Posted on 04/23/2013 1:37:30 PM PDT by dennisw
To boost share price. News just came in on this
If nothing else this should help out the Apple employees who own boatloads of Apple shares. Will help out a more than a few freepers too who like Apple products and own Apple
So, Tim can’t think of anything that would net yield > 2.7%?
I’ve thought a lot about stock buyback programs, and one thing ya hafta say about them is that they are obviously the direct opposite of selling stock in your corporation - which is what you do when you are starting up. Isn’t it an admission that they don’t know how to invest the money in their business?IMHO I would rather see them declare a bigger dividend.
Apple has about 125 billion in the bank
This is just going to result in selling by the big players in the market.
Stock buybacks are a terribly inefficient use of the cash in the company.
A dividend, whether special (one-time) or an ongoing dividend is a much more efficient use of cash to reward shareholders. What it requires, however, is crushing the 90’s-era mentality of the management and directors of a tech company and admitting that the go-go-growth days are coming to a close.
$145 billion now... Stock up to $430 in after market trading after the earnings beat.
Well, not anything that passes muster with the directors.
There’s no more “passive” and “safe” parking investment for huge wads of cash on the balance sheets any more. Treasury debt has been bid up (ie, yield rates have come down) and there’s a ferocious risk in making big investments in sovereign debt now. Rates can’t go much lower than they are, and with real inflation exceeding the “safe” yields of sovereign paper, there’s no point in holding such investments any way.
If Apple could see some acquisition targets, they could use the cash for buying technology or companies that would be positive for their bottom line - but there’s not really anything out there on the horizon just now, unless they want to buy their way further into the entertainment/content creation market. I’ve thought for a long time that they should seek to buy a record company that’s foundering and start taking musicians from recording content clear through to distribution, and start stealing acts away from the bigger studios.
ping
It will help them dump their shares until they can find a way to channel Steve Jobs from beyond the grave.
When I think of a Stock Buyback, I see the board of directors wanting even more control over the company. Especially if you don’t want to answer to the stockholders over your decisions.
“Isn’t it an admission that they don’t know how to invest the money in their business?”
That’s what I’ve been taught in school. And the rationale you use makes sense.
Maybe it’s best to look to the short side on any rallies.
Institutions own 67% of the outstanding shares, mutual funds own over 30# and insiders own <5%. They’ll buy shares blindly and it will have no material mp act on the control wielded by the board.
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