To no one's surprise, investors are enthusiastic about buying debt from a very profitable...


To no one's surprise, investors are enthusiastic about buying debt from a very profitable large-cap with $145B in cash/investments and (currently) no debt. Apple's (AAPL) plans to borrow (and thereby avoid paying taxes on offshore cash) to help pursue its goal of returning $100B to shareholders by the end of 2015 has already led many institutions to express interest, and S&P and Moody's to respectively assign ratings of AA+ and Aa1. Some think Apple, whose rates will likely be well below the 3% dividend yield now offered by its stock, could raise over $50B.

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Comments (21)
  • bbro
    , contributor
    Comments (11216) | Send Message
     
    If Apple is lucky S&P and Moody's will downgrade them...worked well
    for the U.S.
    25 Apr 2013, 09:22 AM Reply Like
  • gensearch2
    , contributor
    Comments (1556) | Send Message
     
    The US was downgraded because Congress can't make a frigging decision on spending if their lives depended on it. Hell, the Republicans can't even make a decision among themselves anymore.
    25 Apr 2013, 09:32 AM Reply Like
  • gensearch2
    , contributor
    Comments (1556) | Send Message
     
    "Enthusiastic" may be an exaggeration, but with the way Cramer is beating Apple with a hammer, yesterday and today, he would seem to be surprised.

     

    Then again, last Sep, Cramer said that Apple was the best managed company in the world; today Cramer says Apple managment is "now despised".

     

    Perhaps that's a buy signal. ;o)
    25 Apr 2013, 09:39 AM Reply Like
  • jsmunroe59
    , contributor
    Comments (119) | Send Message
     
    Cramer is the most lost soul in Manhattan... he must walk around endlessly asking homeless people what they think of AAPL and HD and MRK etc. etc. etc.. Never have I witnessed someone with such poor performance be compensated for such a lengthy period of time... BOOOOOOOOOOOOOO YA!
    25 Apr 2013, 09:46 AM Reply Like
  • Dean Scarpinato
    , contributor
    Comments (367) | Send Message
     
    Except Tim Cook. How does someone sit there, watch the value of his company cut in half and not come out swinging. He's a playground pick-upon. M, had they announced this buyback/dividend when the stock was rallying ain the 470's it might be above 500 now. Anyone think that Cook is manipulating the stock downward to get in lower? So much for maximizing customer experience with Apple.
    25 Apr 2013, 10:22 AM Reply Like
  • JUDOKA
    , contributor
    Comments (404) | Send Message
     
    FUNNY!!!
    25 Apr 2013, 10:41 AM Reply Like
  • gensearch2
    , contributor
    Comments (1556) | Send Message
     
    Maybe, and maybe had he announced it in the 470s, it would still have hit 400 anyway. Every alternate reality is a maybe.
    25 Apr 2013, 10:28 PM Reply Like
  • CatchallInvesting
    , contributor
    Comments (263) | Send Message
     
    "To no one's surprise, investors are enthusiastic about buying debt from a very profitable large-cap with $145B in cash/investments and (currently) no debt. Apple's (AAPL) plans to borrow (and thereby avoid paying taxes on offshore cash) to help pursue its goal of returning $100B to shareholders by the end of 2015 has already led many institutions to express interest, and S&P and Moody's to respectively assign ratings of AA+ and Aa1. Some think Apple, whose rates will likely be well below the 3% dividend yield now offered by its stock, could raise over $50B. "

     

    There are people who come late to the party and cry that the food is not hot. The stock market is more than a momentum play. In the case of AAPL they may have a year when they only earn $700,000,000 a week. A profit of $35,000,000,000. Just because the share price exploded up last year is no justification for a similar percentage collapse this year. They have piles of money and earn truckloads of money. They should consider buying a small country as an investment.
    Just because a power broker/manipulator (GS) comes out on the short side at $437 is no reason that the share price should decline over 10%. beside it would not be farfetched to guess that they were repositioning themselves if only the financial collapse of 2008 were used as example. When they took the other side of the customers trade that they created. It is the game of zero sum game and collect all you can and stop the regulators.
    Growth probablility and upwards of a 3% return at lower prices makes this a hard opportunity to avoid if you want a steady return over a few years.
    25 Apr 2013, 09:45 AM Reply Like
  • JUDOKA
    , contributor
    Comments (404) | Send Message
     
