Correct me if I am wrong here, but my best guess is that most, though not all, retail shareholders do not own more than a few to a few hundred shares of Apple (NASDAQ:AAPL). Heck, at last check one of Apple's directors, Andrea Jung from Avon (NYSE:AVP), "only" owns 661. Another director, the man who made it possible for you to read this article, Al Gore, owns 2,574 shares. (Data courtesy of Yahoo Finance).
*Attention: This is not a call to scoreboard with how many shares you own and how long you held them in the comments' section. Please only bring it up if it's relevant and without the words "face" or "money" or "cold punked" or "BooYAH" included in your contribution.
I did not dig deep enough to see if these are direct shares (though I think they are) or the equivalent of unexercised options. I am overlooking this because it really does not matter how things are set up. For the sake of argument here, let us assume that Jung and Gore have these shares sitting in a Sharebuilder account right now and that they will collect dividends on them. Let us also assume that most, but not all, mere mortal AAPL shareholders own fewer shares than Gore and Jung. It's probably quite safe to assume that most people reading this, if not all, do not own anything close to the 95,000 shares George Soros keeps in his fund, as of the end of last year. And I realize that Soros cannot run out and buy lunch with his AAPL dividend (or, who knows, maybe he can?).
With AAPL's forthcoming dividend set at $10.60 annually (to be paid out quarterly at a rate of $2.65 per share), Jung would collect a yearly dividend check of $7,006.60 or $1,751.65 per quarter. Not bad, but hardly enough to live on. Gore, meantime, would rake in $27,284.40 annually or $6,821.10 a quarter. Pretty good. Plenty of folks make much less as wage slaves in a year (or more).
Soros, clearly a big boy on Wall Street, will see $1,007,000 in dividends each year if he keeps all 95,000 shares in his fund. That's $251,750 every three months. You can clearly see how things escalate as you climb the food chain of AAPL share ownership. The "poor sap" at 100 shares receives a measly $1,060 per year or $265 a quarter for his stake in America's greatest company.
If you recall one of my recent articles on the AAPL dividend, I cited a meaningful blurb from Fortune's Adam Lashinsky:
Lashinsky also pointed something out that's apropos to my earlier contention that this dividend only truly benefits the big money: A UBS wealth-management note about Apple soliciting the opinions of big investors - all of whom wanted this dividend - is what led me to conclude in early February that this dividend was imminent.
I have largely focused on why I think this dividend represents a bad idea by Tim Cook. A meaningful cultural shift away from what Steve Jobs would have done that we will only recognize the full impact of in the rear view mirror of time. Something else, however, puzzles me almost as much.
Why, from so many corners of retail, where investors presumably own far fewer than 661 shares and probably even less than 100 in many cases, has there been such a clamoring for this AAPL dividend?
Let's face it. Even a moderate Apple fan boy or girl spends far more than the dividend he or she will receive on the company's products each quarter. And, while I am a proponent of the power of reinvesting dividends, plenty of better opportunities exist for putting that strategy to work.
This dividend really benefits nobody but the big boys. Some cats with lots of shares can live off of this thing. Many already have been living off of AAPL stock by writing covered calls against a sizable position. But, I do not think I make a wild guess when I say that many of the cats with the loudest meows for the dividend probably do not really own that many shares and the dividend will have no meaningful impact on their lives or futures.
In a world where we really have a disdain for the big boys on Wall Street, it befuddles me as to why so many everyday, mere mortal investors support the very things that let the rich get richer.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.