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Pres. Obama's re-election doesn't bode well for the odds of a tax holiday on overseas cash,...

Pres. Obama's re-election doesn't bode well for the odds of a tax holiday on overseas cash, notes Eric Savitz. That's problematic for large-cap tech names such as Apple (AAPL), Microsoft (MSFT), and Cisco (CSCO), which respectively have $83B, $54B, and $42.5B stashed overseas (per their most recent financials). As Savitz observes, there's a good chance some of that cash will be used on foreign acquisitions, especially in light of recent deals such as Microsoft/Skype and Cisco/NDS.
Comments (31)
  • Perhaps the blogster favorite: MSFT & NOK.
    7 Nov 2012, 06:46 PM Reply Like
  • Another article not based on fundamental financial facts, growth projections for Apple and information tech sector in general. Possible motivation of these articles is to lower stock price for options/swing trading verse long-term holds. The intrinsic value of Apple's stock should be at minimum 750 based on facts. Obama's perspective on tech is in Apple's favour, he gets it based on articles and interviews I have read the importance of all sectors of tech to the global economy especially to the US economy if it wishes to remain a top tech hub of which Apple is absolutely essential. He will wanting to be sure Apple and other tech companies do well as that will help America's overall economy.
    7 Nov 2012, 08:06 PM Reply Like
  • The Corp idiots are getting what they deserve. They should have supported Romney out in the open. So now they are worried that they won't get one of those 5% passes to get their foreign dollars to work in the USA.
    7 Nov 2012, 06:59 PM Reply Like
  • They already had a tax holiday in 2006 didn't they, what happen?
    8 Nov 2012, 01:36 PM Reply Like
    7 Nov 2012, 07:00 PM Reply Like
  • Regardless of whether Romney or Obama won, solid, well managed companies with stellar fundamentals, with much potential for growth such as Apple along with a solid reputation of providing quality, reliable products consumers know will get their monies worth will do well regardless. Apple's fundamentals such as a low PEG of .52 meaning lots of growth expected and an EPS expected of 22% per year for the next five years and that Apple is operating in the knowledge sector which is a growth sector overall and will be for decades as the global economy transitions from the industrial
    economy to the knowledge economy will continue to growth. These kinds of articles unnecessarily scare inexperienced long-term investors and only help swing traders. Also in Apple's favour Obama is very committed to the growth of tech in America and he appears to understand it's importance to the global economy, he even mentioned the importance of technology in his winning presidential address yesterday.
    7 Nov 2012, 08:00 PM Reply Like
  • For value investors this is an appropriate time to purchase Apple, not sell. Obama and congress will take care of the financial cliff, good companies, w/ solid products/services, well managed like Apple do well regardless of whom is elected.
    7 Nov 2012, 08:17 PM Reply Like
  • I wouldn't bring it back to the USA anyway ,


    it will only go to the 10,000 new additions to Food stamps each day , and 3000 new additions to welfare ... you know , the 47%
    7 Nov 2012, 09:29 PM Reply Like
  • The stock market doubled during Obama's first four year term. The company's are cash rich. This will probably be repeated in the second ter.


    The saving's rate of American's is the highest in the last 20 years.....Companies are cash rich. this probably is a problem for unemployment.....that people are not spending and maxing out their credit cards and leveraging their homes for additional loans.....this is what caused the financial problems in the first place. Can't blame that on Obama.


    Microsoft's problem with the foreign cash is simple. Shift Microsoft International's offices to a tax heaven in the Bahamas. Then Microsoft International can purchaseall the shares of Microsoft USA. The final shareholder will then own the entire private Microsoft International, which will operate as a foreign company in a tax heaven!
    7 Nov 2012, 10:12 PM Reply Like
  • The stock market didn't double during Obama's first term. It was up 60% and that was due to fiscal stimulous, not fundamentals. The effect of that stimulous is over. The economy and companies will have stand on their own two legs now. That's a much different proposition than the jury-rigged market rally of Obama's first term.
    7 Nov 2012, 10:52 PM Reply Like
  • Romney ran his campaign like Meg Whitman runs HP and it's Obama fault Ha..Ha..For real facts all you had to was follow Nate Silver's site.
    8 Nov 2012, 01:41 PM Reply Like
  • Seems like you are more angry at O then W? W f----up this country and the world economy for the forseeable future. Obama put on the brakes from us falling into the abyss.This country started going south from Reagan 1st term. We were banker to the world, after Reagan we became a debtor nation. Clinton fixed it, and W screwed up.


