virtually all of their surplus goes into that third category. What do they mean by "cash equivalents" ? Do, say, treasuries count as cash equivalents or marketable securities ? The question that is most interesting to me is: how good are these "long term marketable securities" ?
One option would be some long term national bonds or other very liquid stuff and this would be fine. If they'd need this cash at some point, they'd be able to use it in an instant.
Second option is that these are some crap quality, illiquid stuff they buy from financial institutions, having their stock prices pumped and all government beurocrats bought in exchange. In other words - they feed Wall Street institutions with real money (as opposed to some illiquid derivative instruments) and have their stock price pumped in exchange.
There might be more options, but fundamental question for me is that about quality of their "long term marketable securities".
Keynesian ideas to economics are what foreskin is to a Hasidic Jew.
However I am very well versed in relative value of things - did you know that in gold and silver oil prices are not only staying steady, but are falling somewhat? All that while paper currencies of the world are being destroyed, I might add.
You can't handle the truth.
They would not, in any terms, give away what they develop on their own.
Grand Central Dispatch
Zeroconf (bonjour)
LLVM
The list goes on and on... Apple continues very much to give away a lot of things as open source.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
...as an incentive to either pay out dividends or to put the capital to work.
And not that businesses shouldn't have the ability to build cash reserves, but US corporations are sitting on something like $2 trillion in assets. Some have so much cash that banks are charging steep fees to handle it.
At some multiple of earnings, these cash hoards are actually a drag on the economy. For one, they represent underutilized capital -- generally a firm's cash is tucked into short-term securities for liquidity, meaning the cash has a poor rate of return.
Paying dividends is a mechanism not only to keep granny Vanderbilt in her upper east side mansion, but to distribute excess capital to firms owners (shareholders) so that they may re-invest it or put it to direct use in the economy (ie, spending it).
Instead, management is allowed to hoard it, locking it away from productive use or tempting them to use it for self-serving purposes, such as "stock buybacks" where firms with stagnant share prices and/or earnings buy their own stock, essentially shrinking the number of outstanding shares. The idea is to drive up the price of the shares so that management, compensated with stock grants, can sell them at a premium.
It astonishes me that boards let this happen -- it's almost patently a way to pay themselves a dividend instead of the regular shareholders, in addition to perverting the incentive share grants were supposed to provide (ie, grow the company and increase its value so that the share grants appreciate).
But this is the new world we live in, where the wealthy and powerful use capitalism as a banner for their own encrichment despite grossly perverting it in practice.
After the dividend is paid, you still own the same fraction of the company. Ownership of the company is measured in shares, not dollars. Paying a dividend amounts to taking a dollar bill out of the company cash register and putting it in your pocket - it doesn't decrease the company's ability to function in any way. It limits the company's ability to expand or grow, but in many, many cases, unlimited growth is not desirable. Apple, for example, could use its pile of cash to expand its production facilities and make, say 500,000,000 iPads, but everyone knows that would be a bad idea. They could buy both HP and Dell, which would give them a huge share of the market, but god does that sound like a bad idea.
They can transfer that pile of cash out of their bank and into yours without paying any brokers. If you want to extract the value in your share ownership of the company, you do have to pay a broker.
If Apple (or any other companies board of directors) thinks they'll be getting a sweater deal than 15%, they are nuts.
If Apple promised to return the cash pile to the U.S. if the U.S. lowered dividend taxation to 5% for the country, why would that not be appealing for the government to enact...
That's even without buying congressmen outright, just for the promise of the government receiving that tax income which it craves like a meth addict after a seven day cleansing.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Isn't it kind of silly to not take any of the profit out of the company you own once it's mature and has all the money it needs for operations
So who says Apple has reached "maturity"?
The fact is they are only at the entry stage of very huge markets. Tablet promise to become primary computing devices for most people. Apple only has a single-digit percentage of the entire phone market. Apple has been making motions towards figuring out how to solve TV in the digital age the same way they figured out a path for the music industry into digital....
Apple has more than they need just for operations but as a shareholder I want to give them full reign to dive into whatever new areas they think they can improve.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
should i invest in company that tries to pay fair wages and make employees feel good/have nice life and earns just 25%/year profit
Fine, you just described Apple except Apple has a higher margin.
should i invest in company that takes as much advantage of its workers and uses them as slaves, uses child labour, with some of them even killing themselves as consequence, but earning 100%+ ROI per year?
