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They actually are doing pretty large buybacks though: https://www.barrons.com/articles/tech-giants-have-ramped-up-stock-buybacks-apple-is-the-champ-51619780412

They actually are doing pretty large buybacks though: https://www.barrons.com/articles/tech-giants-have-ramped-up-stock-buybacks-apple-is-the-champ-51619780412 https://www.barrons.com/articles/tech-giants-have-ramped-up-... Apple recently $77B in buybacks, Alphabet $8.5B, Facebook $3.9B

dalbasal 5y ago
True, but I don't think buybacks are likely to be scaled sufficiently to solve the "problem." Apple, maybe. They do have a dividend paying history and they don't like to spread. The Alphabet & FB buybacks represent about 5% of those companies' cash reserves... not enough to change anything. Apple have $200bn, though I'm not sure if this is net or gross of the buyback. I think of these buybacks more as supporting evidence to what I said previously. There is a hell of a lot of "what are you going to do with all this cash" pressure on these companies. That said $77bn (I've seen $90bn reported) is a truly stupendous sum. Has there ever been a buyback at this scale?
- totalZero 5y ago
  Apple does the largest buyback in the equity markets. Their derivative-based ASR is larger than the entire buyback program of many major companies. https://s2.q4cdn.com/470004039/files/doc_financials/2021/q2/Q2'21-Return-of-Capital-Timeline.pdf https://s2.q4cdn.com/470004039/files/doc_financials/2021/q2/... At $77B, that buyback program amounts to a $300m bid for Apple stock every trading day....much to the delight of executives whose compensation is tied to share price performance. https://www.cnbc.com/2020/09/29/apple-ceo-tim-cook-receives-first-major-stock-grant-since-2011.html https://www.cnbc.com/2020/09/29/apple-ceo-tim-cook-receives-...
aero-glide2 5y ago
They could have used that $77B to fund fusion research, carbon capture research, build private space stations and put man on Mars, but no they wanted to make their already high share price even higher.
- golergka 5y ago
  It's a decision someone can make with their own money. Not money of their shareholders.
- dalbasal 5y ago
  In fairness, it is impressively large.
- bravo22 5y ago
  the investors who get the money back through share buybacks can do that with the 77B. There is no reason for Tim Cook to be leading fusion research and everything else you listed.
- ajpkco 5y ago
  The $77B didn't vanish, it went back to shareholders. Indeed Apple could have used it to fund fusion research, but this seems like a complete stretch of their expertise and capacity to execute on a project like that, the money could just have ended up being wasted on projects that went nowhere. Shareholders can cash out, the government tax the capital gains, and both entities can use the cash in the investments that seems worthy to them
  - jonny_eh 5y ago
    It went to ex-shareholders.
- darkwizard42 5y ago
  Actually a better way to think about it is that they are compensating their shareholders... That $77B that is now returned to shareholders can be spent on whatever those shareholders want. It isn't really Apple's money to begin with... kind of the issue with being a public company. Unless of course its shareholders would look at that investment as sound, which might be a stretch given Apple's lack of background in any of those fields (maybe carbon capture given they have a great understanding of their supply chain and could already be thinking of ways to reduce their energy impact)
igravious 5y ago
One of these things is not like the others.

dalbasal 5y ago

True, but I don't think buybacks are likely to be scaled sufficiently to solve the "problem." Apple, maybe. They do have a dividend paying history and they don't like to spread. The Alphabet & FB buybacks represent about 5% of those companies' cash reserves... not enough to change anything. Apple have $200bn, though I'm not sure if this is net or gross of the buyback. I think of these buybacks more as supporting evidence to what I said previously. There is a hell of a lot of "what are you going to do with all this cash" pressure on these companies. That said $77bn (I've seen $90bn reported) is a truly stupendous sum. Has there ever been a buyback at this scale?

totalZero 5y ago
Apple does the largest buyback in the equity markets. Their derivative-based ASR is larger than the entire buyback program of many major companies. https://s2.q4cdn.com/470004039/files/doc_financials/2021/q2/Q2'21-Return-of-Capital-Timeline.pdf https://s2.q4cdn.com/470004039/files/doc_financials/2021/q2/... At $77B, that buyback program amounts to a $300m bid for Apple stock every trading day....much to the delight of executives whose compensation is tied to share price performance. https://www.cnbc.com/2020/09/29/apple-ceo-tim-cook-receives-first-major-stock-grant-since-2011.html https://www.cnbc.com/2020/09/29/apple-ceo-tim-cook-receives-...

aero-glide2 5y ago

They could have used that $77B to fund fusion research, carbon capture research, build private space stations and put man on Mars, but no they wanted to make their already high share price even higher.

golergka 5y ago
It's a decision someone can make with their own money. Not money of their shareholders.
dalbasal 5y ago
In fairness, it is impressively large.
bravo22 5y ago
the investors who get the money back through share buybacks can do that with the 77B. There is no reason for Tim Cook to be leading fusion research and everything else you listed.
ajpkco 5y ago
The $77B didn't vanish, it went back to shareholders. Indeed Apple could have used it to fund fusion research, but this seems like a complete stretch of their expertise and capacity to execute on a project like that, the money could just have ended up being wasted on projects that went nowhere. Shareholders can cash out, the government tax the capital gains, and both entities can use the cash in the investments that seems worthy to them
- jonny_eh 5y ago
  It went to ex-shareholders.
darkwizard42 5y ago
Actually a better way to think about it is that they are compensating their shareholders... That $77B that is now returned to shareholders can be spent on whatever those shareholders want. It isn't really Apple's money to begin with... kind of the issue with being a public company. Unless of course its shareholders would look at that investment as sound, which might be a stretch given Apple's lack of background in any of those fields (maybe carbon capture given they have a great understanding of their supply chain and could already be thinking of ways to reduce their energy impact)

igravious 5y ago

One of these things is not like the others.