    Check bond prices.A AA+ credit could float bonds for 1.5%.A good move on Apple's part.Borrow at 1 1/2 and buy in stock that you are paying 3% on.
    25 Apr 2013, 09:47 AM Reply Like
  • Esekla
    , contributor
    Comments (4442) | Send Message
     
    I agree, a good move on Apple's part from a balance sheet perspective. There are many, though, who might prefer the bonds, with a guaranteed 1.5% return and virtually zero capital risk, to the stock, which I could easily see falling another 10% or so. So this strategy may actually limit the stock's upside in the short to medium term.
    25 Apr 2013, 10:12 AM Reply Like
  • rocback
    , contributor
    Comments (1098) | Send Message
     
    Great move. They can buy back stock for 1.5% interest and not have to pay 3% dividend. Like printing money.
    25 Apr 2013, 10:16 AM Reply Like
  • jbcm
    , contributor
    Comments (281) | Send Message
     
    rocback, great comment! Apple shareholders could smile! Me to! (smile!)
    25 Apr 2013, 10:34 AM Reply Like
  • User66224
    , contributor
    Comments (210) | Send Message
     
    Somewhere, Milo Minderbinder is smiling.
    25 Apr 2013, 12:12 PM Reply Like
  • SP5524
    , contributor
    Comments (86) | Send Message
     
    Wait, why is there positive news posted today? Something's not right...
    25 Apr 2013, 11:21 AM Reply Like
  • jbcm
    , contributor
    Comments (281) | Send Message
     
    SP5524, they have probably now buy cheap Apple shares I gees! And me to! (smile!)
    25 Apr 2013, 11:31 AM Reply Like
  • jbcm
    , contributor
    Comments (281) | Send Message
     
    Fore a while now I have tested and think about the case with that Apple take up cheap rate dept and use for dividend. It is not only fore cheap interest rate. I suppose it is also a kind of hedge of
    $100 000 000 000 if $ would go down more against foreign currency.
    Not bad at all! That may bee the case! (smile!)
    25 Apr 2013, 11:44 AM Reply Like
  • Eweball
    , contributor
    Comments (65) | Send Message
     
    When a company suggests it will buy back X amount of stock that doesn't mean they will end up spending all the money they targeted or even half the money. Since they now seem to be following Microsofts model they might want to think about using some of that $145B to buy some outside talent while beefing up their rather puny R&D effort. Buying back stock is not a cure for shrinking margins.
    25 Apr 2013, 01:25 PM Reply Like
  • efuji
    , contributor
    Comments (19) | Send Message
     
    A larger iPhone is a no-brainer and inevitable. Would any manufacturer produce only one size of TV? Of course not. For a 4.8 inch (or larger) iPhone, it should come with a much larger battery and a higher price. Of course it will be heavier too.

     

    How about producing a flip iPhone with a keyboard too (along with a smaller screen? Maybe an Apple headset with video for use while sitting or lying down would also be nice to have with an iPhone that has a small screen (like an Apple flip iPhone or even an iWatch). Apple needs to produce a variety of devices and let the customer decide. Quit arguing about the "perfect" screen size and spend some of that cash on R&D producing parallel designs simultaneously.
    25 Apr 2013, 02:43 PM Reply Like
  • Topcat
    , contributor
    Comments (579) | Send Message
     
    I don't buy the stock of unethical companies that avoid paying U.S. taxes. THIS is the essence of the immorality that has become pervasive in many many companies these days.
    25 Apr 2013, 02:48 PM Reply Like
  • SP5524
    , contributor
    Comments (86) | Send Message
     
    Then you should invest in Samsung. They do not willfully steal others property, they do not have a convicted felon as CEO, and they do not pay groups of people to troll online message boards bashing competitors.
    25 Apr 2013, 03:50 PM Reply Like
  • CatchallInvesting
    , contributor
    Comments (263) | Send Message
     
    Why did the stock appreciate 80% in the 8 months following the passing away of Jobs? They will always make the numbers explain the story. Yet it is as obvious as overbought then and overselling now. How quickly will the $50,000,000,000 take spec driving money out of this market? Daily volume today is 12500000 x405 = 5,000,000,000. 1% is 50,000,000. How many 50s are in those billions? After the money is spent 12% or more of aapl will be back in the box. The selling pressure is facing a defense now.
    25 Apr 2013, 05:09 PM Reply Like
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