5 ms·

Apple's market cap tops $300 billion

48 points by bvi 16y ago

kmfrk 16y ago
Do Apple still have the problem of not knowing what to do with all their money? I recall they had an absurd amount of money lying around that they needed to invest to get some decent returns on.
- protomyth 16y ago
  They've said on various finance calls that they want it available to make some large acquisitions and do the big parts contracts.
  - kmfrk 16y ago
    Interesting, thanks for sharing. I just recall reading articles that made it sound like executives or board members were tearing their hair because of it. Must have been the journalists' mistake.
    - jonhendry 16y ago
      Probably analysts or their ilk tearing their hair out. For Apple, it's probably quite advantageous to be able to essentially pay cash up front for next year's supply of a critical component, pay a partner to build a new plant, etc. At least Apple isn't throwing their money away in stock buybacks like Ballmer.
      - protomyth 16y ago
        It does make it hard for their competition when Apple is able to buy a huge set (sometimes "all available production") of components at a reduced price. I am expecting an iPad price drop on the next version or an iPhone strategy (cheaper old bottom, new bottom, new top). This money allows for the iPod strategy to repeat with the iPad.
- jonknee 16y ago
  They have $25B in cash or short term investments sitting around ($11B in cash or equivalents): http://www.google.com/finance?q=NASDAQ:AAPL&fstype=ii http://www.google.com/finance?q=NASDAQ:AAPL&fstype=ii They have invested pretty heavily in facilities/equipment, growing from $2.8B to $7.2B over the past four years. I'd imagine that's stuff like their giant new data center and partnership agreements in their Asian operations. Where they really bulked up is "Long Term Investments". None four years ago, $25B today (and just $10B last year). Unsure what that would entail...
  - czhiddy 16y ago
    I think they have closer to 50B in the bank. They were definitely north of 40 all of last year.
    - jonknee 16y ago
      Unless Apple lied in their SEC filings and in doing so risked jail time for high level executives, I think you're mistaken. There are different designations for assets, but the "Cash and Short Term Investments" portion is $25B. Cash makes up $11.2B of that total. They have a little over $75B in total assets, which counts some less liquid assets like property and long term investments.
      - xenophanes 16y ago
        Most of their "long term securities" are actually short term by any reasonable meaning of the word. It's just a technical terminology thing for filings that doesn't mean what you assume it means. They have been north of 40 billion for a while. The relevant thing is how much is liquid fast enough to use it for what they want to use it for. For that we should listen to Apple telling us directly (which they have repeatedly done), not just check some field on their govt filings.
        jonknee 16y ago
        > For that we should listen to Apple telling us directly (which they have repeatedly done), not just check some field on their govt filings. Between trusting a company on what they claim and what they actually report, I'd go with what they report. That's what's legally binding. Not that the final result is much different, cash isn't an obstacle in whatever Apple wants to do (and hasn't been in quite some time).
- mcknz 16y ago
  Microsoft had a similar problem, but they solved it by creating an Online Services Division.
  - jsm386 16y ago
    Online Services has consistently lost money but their solution was a one-time dividend of $3/share to all shareholders or $32 billion dollars.
    - steveklabnik 16y ago
      I think the joke was that Online Services pretty much burned up all of their extra money.
      - jsm386 16y ago
        I got the joke. Just pointing out that MSFT did distribute a lot of the cash, which is something that people have started to mention as something Apple might be pressured to do by shareholders.
        radicaldreamer 16y ago
        Steve has said that Apple intends to start acquiring more companies, larger plays rather than small talent acquisitions.
- ThomPete 16y ago
  Do as Richard Branson said when asked how to become a millionaire "Start with a billion, then start an airline company"
- sbisker 16y ago
  I'm not sure what they'd need the higher returns for; it's not like their investors are clamoring for higher dividends. It wouldn't shock me if Apple's policy of not paying cash dividends (in place since 1995) remains only to spite Michael Dell - but it seems unlikely that the policy will change any time soon, and investors seem fine with that. Given that, it's probably in their best interest to keep most of it fairly liquid so they can move on product ideas and acquisitions.
J3L2404 16y ago
Probably just a fad. ;)
eddieplan9 16y ago
Irrelevant, but do you think Facebook is worth 1/6 of Apple?
- tptacek 16y ago
  Paraphrasing Joel Spolsky, every time Facebook figures out a way to make 10 additional pennies from each of its users, it adds a recurring $50MM income to its cash flow. These are apples/oranges comparisons, but Facebook is worth a lot.
  - revorad 16y ago
    Let's do some math based on numbers usually reported: total users 600,000,000 daily visitors 300,000,000 annual revenue $2,000,000,000 average daily revenue $5,479,452 average daily revenue per visitor $0.02 So, unless I've made some serious order of magnitude error, on average they make 2 cents per visitor everyday. Maybe they can make a lot more than 10 additional cents per user per year.
deleted 16y ago
[deleted]

