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Apple slowdown is OK, but: * They should pay out more in dividends- share the wealth with the owners. * They have been borrowing money for stock buy-backs. T

Apple slowdown is OK, but: * They should pay out more in dividends- share the wealth with the owners. * They have been borrowing money for stock buy-backs. This is weird to me- they could just use their cash to do this. https://www.barrons.com/articles/apple-bonds-stock-buybacks-51659361679 https://www.barrons.com/articles/apple-bonds-stock-buybacks-...

colinmhayes 4y ago
The market generally prefers buybacks over dividends because of the tax advantage. Borrowing money has been much cheaper than repatriating cash up until the last few months.
macintux 4y ago
Borrowing money to buy stocks is cheaper than repatriating their foreign cash. They’re hoping the U.S. will offer another tax holiday for companies hoping to bring that money home.
- hackernewds 4y ago
  Which is why interest rates being so low is a scam. Apple credit rating is also AA+ so they're borrowing at virtual nothing interest. Why use cash you can grow vs use more debt.
purplerabbit 4y ago
Two ideas: 1. If you can borrow at 2 or 3%, it might be worth it to keep cash-on-hand so you can jump on unexpected opportunities that may arrive in the future. 2. Paying dividends makes stock price go down. So it's basically equivalent to deciding to sell a small percentage of shares on behalf of each of your investors. Which is why fewer companies are worrying about dividends
ProfessorLayton 4y ago
It's not weird to borrow money essentially for free, it's actually prudent. This may change if/when interest rates rise, but until then it's more optimal to borrow.
varispeed 4y ago
I think this is where things are wrong. Why should they reward people who do not do work? There is no system in nature, where you put into it the energy once (aka capital) and expect it to work indefinitely (aka dividend). Shareholding should work as loans - where you put money in and expect to get % back in a given timeframe and no more. The reason the system is flawed is that you have workers, who actually produce value, struggle to even rent a place to live (buying is increasingly out of reach) while shareholders have parties on their private jets. Apple shouldn't be paying any dividends and instead of it should pay bonuses to the workers.

colinmhayes 4y ago

The market generally prefers buybacks over dividends because of the tax advantage. Borrowing money has been much cheaper than repatriating cash up until the last few months.

macintux 4y ago

Borrowing money to buy stocks is cheaper than repatriating their foreign cash. They’re hoping the U.S. will offer another tax holiday for companies hoping to bring that money home.

hackernewds 4y ago
Which is why interest rates being so low is a scam. Apple credit rating is also AA+ so they're borrowing at virtual nothing interest. Why use cash you can grow vs use more debt.

purplerabbit 4y ago

Two ideas: 1. If you can borrow at 2 or 3%, it might be worth it to keep cash-on-hand so you can jump on unexpected opportunities that may arrive in the future. 2. Paying dividends makes stock price go down. So it's basically equivalent to deciding to sell a small percentage of shares on behalf of each of your investors. Which is why fewer companies are worrying about dividends

ProfessorLayton 4y ago

It's not weird to borrow money essentially for free, it's actually prudent. This may change if/when interest rates rise, but until then it's more optimal to borrow.

varispeed 4y ago

I think this is where things are wrong. Why should they reward people who do not do work? There is no system in nature, where you put into it the energy once (aka capital) and expect it to work indefinitely (aka dividend). Shareholding should work as loans - where you put money in and expect to get % back in a given timeframe and no more. The reason the system is flawed is that you have workers, who actually produce value, struggle to even rent a place to live (buying is increasingly out of reach) while shareholders have parties on their private jets. Apple shouldn't be paying any dividends and instead of it should pay bonuses to the workers.