Slashdot Mirror

← Back to Stories (view on slashdot.org)

Apple To Launch Largest Stock Repurchasing Plan In History

Posted by Soulskill on from the not-sure-if-confidence-or-overconfidence dept.

An anonymous reader writes "In conjunction with its earnings report for the second quarter of 2013, Apple issued a press release announcing some major plans for its ever growing stockpile of cash. It is increasing its quarterly dividend payout to investors by 15%. What's more, the company will spend $60 billion in stock repurchases, making it in Apple's words, 'the largest single share repurchase authorization in history.'"

21 of 282 comments (clear)

  1. Dumbest idea, ever by faragon · · Score: 2, Insightful

    In my opinion, they just will burn their cash. It is inevitable: they must lower device prices, so their shares will fall. No way out.

    1. Re:Dumbest idea, ever by bloodhawk · · Score: 2, Insightful

      It isn't dumb, I don't like Apple but it is actually a smart move. They need to return shareholder value as their growth proposition going forward is uncertain or potentially even negative. The choices are return shareholder value through dividend and buybacks or watch the stock slide.

    2. Re:Dumbest idea, ever by Anonymous Coward · · Score: 5, Insightful

      Oh my. Here we go again. Apple is going out of business now like Microsoft was suppose to be for the last 15 years?
       
      If I've learned anything here I've learned that the average "geek"* doesn't have the first clue about business.
       
      * I use that term loosely anymore. The geek element certainly has waned over the last few years. I blame KDawson.

    3. Re:Dumbest idea, ever by Cinder6 · · Score: 4, Insightful

      Apple's stock has always been weird. Their P/E ratio is lower than Dell's. Doesn't make sense to me, but I'm not a finance guy.

      --
      If you can't convince them, convict them.
    4. Re:Dumbest idea, ever by Anonymous Coward · · Score: 3, Insightful

      Gotta love how apple zealots can state exactly how wide the "correct" human hand is and what the capabilities the "correct" person who might use a phone are. I guess when you are a member of a cult masquerading as a cell phone company this is exactly the "right" kind of group think to have. No room for natural variation or a difference of opinion. If you don't like it the problem is YOU and certainly not the cult of Apple.

    5. Re:Dumbest idea, ever by PixetaledPikachu · · Score: 3, Insightful

      Gotta love how apple zealots can state exactly how wide the "correct" human hand is and what the capabilities the "correct" person who might use a phone are. I guess when you are a member of a cult masquerading as a cell phone company this is exactly the "right" kind of group think to have. No room for natural variation or a difference of opinion. If you don't like it the problem is YOU and certainly not the cult of Apple.

      That's not something new. They used to claim that their display has just the perfect amount of pixels for every person on earth, since apparently everyone has the same viewing distance when looking at their phone, anywhere, at any given time

    6. Re:Dumbest idea, ever by exomondo · · Score: 4, Insightful

      2. The iPhone is the right width for the human hand.

      Because Steve Jobs told you that? Man he should have gotten into the glove business and we could have gotten rid of the silliness of having different 'sizes' and just make the correct size for the human hand.

    7. Re:Dumbest idea, ever by smash · · Score: 2, Insightful

      So you're comparing a single vendor (apple) to an entire industry (iPhone + Android - Win Mobile and others are a rounding error).

      And they're still just under 40% of the market.

      Companies in any other market would kill for a 40% market share, yet it's supposed to be the death knell?

      --
      I run: Windows, OS X, Linux, FreeBSD. Just because you have a hammer, doesn't mean everything is a nail.
    8. Re:Dumbest idea, ever by smash · · Score: 3, Insightful

      Before iPad, no tablet shipped with full colour, 3d capable GPU, motion sensor, GPS, compass and 10 hour battery life in a single device, that weighed less than anything of comparable size. To say it was merely branding successful is kinda... well.. flat out lying?

      --
      I run: Windows, OS X, Linux, FreeBSD. Just because you have a hammer, doesn't mean everything is a nail.
    9. Re:Dumbest idea, ever by phantomfive · · Score: 3, Insightful

      Financing the buyback with debt is a tiny bit worrisome,

      I'm willing to bet they are doing that because a good portion of their cash hoard is outside the United States, and if they brought it back in, they'd have to pay taxes on it.

      --
      "First they came for the slanderers and i said nothing."
    10. Re:Dumbest idea, ever by mysidia · · Score: 4, Insightful

      debt has a positive one

      After considering current inflation, the interest rate is essentially zero...

      A buyback means that they don't have immediate (or short to mid term) uses for that money.

      More like, they don't have immediate more compelling need for that money, and they feel their stock is so undervalued, that it is the most fiscally responsible choice for the use of that money.

      But as an investor it tells me that they don't have big ideas and that I'd rather put new money elsewhere.

      They may have big ideas that are already more than adequately financed, and/or that they don't require all that cash for; or that are more risky.

      When you have a big idea; squandering an infinite amount of cash (however much you happen to have) on it, is not necessarily the right approach -- there comes a point, where returns are diminishing, and excessive investment into the big idea (even if it will be the best thing since sliced bread) just serves to reduce returns.

