For purposes of this chart, “cash” includes “cash and cash equivalents” plus the company’s highly liquid short-and long-term marketable securities.
I haven’t yet listened to the conference call. I suppose many questions will be asked about earnings and revenues. But that “800 pound gorilla” issue could come up: What should the company do with all that cash.
Now that Steve Jobs is gone, the company’s board and management team will likely find itself under pressure to institute a dividend or pay a special dividend to return some of the cash to shareholders.
Some seem to think that if the company does that, it becomes “another Microsoft” – in that once a company begins to do something like that, growth stalls and the company’s best days are behind it.
In short, some view the company’s growing cash balance as some sort of a “problem."
I disagree. Or let’s put it another way. Flash back to 2009 when the company had “only” $40 billion in cash. If you knew that the cash balance would top $81 billion by late 2011 would you not have invested in the stock? Would you have taken the view, “No way am I investing in a company that just accumulates massive amounts of cash and never seems to do anything with it?"
Not me. I'm actually kind of pleased to own a company that has that kind of dry powder available.
So if this is a problem, it’s a “high quality problem.” As long as the company doesn’t make any dumb acquisitions, I’m OK with the status quo. And if I get some of the cash back in the form of a special or regular dividend, I’m okay with that too.