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Apple to talk fate of $97.6b cash balance in Monday call

updated 06:50 pm EDT, Sun March 18, 2012

Apple hints it may spend cash hoard in near future

Apple in a rare mid-Sunday release sent word that it would discuss what it planned to do with its $97.6 billion cash reserve. CEO Tim Cook, along with CFO Peter Oppenheimer, would discuss the "outcome of the Company's discussions" in a call at 9AM Eastern on Monday, March 19. Apple would offer the discussion both as a phone call and as a live stream with replays available for two weeks afterwards.

The company has been actively discussing what to do with its stockpile in recent months. Its lack of spending has drawn mounting criticism, especially as it has become an unusual exception even among other companies that prefer to save money rather than spend it. Investment analysts have regularly complained that Apple should offer a dividend payout to shareholders despite the stock being the largest in the world as well as one of the fastest growing.

The firm has been historically averse to spending its money for all but moderate- to small-sized acquisitions. Some of this has been attributed to the late Steve Jobs; while he seldom discussed it directly, many believe that he saw what had happened to Apple in his absence as a sign that his company needed a cash buffer in the event of a sudden drop in market share, an economic crisis, or another factor that might kill another company. Some have speculated that Cook as his replacement wasn't beholden to this view.

No guarantees exist that Apple will pay a dividend or otherwise roll the money back towards shareholders. The company has generated record returns solely through record quarterly results. Many of those companies that take pride in quarterly or yearly dividends, such as Microsoft, perform comparatively poorly both in the stock market and in real competition.



By Electronista Staff
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Comments

  1. Jeronimo2000

    Forum Regular

    Joined: Aug 2001

    +6

    What to do with $97.6 billion

    I'd probably buy a couple of countries, just for the fun of it.

  1. efithian

    Fresh-Faced Recruit

    Joined: Apr 2004

    -6

    Stock Purchase

    Last week Tim Cook cashed in $11M worth of AAPL after taxes. I see that as a sign that a dividend is coming soon, where the stock price goes down.

  1. Jubeikiwagami

    Fresh-Faced Recruit

    Joined: Dec 2011

    +3

    Place an ad

    On every newspaper on the planet, full page ad that says "google/Schmidt - You Suck". Or how about one that says "Hey Mickey here is what your said we should do with our stock - NOT" so much more you can do with nearly 100B.

  1. DeepDish

    Forum Regular

    Joined: May 2001

    +3

    blasphemy

    I am going to say this even though deep down inside I know it's a bad idea.

    But this weekend Adobe CS has been driving me crazy.

    So out of frustration, I say buy Adobe.

    Last weekend MS Office was driving me crazy, so my answer would of been different.

  1. jwdsail

    Fresh-Faced Recruit

    Joined: Jun 2000

    +6

    Long term

    I'd like to see Apple secure rare-earth mining mineral rights...

    The prices for these raw materials needed for the production of just about everything they make will only go up in coming years. Securing a supply of these raw materials would be a good long-term move by Apple.

  1. aristotles

    Grizzled Veteran

    Joined: Jul 2004

    -4

    Give me a few million

    I want to start a charity to help fight homelessness in larger cities in Canada. I would partner with other groups to lead people into drug and alcohol treatment programs and job training opportunities.

  1. Paul Huang

    Mac Enthusiast

    Joined: Sep 1999

    +3

    More than half of the...

    97B are outside of the US, so it's going to stay the course: nothing changes.

  1. SierraDragon

    Mac Elite

    Joined: Mar 2004

    +12

    Do not change.

    Apple's heavy cash reserves impact many things, not the least of which is dealmaking of all kinds.

    If it ain't broke don't fix it.

  1. tsmelker

    Fresh-Faced Recruit

    Joined: Feb 2006

    +10

    I agree with Sierra...

    Dont mess with the cash reserve- it enables Apple to continue doing what it does- make kick-a** products that just work, without worrying about sales-killing concepts like market-share or current buying trends. Microsoft is in the mess it's in because it has to keep producing products en mass just to survive. Apple is like the ultimate Artistic endeavor- they can make beautiful products and release them when they feel like it, instead of rushing poorly tested, ugly c*** out the door just to cash in on what it thinks the public wants. The $97 Billion is the perfect emergency fund- which, as every prudent and forward thinking company knows, is just good business sense. Perhaps the current government should take a few pages form Apple's financial playbook, instead of debt-spending us into oblivion.

  1. chas_m

    Moderator

    Joined: Aug 2001

    +6

    Don't really care

    I kinda hope Apple will resist stockholder pressure not NOT give a dividend ... first of all, they're making MORE than enough money off the stock itself, and secondly, you really REALLY don't want to give those people ANY feeling of power over the board. The AAPL stockholders are already QUITE obnoxious enough as it is.

    Whatever it is they decide to do, I hope they will keep a fair portion in reserve to protect against hostile takeovers. Apple NEEDS to remain independent to do what they do.

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