Sounds like a pretty dodgy company, exactly why I don't buy Android phones as they are made under the conditions you describe.
In fact I have come to realize that the only ethical choice in buying consumer electronics these days is to buy Apple products since they are the only company saying there is a problem in China and trying to address it. So when it came time to buy a wireless router I bought an airport instead of a lynksys, even though it cost a little more...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Doesn't make any sense at all by your logic.
My prediction is that you are about to make a pretty funny response.
Your move, genius.
Yes, burn through some of that pork!
Reward your shareholders, and invest in new technology in areas your not already a player. Apple has shown it's quite adept at penetrating new markets and it seems that if money is no object, it can afford to push into new areas and expand it's reach in the areas it is already a player.
But if anything giving back some of this money, investing it in R&D and other risky ventures will help Apple "Stay hungry, Stay foolish".
Perhaps it sounds strange but... Would it be a good idea to give it back to the people that "worked" it? I mean, many engineers, assembly lines, etc, worked hard to make that money. It seems Apple was giving them back a small part of the earnings.
The developers are the ones who have helped Apple get where it is by developing apps for their iOS platforms, so why not reduce the 30% cut they take from each app sale to at least 25% or even 20%.
You can never have too much money. Now that their idea man Steve Jobs is gone, they're probably going to have to ramp up on R&D. They'll probably try TV next, but there is still so much room to innovate in new markets.
For starters, Apple could revolutionize the kitchen. Or the car. There is so much opportunity, and entering new markets cost money. Look how much the telcos have to pay for infrastructure. Or Tesla pays for vehicle manufacturing.
Apple, save your money, watch some Sci-Fi movies, focus on innovating what comes next, and you'll have the cash to make it happen.
All that while paper currencies of the world are being destroyed, I might add.
But paper currencies are inherently worthless in the first place. Does it really matter that something which is worthless gets destroyed?
In fact, why not help get rid of it? Send any paper currencies you have my way. I'll er... dispose of them for you. I'll even do it for free!
Not quite sure I quite understand the concept of $98bn in terms of Apple. How may lawyer-hours is that? Or can you put it in terms of simultaneous court-cases?
Phillip.
Property for sale in Nice, France
In fact, why not help get rid of it? Send any paper currencies you have my way. I'll er... dispose of them for you. I'll even do it for free!
- I have only a few notes, no paper, it's not worth the postage to send it.
You can't handle the truth.
If a company doesn't pay dividends, the stock is essentially worthless. You may make money on it by selling it, but someone is eventually going to lose money on it, that is a fact. Stock buying and selling is essentially a 0 sum game in this respect. So the only way to get actual value from the company that is producing the goods is through a dividend. If I started ACMECORP, which produces absolutely nothing, and had my friend buy up 5 shares of the stock of ACMECORP for a million dollars, then that will make ACMECORP's stock price jump to 200,000 a share. People would love to get a piece of that action, but ACMECORP still doesn't produce anything. But we keep this going, and even though ACMECORP never produces a product, and never generates any profit, it still has a high stock price. This doesn't make my friend's investment worth anything, though. If I paid dividends then it could be worth something, because owning the stock produces something for the owner.
Why aren't dividends mandatory? Or rather, shareholder-controlled?
The sole proprietor of a company gets 100% of its profits; and then decides how much of that he wants to reinvest back in the company.
Why should it be any different for a company owned by several parties? Each party gets their share of the company's profits; and then may reinvest some or all of that back in the company if they like (increasing their stake in the company, naturally).
In other words, why aren't all companies mandated to pay their shareholders dividends, and those shareholders in turn able to buy new stock with those dividends if they want to reinvest those profits?
-Forrest Cameranesi, Geek of all Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
There's no such thing as too much money. This kind of thinking always leads to trouble and is short sighted. Best relatively recent example - The former US budget surplus. George W Bush thought the same thing that we had way too much money on-hand, so he slashed taxes, installed Medicare part D, and . . . uhm . . . other military things in the middle east somewhere. Steve Jobs' ultimate genius was his indifference toward shareholder opinion and focus on cash generated from operations (an example that all corporations should be following to avoid more booms and busts - the economy is something that needs to be managed, not let run amok.) It's the begining of the end of Apple's reign, it'll be in trouble again in 6 years.
> If a company doesn't pay dividends, the stock is essentially worthless.
