Seeking Alpha

Apple looks to raise $17B in bond sale

  • Apple (AAPL) is making preparations to raise $17B in international and domestic bonds in order to help finance its stock-repurchase program, which the company has raised to $90B from $60B.
  • Apple has a cash pile of $150B, but $130B is held overseas, and repatriating it would incur a tax rate of 35%.
  • A debt sale would add to the $17B that Apple raised a year ago, when demand topped $50B.
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Comments (33)
  • nooseah
    , contributor
    Comments (466) | Send Message
     
    No doubt the Apple fanboys will be out in force cheering this latest development, all the while denying that this is nothing more than financial engineering rather than genuine investment in future product lines.

     

    When you've run out of ideas to get your stock moving in the right direction, resort to stock buy-backs to make that eps look more respectable. Problem is, reality eventually catches up with you.
    28 Apr, 06:17 AM Reply Like
  • nguyenvanphuoc
    , contributor
    Comments (388) | Send Message
     
    "No doubt the Apple fanboys will be out in force cheering this latest development, all the while denying that this is nothing more than financial engineering rather than genuine investment in future product lines."

     

    Ah, Financial Engineering, the newest buzzword heralding the end of Apple.

     

    I mean, my God, how DARE they take one SINGLE resource away from technological innovation! What is the CFO doing, wasting his time trying to plan effective uses of capital? He should be in the lab, innovating with everybody else!

     

    As for investment in future product lines, have you perchance looked at Apple's R&D spending recently? Or their acquisitions? Just curious if you have.
    28 Apr, 06:21 AM Reply Like
  • u01bsb0
    , contributor
    Comments (639) | Send Message
     
    sorry but Apple does have huge investment in future product lines.

     

    Do your homework, look at R&D spending on their earnings reports.
    28 Apr, 06:33 AM Reply Like
  • bdy
    , contributor
    Comments (150) | Send Message
     
    I LOL'd financial Engineering is actually a real degree what the heck... Now get back in the lab Mr. CFO
    28 Apr, 06:49 AM Reply Like
  • NWCats404
    , contributor
    Comments (243) | Send Message
     
    IBM has had flat revenues for years, and is an example of using financial engineering to buoy EPS. How can you possibly expect Apple to spend 40B per year in 'genuine investment in future product lines'? Doing this would require Apple to become reckless with their money, buying up every company they can find. Acting in this manner would be irresponsible and a much more damning indictment of Apple's management team being afraid of their prospects.
    28 Apr, 10:21 AM Reply Like
  • rrose39
    , contributor
    Comments (763) | Send Message
     
    And when will reality catch up with you, nooseah?
    28 Apr, 02:08 PM Reply Like
  • nochance
    , contributor
    Comments (52) | Send Message
     
    No doubt in the meantime I'm making lots of money owning the stock and collecting the Dividends. When will you Apple haters learn that you are always just dead wrong.
    28 Apr, 06:16 PM Reply Like
  • nochance
    , contributor
    Comments (52) | Send Message
     
    There will always be Apple haters, just the way it is..... Its a great company, they have lots of money even if its not in the states who cares. Great product and most of all Great Brand Recognition. When will the Apple haters learn.
    28 Apr, 06:19 PM Reply Like
  • VAWhiz
    , contributor
    Comments (45) | Send Message
     
    I would like to see Apple get under $10B in monies in the US. I no longer trust Cook after his response at an earlier Conference when he refused to answer how much going green was costing and stating he was not concerned about the bottom line when he was doing something for the blind. I was Chief, Planning and Programming for the Maryland State Roads Commission and his answer was typical of the politicians' answers when they were caught; either they did not know the answer or knew it but did not want to disclose the truth.
    28 Apr, 06:30 AM Reply Like
  • mosheoskar
    , contributor
    Comments (58) | Send Message
     
    aapl is going a lot higher
    28 Apr, 06:30 AM Reply Like
  • chopchop0
    , contributor
    Comments (3418) | Send Message
     
    2013 called. It wants its prediction back
    28 Apr, 07:27 AM Reply Like
  • John Grandits
    , contributor
    Comments (368) | Send Message
     
    2013 called and wants its joke back
    28 Apr, 04:29 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8603) | Send Message
     
    Why does the government want over $35 billion from Apple?

     

    Who's money is it?
    28 Apr, 07:06 AM Reply Like
  • Doyle3000
    , contributor
    Comments (1363) | Send Message
     
    Hopefully in the next few years this tactic of issuing bonds here vs. re-patriating overseas dollars will lead to some policy changes. I think the government is a little unreasonable with 2 issues here: 1) 35% is high relative to other developed countries and 2) why does the government feel that AAPL needs to prove to them that it'll create jobs? What if it really doesn't create a job? Who cares? It's their money and although a fair tax is probably warrented, I don't think 35% is reasonable.

     

    Solution: Lower tax to 20% or if the company uses the cash for a direct investment into something concrete, they can pay even less tax, depending on the investment.