48 points by bvi 16y ago

kmfrk 16y ago

Do Apple still have the problem of not knowing what to do with all their money? I recall they had an absurd amount of money lying around that they needed to invest to get some decent returns on.

protomyth 16y ago
They've said on various finance calls that they want it available to make some large acquisitions and do the big parts contracts.
- kmfrk 16y ago
  Interesting, thanks for sharing. I just recall reading articles that made it sound like executives or board members were tearing their hair because of it. Must have been the journalists' mistake.
  - jonhendry 16y ago
    Probably analysts or their ilk tearing their hair out. For Apple, it's probably quite advantageous to be able to essentially pay cash up front for next year's supply of a critical component, pay a partner to build a new plant, etc. At least Apple isn't throwing their money away in stock buybacks like Ballmer.
    - protomyth 16y ago
      It does make it hard for their competition when Apple is able to buy a huge set (sometimes "all available production") of components at a reduced price. I am expecting an iPad price drop on the next version or an iPhone strategy (cheaper old bottom, new bottom, new top). This money allows for the iPod strategy to repeat with the iPad.
jonknee 16y ago
They have $25B in cash or short term investments sitting around ($11B in cash or equivalents): http://www.google.com/finance?q=NASDAQ:AAPL&fstype=ii http://www.google.com/finance?q=NASDAQ:AAPL&fstype=ii They have invested pretty heavily in facilities/equipment, growing from $2.8B to $7.2B over the past four years. I'd imagine that's stuff like their giant new data center and partnership agreements in their Asian operations. Where they really bulked up is "Long Term Investments". None four years ago, $25B today (and just $10B last year). Unsure what that would entail...
- czhiddy 16y ago
  I think they have closer to 50B in the bank. They were definitely north of 40 all of last year.
  - jonknee 16y ago
    Unless Apple lied in their SEC filings and in doing so risked jail time for high level executives, I think you're mistaken. There are different designations for assets, but the "Cash and Short Term Investments" portion is $25B. Cash makes up $11.2B of that total. They have a little over $75B in total assets, which counts some less liquid assets like property and long term investments.
    - xenophanes 16y ago
      Most of their "long term securities" are actually short term by any reasonable meaning of the word. It's just a technical terminology thing for filings that doesn't mean what you assume it means. They have been north of 40 billion for a while. The relevant thing is how much is liquid fast enough to use it for what they want to use it for. For that we should listen to Apple telling us directly (which they have repeatedly done), not just check some field on their govt filings.
      - jonknee 16y ago
        > For that we should listen to Apple telling us directly (which they have repeatedly done), not just check some field on their govt filings. Between trusting a company on what they claim and what they actually report, I'd go with what they report. That's what's legally binding. Not that the final result is much different, cash isn't an obstacle in whatever Apple wants to do (and hasn't been in quite some time).
mcknz 16y ago
Microsoft had a similar problem, but they solved it by creating an Online Services Division.
- jsm386 16y ago
  Online Services has consistently lost money but their solution was a one-time dividend of $3/share to all shareholders or $32 billion dollars.
  - steveklabnik 16y ago
    I think the joke was that Online Services pretty much burned up all of their extra money.
    - jsm386 16y ago
      I got the joke. Just pointing out that MSFT did distribute a lot of the cash, which is something that people have started to mention as something Apple might be pressured to do by shareholders.
      - radicaldreamer 16y ago
        Steve has said that Apple intends to start acquiring more companies, larger plays rather than small talent acquisitions.
ThomPete 16y ago
Do as Richard Branson said when asked how to become a millionaire "Start with a billion, then start an airline company"
sbisker 16y ago
I'm not sure what they'd need the higher returns for; it's not like their investors are clamoring for higher dividends. It wouldn't shock me if Apple's policy of not paying cash dividends (in place since 1995) remains only to spite Michael Dell - but it seems unlikely that the policy will change any time soon, and investors seem fine with that. Given that, it's probably in their best interest to keep most of it fairly liquid so they can move on product ideas and acquisitions.

J3L2404 16y ago

Probably just a fad. ;)

eddieplan9 16y ago

Irrelevant, but do you think Facebook is worth 1/6 of Apple?

tptacek 16y ago
Paraphrasing Joel Spolsky, every time Facebook figures out a way to make 10 additional pennies from each of its users, it adds a recurring $50MM income to its cash flow. These are apples/oranges comparisons, but Facebook is worth a lot.
- revorad 16y ago
  Let's do some math based on numbers usually reported: total users 600,000,000 daily visitors 300,000,000 annual revenue $2,000,000,000 average daily revenue $5,479,452 average daily revenue per visitor $0.02 So, unless I've made some serious order of magnitude error, on average they make 2 cents per visitor everyday. Maybe they can make a lot more than 10 additional cents per user per year.

deleted 16y ago

[deleted]