In case you haven't noticed, casinos also always make money overall, but this doesn't stop people from gambling. This is just a fact of how Wall Street works, and it doesn't deter anybody from gambling/investing.
Warren Buffett has gone on record saying his company will never pay a dividend, but that hasn't stopped it's stock market price from increasing.
Dividends are not why people buy stock.
If they have amassed too much money why doesn't Apple pay its employees? You know, the ones who built all of their products for wages well below the US minimum? They made all that money by way of exploitation - outsourcing jobs so they could pay workers less. Obviously that strategy worked very, very well.
This is a hacked account, for which the owner can not be held responsible.
The stock price of a company has at least some relationship to the value of the company
While I agree that the price won't ever fall below the value of a company broken down and liquidated, I think that your assumption that stock price is in some way tied to company value is inherently wrong. If there's no dividend, then there's really -no- connection between a company's performance and stock price. It's 100% based on pure supply and demand. There's no inherent value to a share of stock with no returns on it. The stock market is, by and large, one large ponzi scheme that would collapse if a large part of the population wised up, and put their money somewhere where they can get an actual return on their money, as opposed to gambling that some day, somebody will be willing to pay more money for the same worthless piece of paper.
I divested myself of non-dividend paying equity investments years ago, and now only buy loans or dividend paying equity so that I can sleep soundly at night.
I don't respond to AC's.
As long as you have enough to keep the company afloat and profitable you're free to invest in other areas that don't necessarily need to be profitable. In other words you can take on all sorts of really cool things that most people, companies, or governments wont invest it because they may not necessarily be profitable at first.
That's the way Google works. Their core finances are based around their search engine and ad revenue. All the other projects on the side are just frills they added. That's why they can offer so many services for free, usually without any sort of ads or other obtrusive 'pay me' things and continue to develop them without them needing to be profitable.
The very fact that Apple is sitting on top of such a huge pile of money is a testament to how small their ambitions are. Steve Jobs somehow lifted the entire thing upon his shoulders and moved the world to buy fad based items that are so not worth the 300% price increase. Other then that there isn't a lot to Apple, they don't offer any sort of major world changing ideas or software (as odd as that sounds). They don't really innovate either. Nothing really comes or goes out of the company that has any lasting impact outside of fads.
I really don't understand how the company got so big in the first place if they have no real direction outside of making trendy devices that remain largely the same from model to model. I guess Steve Jobs really had a world altering engine built into himself. It's really honestly quite sad. That is a LOT of money and I could think of hundreds of different things they should be doing with it other then sitting on it...
You could start with the altruistic option. Instead of paying Chinese workers more, move the fing jobs back to America where we actually purchase your devices.
"Then close down the operating system division, killing support for it."
logistically and politically impossible. ...pretty sure if you bought MS you'd have to honor your support contracts. Don't forget, XP isn't going to be end of lifed for 2 more years. and I'm pretty sure 95% of the corporate world would have something to say if you suddenly took windows (support for...) away. the government also uses windows and office so you'd have to answer to them too.
face it.. companies like MS have to exist. if Apple owned 95% of the market, they'd be the same way.
If Marketwatch recommends that a company do something, the company is pretty much guaranteed to succeed by doing everything except that something.
By the taping of my glasses, something geeky this way passes
Oh, I know, how about fork some $ to improve the working condition of the child slaves that assemble Apple products?
I'm pretty sure it's become an internet rule that anyone who starts their reply with "this" generally has nothing worthwhile to say.
You've certainly helped advance that hypothesis, although to be charitable, you could argue your position. You could argue anything, though...
It's exactly the opposite, actually. When you buy stock, and later sell it off for profit, that is leeching off someone's work. There's absolutely no benefit to the company, or to economy as a whole, from that stock changing hands - the company has already got its investment money during IPO, and for everyone else it's just a hot potato game.
Dividend, on the other hand, encourages real long-term investment - giving money to the company early on, when their stocks are cheap but their future success is non-obvious, so that if they do succeed, you get a decent return off their profits - which, hopefully, you then use to invest into another new business etc. It makes people actually look close at what the company does and how it does it, rather than getting all jumpy on every bump in the stock price.
I think it's interesting that no one has bothered to mention why they think Steve Jobs thought it was important to have huge cash reserves.
