Analysts Predict Apple Could Be Sitting on $170 Billion in Cash This Year
March 19, 2013 9:40 AM
comment(s) - last by
Some shareholders want cash returned as a dividend to investors
Apple continues to be incredibly successful in the technology market and one of the most valuable companies in the world. So far this year Apple is sitting on a cash stockpile that amounts to $137 billion. Some
Apple shareholders are upset that the company is sitting on that much cash
and isn't paying out dividends to shareholders.
Moody's Investors Services issued a report this week predicting that Apple’s cash stockpile could grow to as large as $170 billion by the end of 2013. That assumes that Apple doesn't change its philosophy towards dividends and stock buybacks. Apple has been under pressure from a hedge fund manager named David Einhorn and other major investors to return some of that cash to shareholders.
Apple has noted that it is in "active discussions" on returning some of that money to investors but no details were offered. Einhorn is currently
involved in the suit
against Apple that CEO Tim Cook has dubbed "a sideshow."
Moody's wrote, "Unless Apple changes its philosophy towards liquidity/shareholder returns by increasing its $10 billion annual common dividend, or if Apple increases it stock buyback program, we estimate Apple’s cash balances could increase by another $35 billion in 2013 and exceed $170 billion."
When it comes to cash reserves, Apple has roughly twice as much as its closest competitor. Microsoft was sitting on total cash reserves of $68.3 billion as of December 31, 2012. Google is slightly behind with $48.1 billion.
The only non-technology company in the top five biggest cash-rich companies in the United States was pharmaceutical giant Pfizer with $46.9 billion in cash taking the number four spot. Rounding out the top five is Cisco Systems with $46.4 billion in cash.
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RE: There is no "returning"!
3/19/2013 12:43:38 PM
I wont reply again except to say that you are sadly confused. Simply because you signed the dividend agreement as it currently stands doesnt mean you arnt a stakeholder. In fact, the large your share count, the larger your voting position is in drafting the dividend agreements.
Additionally, I believe that the stakeholders here are arguing that they should see the return (ROI) as an increase in stock value, which would be generated by direct investment from cash reserves in growth generating expenditure, or in the form of a higher dividend. Keep in mind both of those things, a higher dividend and/or higher growth spending from cash reserves will push the share price up.
Believe me, "sell your shares if you dont like it" is not an approach the board would look favorably upon. You're essentially inciting a run on Apple stock. When everyone who doesn't like it decides to sell, guess what happens to the market price of Apple stock?
RE: There is no "returning"!
3/19/2013 2:10:03 PM
I'm not sadly confused. What you're saying makes sense, but Apple isn't legally obligated to listen to what you, or anyone else, would do if you were boss at Apple, that's my only point.
Owning public stock doesn't give you a seat on the board.
“Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down!' Screw them. Seriously, screw them. You can quote me on that.” -- Newegg Chief Legal Officer Lee Cheng referencing patent trolls
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