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An influential technology analyst says Apple (AAPL +0.7%) needs to start returning some of its...

An influential technology analyst says Apple (AAPL +0.7%) needs to start returning some of its $46B cash hoard to shareholders through a regular dividend or share repurchases. Apple's likely response: Microsoft (MSFT) pays a dividend. We do not want to be Microsoft.
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Comments (11)
  • Nathan W Martin
    , contributor
    Comments (87) | Send Message
     
    I can't imagine them not returning or spending some money once their cash levels surpass $50 billion. It is good to have financial flexibility but it is also difficult to think of a situation in which $50 billion cash would be needed, especially for a company with zero debt and whose bonds would be gobbled up.
    12 Aug 2010, 04:05 PM Reply Like
  • Stone Fox Capital
    , contributor
    Comments (6843) | Send Message
     
    funny, but they should start paying divys with the cash they generate each Q. I'm fine with the strong cash balance, but its getting to be a waste of money. Besides all that cash paid out could be used to buy more apple products.
    12 Aug 2010, 04:05 PM Reply Like
  • Nathan W Martin
    , contributor
    Comments (87) | Send Message
     
    They could buy Barnes & Noble with their free cash flow this quarter.
    Although I'd really like for them to just buyout ~100 locations in order to expand Apple's retail footprint rapidly.
    12 Aug 2010, 04:19 PM Reply Like
  • citizenleung
    , contributor
    Comments (269) | Send Message
     
    How long does it take for Apple to make an amount equal to Border's market cap ($72.54M)?
    12 Aug 2010, 04:28 PM Reply Like
  • Wilky
    , contributor
    Comments (112) | Send Message
     
    The smart thing to do would be to buy a load of stock back now while it's comparetively cheap and then declare a generous, one off dividend, with a hint that they may make it an annual event. They'd probably be at $300 a share within a matter of days. Win win for Apple, win win for shareholders.
    12 Aug 2010, 04:32 PM Reply Like
  • Tricky
    , contributor
    Comments (1588) | Send Message
     
    They make profits. That's like Microsoft. Are they going to stop doing that?
    12 Aug 2010, 06:08 PM Reply Like
  • Paul H. M.
    , contributor
    Comments (1035) | Send Message
     
    Also, when you consider inflation, hording that much cash is basically like losing money.
    12 Aug 2010, 06:25 PM Reply Like
  • shillslayer
    , contributor
    Comments (383) | Send Message
     
    The FUD never stops from this microsoft shill.

     

    Now there is such a thing as "too much money".
    13 Aug 2010, 12:34 PM Reply Like
  • rmsilva456
    , contributor
    Comments (2) | Send Message
     
    Well, the talk in the street is of deflation...
    13 Aug 2010, 06:42 PM Reply Like
  • Jonathanrsullivan
    , contributor
    Comments (-1) | Send Message
     
    There is a reason Mr. Buffet doesn't believe in dividends. It exposes the cash to the tax liability of the shareholder which really translates to a reduction in the wealth of the shareholders and the whole idea is based on an assumption that the company cannot do a better job with the money than the shareholder. If you believe the company reinvesting the money in itself will yield a higher return than the dividend-Tax liability x return on investment than dividends don't make sense. The hype on apple is growth. Iphone and Ipad are all market leaders in growing markets. Even maintaining market share in those expanding industries is going to result in big profits. Apple will fid a use for that cash.

     

    As to the inflation concern, wan't it last week all the headlines were about deflation. This is not the 1990s or the 2000s, everyone is holding cash not just apple. This Administration and this Congress are failing to create a stable business environment. Dividends are the candy of the market past but Cash is King these days.
    13 Aug 2010, 10:56 AM Reply Like
  • rubicon59
    , contributor
    Comments (1414) | Send Message
     
    They have to return excess cash to the shareholders (.e. the owners), although they don't seem to want to.

     

    There is way too much of it to re-deploy in the business at superior returns or for any possible contingency. Certainly everything above $20b could be returned, but one could argue that they need to return even more, given the rates at which new cash is generated, and the low-capex nature of the business.

     

    Buying Apple stock on the cheap would clearly be superior to taxable dividends. But if the stock's multiple runs up, the dividends would be the way to go.
    13 Aug 2010, 12:51 PM Reply Like
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