Aside from the fact that having that money allows you to make big investments without resorting to a bank loan (yes, big corporations get bank loans), Steve was acutely aware of how fragile Apple's existence was. The simple chain of a few bad decisions could send the company on a downward spiral much like the last one in the 1992-1997 era. If anyone recalls, Apple had about 7 billion in the bank at the beginning of that downturn and proceeded to bleed all that money out over the next 5 years while still selling products that were so popular they were backordered for months. Yes, their supply chain was a wreck back then, but they managed to bleed off all that money.
Steve knew that Apple shipping one or two failure products could put the company into a tailspin that would take a while, and cash, to recover from. He also knew that the computer industry goes through boom and bust cycles and you need money to weather those. And you can't predict them. Contrary to what proponents of the "Long Now" and "End of scarcity" economics say, we're not (nor will we probably ever be) in a world of plenty, and Apple needs to be prepared for that.
So, if it took 7 billion for Apple to slide through 5 years of mismanagement and lack of vision, how much will it take for it to for them get through the next one? Apple's much bigger now, and everything in the world is more expensive now. If Tim Cook does this, it'll be the beginning of the end of the Apple we all know and love (and hate). Whether or not that's a good thing or not is completely different discussion.
And that's my .02, which is nowhere near the $58 billion Apple has.
Reeses
muuhahahah
... the world has too many posers that have to keep up with the joneses and will pay anything for the latest igadget.
I seriously believe that Apple should use that stock pile to start buying back their own stock to get out from under the thumbs of people like this. Apple doesn't need shareholders anymore, at least for now. Of course, the iPad is about to face insanely hard competition from Microsoft because Microsoft finally "got it right" with Windows 8... I own 3 iPads, 4 iPhones, iPods, Mac Minis etc... but in reality, I also own a Windows 8 tablet and it's about a million times better than the iPad in every way but battery life. Find a hardware manufacturer for Windows 8 tablets that can "Do cool" and Apple will have a struggle ahead. Where Apple will spend years trying to get Office programs and many other tools in place for iOS, Microsoft is coming out with those things ready to role. Add to that that there really isn't anything that will be truly iOS specific (as most cool apps are Android too these days and Windows 8 runs that too) and Apple will need to start worrying. In fact, the biggest thing that will hurt Apple is iTunes for Windows since it allows users to take pretty much everything but their books and apps to the Windows tablets and you can always get more apps and if you bought a book using iBooks... well you can probably live without it anyway.
So, the best thing right now is that instead of pushing Apple to do all kinds of stupid things like changing there ways because Jobs is dead and can't stop it anymore, Apple will need to start investing insanely heavily over the next few years to make up for the fact that starting February 29th, they are no longer the only game in town. (Yes, I know Android is out there, I've used it, it's trying to catch up to iOS and iOS will soon need to try and catch up to Windows 8, so it's way behind).
So in my opinion, the best thing to do is to run the company and quick dicking around with all this stupid crap. Let Apple run Apple, they're pretty good at it. Screw the people who all want to change it for the sake of being special.
A stock suggests that you own a portion of the company, at best it gives you a vote in the future of the company. For the most part, it's more accurate to see the stock as an IOU. But the company has no responsibility to ever actually pay the IOU, but you can sell the IOU to other people willing to accept the risk in hopes of reward.
If the company has control over enough of its own shares, then the vote you have a right to as a "share holder" is meaningless as well. This is why, in order to go public, it is necessary for the primary share holders to hold less than a given percentage of the stocks. This makes it so that the people buying the shares could in theory have a real say in the future of the company. This process usually ends up moving control from a few major share holders to a large handful of shareholders that will vote pretty much always with the original major shareholders which again renders the stock market shareholder's vote meaningless again.
So, it's best to look at the IOU as a gambling voucher, like a casino chip that can't ever be cashed in but can be sold to other gamblers.
They probably should spend some money curing cancer but it wont cost 50 billion or even 1 billion.
Their prices are so high that I can't even afford their overpriced shit products.
The only thing they make that is worth using is iTunes and even that has issues.
As well as being an obnoxious metaphor verging on bigotry, your analogy is also deeply ignorant. Do you know what a foreskin is to a Hasidic Jew? Are you a Hasidic Jew? If not, how about not talking about shit you know fuck all about? I know that would break a habit of a lifetime, at least here on Slashdot, but if you can't manage that, could you at least keep the claptrap to economics rather than spewing out into religion?
As the Kotzker says: "All that is thought should not be said..."
