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> to repatriate much of its overseas cash and invest it here in the US. Where in the article does it state that they will invest the repatriated cash in the US
by pg314 9y ago
> to repatriate much of its overseas cash and invest it here in the US.
Where in the article does it state that they will invest the repatriated cash in the US? The only concrete number is the $38 billion tax payment upon repatriation, which is a direct result of the tax plan. If you read carefully they state nowhere how much of the repatriated cash will be invested instead of simply returned to shareholders. They just added up what they were already planning to invest anyway in the next 5 years. It might have increased slightly with the tax cuts, but not a whole lot. They weren't constrained by cash before, only by meaningful investment opportunities.
Keep an eye on their quarterly and yearly reports to get the real story. I expect a large chunk of the repatriated cash will be used to pay off the debt they took on to finance past dividends and share repurchases. The rest will be used for future share buybacks.
- vasilipupkin 9y agoWell, if it's simply returned to the shareholders, then the shareholders will invest it. Economy wide it makes no difference, the money will be invested
- pavlov 9y agoWhat makes you think they’ll invest it in the US? Rich person/fund X will get a larger dividend than before, and they’ll invest in the same way as before. It’s not like this money is somehow earmarked. If giving more money to the rich were the solution to America’s problems, it would have worked by now.
- vasilipupkin 9y agoit shouldn't matter where they invest it. investing it in the US when the optimal thing to do is to invest it elsewhere is bad overall, regardless of which entity is doing the investing. World economy is not a zero sum game.
- pg314 9y ago> then the shareholders will invest it. Or use it for consumption. And that consumption or those investments are not necessarily in the US. Where do you think that money is now? It's not like it is stored as dollar bills in some warehouse abroad. The 'repatriation' they are talking about is purely an accounting/tax fiction. If you look at Apple's yearly report [1], on page 49, it details how its cash and equivalents are invested. Most of it is in US treasury securities ($42 billion) and commercial securities ($131 billion). Repatriating it will not magically make it somehow more productively invested in the US. In some cases, quite the opposite: as a foreign Apple shareholder, any dividends I receive are spent outside the US. [1] http://investor.apple.com/secfiling.cfm?filingid=1628280-16-20309 http://investor.apple.com/secfiling.cfm?filingid=1628280-16-...
- vasilipupkin 9y agowell, that money does belong to shareholders. if they choose to spend it rather than invest it, that means they saw no good investment opportunities. Spending in that case is the optimal thing to do anyway rather than for apple to hoard it.