Icahn, CalPERS at odds over buyback strategy ahead of shareholders' meeting
The close of the market today, which saw Apple's stock rise $3.80 to close at $512.59, marked the beginning of the company's "ex-dividend" period, where no new trades of AAPL will be included in dividend calculations. Shareholders of record will receive $3.05 per share beginning Thursday, February 13, with the annual shareholders' meeting scheduled to take place two weeks later. The question of how Apple manages its enormous cash hoard has become something of a public spat between two large-volume investors, Carl Icahn and the California Public Employees' Retirement System (CalPERS).
Nearly $3 billion 'returned' to shareholders in latest payout
If you held any AAPL stock as of last Wednesday, your account is going to get a little boost tomorrow. Apple will be paying $3.05 per share to "shareholders of record" as of November 6 in the latest quarterly dividend, which arrives tomorrow and totals nearly $3 billion, a 15 percent rise from the year-ago quarter. While the amount Apple has paid out has gone up over the last few quarters, the company has actually saved billions in stock buybacks.
Increases dividend, renews share repurchase program before analyst meeting
Microsoft has announced it will be raising its quarterly dividend, at the same time as starting a share buyback program. The scheme sees Microsoft authorizing up to $40 billion in share repurchases, with no expiration date set for the program, with the new buyback plan replacing an earlier $40 billion scheme that was set to expire at the end of this month.
Wall Street, government wants more of company's growing cash hoard
Despite moves to buy back shares in itself and the creation of a dividend program, Apple adds money to its enormous cash reserve far faster than it can distribute it -- a problem many companies would like to have, but one that is actually quite thorny for Apple. Wall Street appears to be orchestrating an effort -- or acting on insider information -- to put pressure on the company to make some kind of announcement for a future, additional dispersal of cash to investors. Meanwhile, governments have increased their calls for the "repatriation" of foreign-held profits.
Payout does not keep pace with massive revenue
For most companies, a payout of $2.5 billion dollars (working out to $2.65 per share for each of its 935 million outstanding shares) would be manna from heaven, but for Apple the significant dividend being distributed today -- only the second such payment in the last 17 years -- doesn't even begin to match its ability to generate revenue or add to its cash stockpile. Over the course of fiscal 2013, the company will spend an additional $7.5 billion in dividends, but is likely to finish the year -- or indeed, this quarter -- with more than that amount added to its cash balance.
Stock trading at levels not seen since 1980
Consumer electronics retailer RadioShack reported an unexpected second-quarter loss and said it would stop paying stock dividends. In one day shares have fallen over 33 percent, and are trading at levels last seen in 1980. The stock is down 74 percent this year alone. The decision to suspend the dividend comes after the surprisingly weak earnings announcement coupled with an imminent debt maturity of $375 million due in 2013. Stopping the payment will save the company about $50 million per year.