Number of Foxconn employees: 1m
For just $1b you can give them each $1k. Seems like a decent bonus and it will buy some good PR. For $10b they could each get $10k - and Apple would still have $88b left.
"When information is power, privacy is freedom" - Jah-Wren Ryel
I didn't even have to live in Israel for a year to answer this question, but I did live there in 93.
A Hasidic Jew needs to lose that part of body, otherwise it's not a perfect union between him and his god, same with economics - the person studying it needs to lose that part of nonsense, that Keynesian ideas present, otherwise he will not achieve the understanding, and it's not bigotry just because the word 'Jew' is thrown around.
You can't handle the truth.
The phrase "perfect union" is from the preamble to the US Constitution. It has nothing to do with Judaism. The act of milah is a token of a covenant. A token -- not the covenant itself. But never mind, you tried, albeit not particularly effectively.
The Hasidism reference was, I take it, just for extra fun, not because you actually meant anything by it? What with milah being practised by just about every Jewish community, Hasidic, misnogid, frum, Masorti, Reform or Liberal.
Who knows what you were doing in Israel in 93. I hope you weren't in yeshiva. If you were, you didn't listen very hard. Still don't, actually: I said "obnoxious metaphor verging on bigotry" not simply "bigotry". I chose my words with care, which you patently did not.
My mother's mother was Jewish, makes me of jewish descent, but as an atheist I don't care about religion, and obviously don't want to have parts of my body gobbled up by made up ghosts (AFAIC).
But yes, it's a token. And saying "Hasidic" was just to make a little stronger of a point. I did read a little while back that a former head of security service in Israel said that Haredim were more of a threat to Israel than Iran based on their ultra-orthodox behaviour within the country. I have a number of relatives living there, so I prefer Israel to stay safe, including from Haredim.
A year I spent in Israel I studied and worked, but no yeshiva for me, just learning some other culture.
You can't handle the truth.
Honestly, you're better when you stick to economics. I find that mindboggling, but true.
Haredim does not mean the same as Hasidim.
It does not mean the same thing, but people recognise the word Hasidic easier than Haredi I bet.
You can't handle the truth.
well, geniuses, and how about to give the people in Foxconn factories a more decent pay? you are overflooded with cash, and a person working in factory makes 220 USD per month... go figure!
"Apple has too much money that could/should be lining my wallet and the wallets of our shareholders."
Why not invest in more R&D or acquire some more additional businesses which complement your products?
But whatever you do Tim, please do not spend that extra cash on more patent lawyers.
Just give it to me!
If there's so much left over, it's probably time to give back to the thousands of people in the low-income jobs/factories that didn't get much out of the success of the last years but worked just as hard as everyone at infinite loop....
but as an atheist I
That is a fucking total lie if ever I've seen one. You, sir, are most definitely not an atheist. Just because you pray to a living man instead of a holy deity does not make you an atheist any more than breathing air makes you a sentient human being.
If they were smart, they would use their capital to LOWER the prices of their products that are way too expensive!
There may be no benefit to the company but there's no detriment either. So it's not exactly leeching f you aren't extracting value *from* the company, as a leech literally does. That value comes from the next guy playing the hot potato game.
As for the value of offering dividends as part of the IPO, how do you square that with the fact that IPOs don't launch with dividends?
as an atheist I
every damned thing you write here is about your religion. you sir, are not an atheist. compared to you and the staunch observance you have for your faith, the pope is an atheist.
"that the company restore its quarterly dividend which Jobs suspended in 1995"
Jobs couldn't suspend anything at Apple in 1995.
Jobs wasn't even at Apple in 1995 to do so.
except Darwin
Oops.
KHTML^H^H^H^H^H^Hsafari
Pretty funny considering Apple has done all the webkit performance improvements KHTML is riding on. And of course, webkit is totally open source...
I will let you have the last response since ignorant people always feel the need to prove ignorance further...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
so do the koch brothers.
this is a matter for apple stockholders, who don't appear to be complaining.
i assume that you would like to spend the 'excess' on your pet project.
jk
note to the text filter king. since the early computers used teletype-like input everything was fixed pitch lc. upper case was an innovation of sophisticated composition systems until the use of the bit map display. the chicago book of style, which was used as the standard style of writing didn't comprehend case as 'yelling'. some of the tty attributes have carried over until today. try a url in caps.
jk