      If they see that for now their excess cash has exceeded what their work in progress demands, then they could still have an excellent number of high impact ideas about to roll out, but still not require the insanely large pool of cash they have at hand.

    11. Re:Dumbest idea, ever by Anonymous Coward · · Score: 2, Insightful

      Microsoft's stock price is roughly $30/share today. Their last stock split was roughly a decade ago and since then It has traded in a range between 37 (123%) and (51%). In that time they have done a lot but nothing that Wall Street perticularly values. They paid a special dividend in 2004 of $3 but since then have paid a quarterly dividend amounting to about .75%. This totals $4.56 or (~15%) excluding the $3 'special' dividend and 7.56 or (25%). Not exactly stellar performance for investment even considering the global economic climate.

      When you account for equity risk, it's actually a terrible long term investment. A virtually risk free 10 year treasury note today is paying about a 21% net return 10 years ago, you would have done even better. They may be fundamentally sound, and not in desperation to avoid collapse, but do you really expect Microsoft to use sound leadership and product decisions to generate value for the shareholder. Windows 8 and Windows Phone and the Surface and the Zune all say no.

    12. Re:Dumbest idea, ever by Kimomaru · · Score: 3, Insightful

      No, I don't think so, they weren't repackaging anything. They weren't taking the crappy MP3 players of 2000 and rebranding them. They made them usable. Not earth shattering stuff, sure, but why wasn't ANYBODY doing them right. So, whatever, I don't care - the argument's stupid. There's a big difference in how the ship is being steered now that Job's is gone and anyone who doesn't see it can't really be helped. The stock price, however, is a reflection of it.

  2. Re:Why? by Tough+Love · · Score: 3, Insightful

    Repurchasing stock is meant to increase shareholder value, raising the dividend is meant to do the same.

    The latter is completely wrong (other than tax treatment, dividends have a neutral effect on shardholder value). The former is correct only because a company acting rationally will only purchase its own stock if it is confident that the stock is undervalued. It is far from clear to me that Apple's stock is undervalued.

    --
    When all you have is a hammer, every problem starts to look like a thumb.
  3. Re:Sounds like a good idea by Anonymous Coward · · Score: 5, Insightful

    No. No they do not.
    This is the biggest lie ever told to the American public, and anyone telling you this should never be trusted. (Yes. This is a large list.)

    Companies exist to promote commerce, create useful goods, and provide a livelihood for their employees. Owners and stock holders are allowed (This is a revokable privilege, not a right) to make money to provide incentive to facilitate the above functions. Anything less is a criminal enterprise.

    When we deviated so far in to the "making money" and "shareholder value" ideas is the day this country started to fall apart.

    This is not an argument. This is advice. Ignore it at your own peril, America.

  4. They have lots of new ideas, some still from Jobs by SuperKendall · · Score: 4, Insightful

    That, OR they might want to start coming up with some new ideas.

    Well Apple takes on average about two-three years to deliver products that create entire markets.

    So they are about due, and Cook said there were some surprises coming in the fall.

    But it's absurd for you to mention Jobs in this context, products take many years to complete. It will be at least two more years before we see products that never had input from Jobs, including this one.

    It's also kind of funny how Apple "needs" to come up with new ideas, when no other company seems to have the same need... or at least no-one ever says they do.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
  5. Re:Why? by Tough+Love · · Score: 1, Insightful

    Wow, this is weird. Apple spinmods modding down anybody who explains that dividends do not drive up a stock price, they do the opposite?

    --
    When all you have is a hammer, every problem starts to look like a thumb.
  6. This is worse than Yahoo messages by m.dillon · · Score: 5, Insightful

    Stick to your roots guys, this isn't a stock forum and 99% of the people here clearly don't know one blessed thing about investing, how companies work, or even what these big numbers actually mean.

    Actually its worse then that, but I'm being politic.

    -Matt

  7. Re:Why? by Alomex · · Score: 4, Insightful

    , purely because of the dividend then those new buyers are just gullible,

    Nope. The dividend is the reward for holding the stock for a full quarter. Thus the stock price at the beginning of the quarter would be the amount that makes the dividend comparable to the interest rate the stock price would earn if it owned corporate debt.

    However as the date of the dividend approaches the former owner wants a larger part of this reward because it held the stock for most of the quarter, while the new holder naturally expects less of it.

    In the extreme, if I buy the stock a second before the dividend is issued I would get a hefty return for having done nothing unless the price rose.

    Your proof is all wrong because it fails to consider the cost of holding the stock instead of say corporate debt.

  8. Re:They have lots of new ideas, some still from Jo by jd2112 · · Score: 3, Insightful

    Apple: New Product Development for Microsoft since 1985!

    --
    Any insufficiently advanced magic is indistinguishable from technology.
  9. Re:They have lots of new ideas, some still from Jo by whisper_jeff · · Score: 1, Insightful

    It's also kind of funny how Apple "needs" to come up with new ideas, when no other company seems to have the same need... or at least no-one ever says they do.

    Other companies need Apple to come up with new ideas.

    I'll let you fill in the reason why...