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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."
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?
Do you know what is a fair wage in China is? Most people only look at the wage in US dollars and immediately claim to be unfair without ever looking at what people are paid relatively in China. The wages at Foxconn plants are slightly better than average for factory workers in China. Apple pays those that work on their products more than competitors do at Foxconn.
Well, there's spam egg sausage and spam, that's not got much spam in it.
That's because Jobs didn't suspended the dividend. It was ended by Gil Amelio:
http://news.google.com/newspapers?nid=1755&dat=19960214&id=sRYcAAAAIBAJ&sjid=6HwEAAAAIBAJ&pg=3973,6289068
to keep already highly valued share prices inflated.
By P/E ratio Apple is valued less than Google, Amazon, Verizon, ATT, Oracle, LinkedIn, NetFlix. It is one of the CHEAPEST tech stocks in the markets it competes in (devices, media, mobile), even though it continues to see phenomenal growth.
Sounds like more right-wing clap-trap about the underprivileged and under-appriciated 1%. Your going to have to do better than generalities to claim that 80% of the value of a dividend would be eaten in taxes. First my understanding is that Apple only pays the difference in corporate taxes from what it pays overseas and what the US tax if all the money had been made here. So that takes a good chunk out of your 30%. Secondly long-term cap gains is 15% but that shouldn't be added on to the cost of the dividend to the shareholder, since the shareholder gets that on any dividend. I never heard of this 35% tax (80 - 30 - 15 = 35) of which you refer to for simply issuing a dividend.
I would be leery too if I were them of issuing dividends, but not for tax reasons. The principle appears to have served them well. They are probably working on some sort of optimal ratio of cash to operational costs (or some other relevant factor) to aim for and then figure out a dividend that can glide to that ratio so they don't feel the need to yank it back later when the competition starts to tighten up again.
Dividend payments thought would also engender some good will towards them. Just like when Microsoft started paying dividends the effect was seen in personal income on a national levels, an Apple dividend would help spur the US economy.
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?
1. I'd like to see evidence of working 80 hours at week. Plus Foxconn actually pays overtime for every additional hour worked; many companies in the USA don't pay anything for overtime.
2. Foxconn doesn't make anyone live in a tiny room with 20 other people. They offer accomodation in dormitories with 8 people per room, at a cost of less than 10 hours salary per month. Perfect for someone who wants to work for 3, 6 or 12 months, save as much money as possible, and return to their home village with a big pile of cash. These people are free to find other accomodation, which will cost them more.
3. There are no dangerous chemicals in use anywhere in the USA. Not anywhere. Never. Ever. Do you believe that? Shit happens, and responsible companies like Apple act when shit happens.
4. Chinese employees are free to join a union. The company even has to pay for the majority of union fees. Now it is true that you can't start a union other than the state union, but you _can_ join a union.
Think you'll find that was 1997 not 2007 he returned to Apple...