     

    This could all be part of a new tax code that will probably never get done in this country with our congress. And don't blame Obama here - this is a Congressional ineptitude problem.
    28 Apr, 08:38 AM Reply Like
  • financeminister
    , contributor
    Comments (786) | Send Message
     
    Financial engineering or no financial engineering... new product or no new product... I'm not complaining that AAPL stock is finally taking off. It's my second largest holding in my portfolio at around 8% averaging at around 520/shr. Like any business, I need my long term investment to pay off and "financial engineering" + the dividends are satisfactory compensation till I see new products enter the market. I consider AAPL as a value investment and the strongest link in the chain if there is a we enter a bear market or some black swan shows up.
    28 Apr, 02:23 PM Reply Like
  • financeminister
    , contributor
    Comments (786) | Send Message
     
    that's sensible... therefore this shall be outrightly dismissed.
    28 Apr, 02:24 PM Reply Like
  • samuel.kirz
    , contributor
    Comments (83) | Send Message
     
    Instead of buying stock, they should buy Motorola for 12 billion and then sell it for 3 billion, two years later.
    28 Apr, 11:02 AM Reply Like
  • no one really
    , contributor
    Comments (137) | Send Message
     
    Nah, it's been done.
    28 Apr, 03:05 PM Reply Like
  • AutoRegressive
    , contributor
    Comments (190) | Send Message
     
    The 43.5 BN used for buybacks is looking like a pretty damn good idea with the price pushing towards $600.
    28 Apr, 11:27 AM Reply Like
  • doji9
    , contributor
    Comments (3) | Send Message
     
    aapl going to a split adjusted 1000 $'s a share quicker than anyone would think
    28 Apr, 11:50 AM Reply Like
  • Eric Dee
    , contributor
    Comments (1190) | Send Message
     
    Yeah, doji9, as a stockholder I could get excited by that 1000 figure. But it ain't gonna happen soon. If it does I shall take my gains and go home!
    28 Apr, 06:54 PM Reply Like
  • xounderground
    , contributor
    Comment (1) | Send Message
     
    I'd just like to see them pay their gd taxes...HERE
    28 Apr, 11:51 AM Reply Like
  • nochance
    , contributor
    Comments (52) | Send Message
     
    Non of the cash rich companies hold there cash here....That would just be stupid...
    28 Apr, 06:21 PM Reply Like
  • Sobroke
    , contributor
    Comment (1) | Send Message
     
    It looks like noons of you have heard of "overseas investment tax credit". We all paid companies to take work yo other countries. They should pay some taxes.
    28 Apr, 11:51 AM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (11136) | Send Message
     
    The bigger issue is how Apple and others pad their overseas subsidiaries profit to prevent it from being taxed in the US and Europe where most of the product is sold. The simple fact is this is tax dodging on a grand scale that not just denies the government its fair share but encourages the exporting of jobs and wealth overseas. Apple is one of the best at making sure it outsources as much as possible overseas.

     

    Combined, such behavior is a grand drag on our economy and causes massive trade deficits. It is rather sad watching Apple struggle to pay dividends without paying a cent to repatriate overseas profit. Legal doesn't mean right.
    28 Apr, 01:15 PM Reply Like
  • MJ Badagliacco
    , contributor
    Comments (286) | Send Message
     
    It's NOT the governments money!

     

    It is their duty to pay the least amount of taxes possible!
    28 Apr, 02:47 PM Reply Like
  • nochance
    , contributor
    Comments (52) | Send Message
     
    If the company makes me money as an investor I could care less.
    28 Apr, 06:22 PM Reply Like
  • faramarz
    , contributor
    Comments (285) | Send Message
     
    @ WAVhiz. You may not be concerned with "going green" but many others are. Going green is preserving thé future and this is a big concern for many and Apple. Please look a bit farrer than your nose.
    28 Apr, 01:04 PM Reply Like
  • Doc's Trading
    , contributor
    Comments (1281) | Send Message
     
    AAPL......... Agree AAPL going much higher long term..... Will be submitting an article on buy recommendation when technical's warrant purchase, but NOT here at the 590 area.
    Stay tuned for my article which will be timed for a much better entry point than here 590.......
    Market as a whole technically weak here and AAPL can only swim against the current for so long... then she too will be pulled back a piece.... keep your powder dry and keep a lookout for our coming recommendation.........
    more later....
    28 Apr, 01:46 PM Reply Like
  • nochance
    , contributor
    Comments (52) | Send Message
     
    Your a little late with your article. you should have written it when the stock was under 500...LOL
    28 Apr, 06:37 PM Reply Like
  • meishairwin
    , contributor
    Comments (11) | Send Message
     
    Moon: There is no such thing as a "fair" tax. The government takes our money by force. Nothing fair about that. The government sets the rules, we have to play by them. Apple plays fair; if they didn't, they'd get indicted. Makes no sense for corporations to pay taxes in any case. People own companies -- they pay when they take money for themselves in dividends or realized capital gains. Otherwise, the money is in the company creating jobs. Learn some economics before you make stupid comments like yours.

     

    faramarz: Manmade CO2 induced global warming is nonsense. Global temperatures have not risen in 17 years. The prediction models have universally failed. Going green is economically wasteful and kills people in developing countries; e.g., windmills and solar: uneconomic; corn-based biofuels raise food prices and undercut subsistence farming for those most vulnerable.
    28 Apr, 01:47 PM Reply Like
  • ultraz2@aol.com
    , contributor
    Comments (530) | Send Message
     
    Apple fan s see Apple stock for what it is. A really cheap stock at $800 a share and still a cheap stock at $1,000 a share.Which is$142.85 a share post split.
    28 Apr, 03:01 PM Reply Like
  • nochance
    , contributor
    Comments (52) | Send Message
     
    Why is it that no matter what Apple does its just not good enough for the Apple haters. I mean its a great company with solid products and great service. They have a large following, plenty of money brand recognition and pay a nice dividend. when the stock splits it will be at $140 in no time which is that $1,000 a share number everyone is looking for. I get it, why is it that others don't? JMO
    28 Apr, 06:42 PM Reply Like
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