Apple CEO Tim Cook: We Have More Money Than We Need
February 24, 2012 8:13 AM
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Cook is wondering what to do with the company's $97.6 billion
There's no doubt that Apple is a cash cow. Just last year, many reports started circulating that the tech giant had
a larger bank account than the U.S. government
, where Apple ended June 2011 with $76.2 billion and the government had $73.8 billion. Now, Apple CEO Tim Cook is saying that the company has more money than it needs.
At the annual shareholders' meeting on Thursday, which is the first since former Apple CEO Steve Jobs' death, Cook tried to determine whether Apple should stop
the way Jobs has been for years, or if it's time to stick a hand in the $97.6 billion cookie jar and pay shareholders a dividend this year.
Apple used to pay shareholders a quarterly dividend, but stopped doing so in 1995 because of Apple's financial hardships. Apple even had to turn to Microsoft for a $150 million infusion around the time that Jobs came back as CEO in 1997.
After those dark times, Jobs held on to every cent that the company made. When the new millennium rolled around, Apple started seeing great success with Macs, Macbooks, iPods/iPod touch's,
. Despite the large amount of cash coming in, Jobs continued pinching pennies.
Now, Jobs has been deceased since October 5, 2011, and Cook is looking to use some of the money that it has because he said "it's more than we need to run the company." The problem is figuring out what to do with the money.
Paying a dividend to shareholders would offer a long-term increase to Apple's stock price because it would lure new investors who only buy shares in companies with a dividend.
However, Apple shareholder Asif Khan of Sugar Land, Texas suggested that Cook not provide a quarterly dividend every three months because it might be misinterpreted by some investors that Apple is losing faith in its ability to continue pushing its stock price higher as the company keeps introducing popular products. Rather, Khan would prefer Apple to pay a one-time divided later this year before the federal tax rate limits dividends to 15 percent.
Apple's stock has soared 50 percent over the past year, producing about $160 billion in shareholder wealth and now has a market value of $480 billion. Shares of Apple rose less than 1 percent to $516.39 at closing yesterday.
Another suggestion of what to do with the cash was to buy Greece, which is currently experiencing a debt crisis, but Cook said Apple is not interested.
The cash cow is only likely to get larger with Apple planning several product and software launches this year. For instance, the
is due to be announced at an event next week, and the
OS X Mountain Lion
operating system is due this year as well.
This article is over a month old, voting and posting comments is disabled
2/24/2012 7:58:22 PM
What don't they make an iCar. Seriously, branching out is not such a bad idea with that much money.
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