    I asked people who voted for W. Why did you voted for W? No answer. The same people voted for Romney..... based on race.
    8 Nov 2012, 02:04 PM Reply Like
  • Oh please.... why do O supporters always pull the race card! What about 93% of blacks voting for O- if that isn't racist, I don't know what is!
    8 Nov 2012, 03:06 PM Reply Like
  • Wait until 2050, women will be at least 50 strong (most will Democrats) in the Senate, at least 2 women (Democrats) will have been president by then, single payer will the law of the land, marriage will just be marriage, T-Baggery in politics will isolated to north Texas, and Oklahoma, and asking a black person to vote for a modern Republican (after 1920) is like a Jewish person voting for a Nazis.
    8 Nov 2012, 04:58 PM Reply Like
  • Wow. Obama called Bush unpatriotic for racking up $2T dollars in debt...which the Dems were complicit with, including Obama. We are now over $16T and climbing. But, it's now not unpatriotic it's the fault of these greedy, rotten wealthy people. So, they will pay and the Country will decline. It's not a white -vs- black issue. It's a liberty -vs- tyranny issue. We will be fundamentally transformed...
    I would not have voted for Obama if he were white but, I would have been thrilled to vote for Herman Cain. Romney's machine destroyed him.
    12 Nov 2012, 01:13 PM Reply Like
  • DanoX-
    "asking a black person to vote for a modern Republican (after 1920) is like a Jewish person voting for a Nazis." ?????


    I am stunned you would equate the two- as far as I know Republicans (especially "after 1920") did not engage in the wholesale slaughter of hundreds of thousands of blacks. I do not deny there are still people prejudiced against blacks (and Muslims, gays, Mexicans, Jews, the list goes on....), but you are wrong if you think everyone that didn't vote for Obama did so because he is black.


    In any event, I believe the Republican party will need to change its stance on social issues or die. The only reason I did not vote for Obama is because I don't think he knows what he is doing with the economy. That's it.
    13 Nov 2012, 05:38 PM Reply Like
  • The battle is over. Obama won. Now let's move on!
    7 Nov 2012, 11:33 PM Reply Like
  • Most of these comments miss the point of the original post: (1) If there is not going to be an opportunity to repatriate foreign cash under the current administration, then the money cannot be used for dividends or other forms of return U.S. shareholders. (2) Blocking repatriation of funds creates the incentive to use the money to make acquisitions, most of which turn out to be unwise. For these two reasons, U.S. refusal to adopt international standards of corporate taxation are destructive of shareholder value.
    7 Nov 2012, 11:37 PM Reply Like
  • I think Dems bashed companies with foreign cash hordes for brazen political purposes. Now the election is over and they have to produce results. I think changes in law incentivizing companies to bring cash home are much more likely now-- it's just good policy. Makes future capital projects more likely in US which translates to good paying jobs. Salaries are somewhat correlated with capital investment. Be it low tech (mining), high tech (apple, intel) or in between (autos), high capital investment leads to better paying jobs. Union bosses should figure this out and get behind a repatriation.
    8 Nov 2012, 01:48 AM Reply Like
  • As a shareholder the money can and should stay overseas, unless Apple brings it back to built Fab plants (Chip and LCD screens in the US, after all if Samsung can have Fab in the US, Apple can too no excuses), pissing the money down the drain to banks, hedge funds, and management is unacceptable.


