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This is right. Though it's not that there is nowhere to spend the money, it's that the company believes there is nowhere that would generate a better return tha
by joshdickson 11y ago
This is right. Though it's not that there is nowhere to spend the money, it's that the company believes there is nowhere that would generate a better return than just buying back part of the company and the money earns nothing in the bank due to low interest rates. Apple has spent a truly staggering amount of money on buybacks, money which it could have, for instance, used to buy Tesla, Spotify, etc. Even after investing in major new product areas (watch, cars), they still have more cash than they will ever realistically need.
- eru 11y agoIf Apple's shareholders want to hold Tesla stock, they can just buy it via the money Tesla gave to them via the buybacks. They don't need Apple sitting in the middle.
- joshdickson 11y agoThat's not how an acquisition works. It's not about Apple shareholders wanting to hold Tesla stock, it's about Apple potentially wanting to own the company, and that results in Tesla shareholders receiving Apple stock at whatever the agreed upon price is. Apple would not just become an equity investor and buy some Tesla stock, it would assume control of the company.
- eru 11y agoAnd how would that extra layer of management be good for shareholders?