    Congress can however change the tax laws to benefit companies who actually built infrastructure in the US. A tough no-nonsense law can be passed. (but won't happen)
    8 Nov 2012, 01:57 PM Reply Like
  • Someone explain to me why MSFT can't continue to buy back shares with its offshore money?
    8 Nov 2012, 06:18 AM Reply Like
  • Not sure but I heard somewhere that the IRS may count it as a repatriation followed by a purchase by the parent--triggering the tax in any event. If not, it would be an obvious thing to do. Since none of the big tech companies with cash hordes is doing it I surmise that it must not work.
    9 Nov 2012, 01:21 PM Reply Like
  • You unwittingly buy into the Democrat's attitude that some of this money (like your personal earnings) belongs to the government. It does not. CSCO, AAPL and others have not "stashed" their money overseas. They earned that money, paid taxes on it and should be able to invest where they'd like. If the US Gov't is shortsighted enough to think it should take some of this investment money, it's no surprise that US companies would use that money overseas and make investments there. The US tax policy is simply foolish. Get ready for four more years bashing corporate America, the venture that creates jobs, feeds our families and pays our taxes.
    8 Nov 2012, 08:41 AM Reply Like
  • Amen. And how many 'off-shore companies' invested in this President's re-election. New World Order on it's way. I hope the optimists are correct and the cash rich Companies can ride this one out but, I fear the damage done in these next 4 years will have a permanent impact. There was a time when being wealthy was something to strive for. Now it just means you're selfish and evil. If the Founding Fathers could see us now...
    8 Nov 2012, 09:15 AM Reply Like
  • Corporate America should be bashed (challenged to do better).
    8 Nov 2012, 02:00 PM Reply Like
  • It has been a "foolish tax policy" that made us a great nation, and the evny of every investor. That is what was said under Bill Clinton administration.
    8 Nov 2012, 04:51 PM Reply Like
  • This understandable since they don't want to pay taxes on these profits while the average wage earner has too. A clear example why there is disparity on taxation for the rich. Let them keep their money overseas until the potential catastrophic collapse of economies
    in Europe. Then their assets wont be safe an they will rush back to the USA to pay taxes to save their billions. No tax break for companies who export jobs and keep financial assets overseas.
    Maybe we will learn a lesson on greed.
    8 Nov 2012, 11:48 AM Reply Like
  • Herbhh, they have paid taxes on those profits where they wee earned--overseas. The US is alone in wanting to tax repatriated profits of US headquartered companies that are earned overseas. The progressive governments in Europe and other places have already decided this is a bad idea and don't do it. The US is alone in promulgating this stupid envy driven tax policy. You're just repeating the simplistic populist talking points that have no basis in reality.
    8 Nov 2012, 12:06 PM Reply Like
  • I happen to think that moving quickly to develop a policy which allows reduced taxes on overseas profits/cash if the money is invested in proven job-creating businesses in the U.S. is a no-brainer. I also agree that the money has been taxed already where it was earned so this kind of solution would be a win/win. Then again, I am a proponent of legalizing marijuana and imposing a hefty tax on it (think cigarettes) as a way of opening a new revenue stream for the government and eliminating a profit source for organized crime. But then again, I am the first to admit I don't know much about nothin'!
    8 Nov 2012, 12:22 PM Reply Like
  • My first response to the issue of corporate money overseas: they are protecting share holder value. Who or what company, with any senses about them, would bring their money, like a sheep to slaughter, to a government mandated to take a larger percentage of it than any other taxing authority on the face of the planet?
    If our tax code is equitable, corporations and individuals alike, will pay their fair share. If not, both will avoid being taxed. Complete fair and equitable tax reform is a must for this country to prosper.
    8 Nov 2012, 03:27 PM Reply Like
  • This is why Tax reform is needed to level this field.
    There will be much debate on this issue in the next 4 years.
    But at the end of the day the theme of taxing the corporations and the rich will prevail as We the people mandated in re-electing OBAMA.
    Little room for compromise here


    Simplistic popular belief or not. it is the right thing to do.
    The demographics will support this mandate.


    You guy's can move to another country if you don't like it.


    may not be a reality for the pure capitalist.


    Question: Can an average person bring in to the USA money from overseas more than 10K$, and not get taxed, ( try it) lets see what the US customs say. Try that with other countries, they get locked up quickly.
    9 Nov 2012, 12:50 PM Reply Like
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