4 ms·

Why does apple hoard cash instead of buy back their stock? 5 years ago they had 90 billion cash in hand. If they put that into their stock then, It would be up

by asdff 4y ago

Why does apple hoard cash instead of buy back their stock? 5 years ago they had 90 billion cash in hand. If they put that into their stock then, It would be up at least 260% by now even with the losses last year, then if they need cash they could just take a loan against the stock.

deleted 4y ago
[deleted]
arockwell 4y ago
They actually have done massive stock buybacks. The company is just an incredible money printer.
- matwood 4y ago
  As is often said, 'Toyota volume with Ferrari margins'.
dpkirchner 4y ago
Looks like they spent a lot more than that on buybacks in the past decade: > Since 2012, Apple has been buying back its own shares at an extraordinary rate -- Apple is known for spending more on share repurchases than similar tech giants like Meta or Alphabet. Apple's total share repurchases have totaled $274.5 billion, with just $20.4 billion in the December quarter. > Apple spent $85.5 billion to repurchase shares in 2021, and issued $14.5 billion in dividends. https://appleinsider.com/articles/22/04/28/apple-extends-share-buybacks-by-90b-raises-dividends-by-10/amp/ https://appleinsider.com/articles/22/04/28/apple-extends-sha...
BbzzbB 4y ago
Apple's buyback program probably has no equal, it's a sight to behold which demonstrates the power of sustained share repurchases. Sure, there are the Teledyne stories, but to do it at this scale is something else. https://www.macrotrends.net/stocks/charts/AAPL/apple/shares-outstanding https://www.macrotrends.net/stocks/charts/AAPL/apple/shares-...
- tasuki 4y ago
  Agreed, but that chart is misleading: the number at the bottom should be 0, not 14. The reduction in outstanding shares is from 26.5 to 16, which is still impressive, but perhaps less than the chart might make you believe at first sight.
  - BbzzbB 4y ago
    Well yes you have to read the axis, it's not any less impressive that a >$2T company shrunk outstanding shares by 40% this late in it's history.
danaris 4y ago
Setting aside the fact (pointed out by several siblings) that they do buy back stock... Why should they? Who does it benefit? Not their customers. Not their products. Not their future prospects. Not their employees, for the most part. ...Oh, the shareholders? You mean they should throw massive amounts of money—their hedge against future problems—into enriching people who are, for the most part, already vastly wealthy?
- Gerardo1 4y ago
  Thank you for saying this. Massive stock buyback programs are a symptom of and contributor to a disconnected market.
- abduhl 4y ago
  What else should they do with it? Just hold it so that they can hedge against future problems? How much do they need for a hedge? 1 year of expenses? 2 years? 5 years? What should they do once they reach your hedge number? Just keep hoarding? What do you do with your salary? Do you just put it in your bank account or do you invest it? If I’m Apple, do I really want to become a company with an investment arm? If I’m an Apple shareholder, do I really want Apple buying a broad market index fund and then paying corporate taxes on that and then spitting off dividends to me rather than just giving me the opportunity to invest in a broad market fund myself?
- microtherion 4y ago
  I'm not super enthusiastic about stock buybacks, but to my knowledge, pretty much 100% of Apple employees are eligible for the discounted Employee Stock Purchase Program (which is a no-lose proposition, if you can afford to defer part of your salary for 6 months), and at least in some years, all Apple employees got some outright stock grants, so the interests of "employees" and "shareholders" may be more aligned than you make them out to me.
thomasahle 4y ago
> then if they need cash they could just take a loan against the stock. When companies buy back stock, they typically cancel it. That's why the price goes up so much of the remaining stock held by shareholders. So they wouldn't be able to "just take a loan against the stock". It no longer existed. All they'd be able to do is to ask ask their investers for more money.

by asdff 4y ago

deleted 4y ago

[deleted]

arockwell 4y ago

They actually have done massive stock buybacks. The company is just an incredible money printer.

matwood 4y ago
As is often said, 'Toyota volume with Ferrari margins'.

dpkirchner 4y ago

Looks like they spent a lot more than that on buybacks in the past decade: > Since 2012, Apple has been buying back its own shares at an extraordinary rate -- Apple is known for spending more on share repurchases than similar tech giants like Meta or Alphabet. Apple's total share repurchases have totaled $274.5 billion, with just $20.4 billion in the December quarter. > Apple spent $85.5 billion to repurchase shares in 2021, and issued $14.5 billion in dividends. https://appleinsider.com/articles/22/04/28/apple-extends-share-buybacks-by-90b-raises-dividends-by-10/amp/ https://appleinsider.com/articles/22/04/28/apple-extends-sha...

BbzzbB 4y ago

Apple's buyback program probably has no equal, it's a sight to behold which demonstrates the power of sustained share repurchases. Sure, there are the Teledyne stories, but to do it at this scale is something else. https://www.macrotrends.net/stocks/charts/AAPL/apple/shares-outstanding https://www.macrotrends.net/stocks/charts/AAPL/apple/shares-...

tasuki 4y ago
Agreed, but that chart is misleading: the number at the bottom should be 0, not 14. The reduction in outstanding shares is from 26.5 to 16, which is still impressive, but perhaps less than the chart might make you believe at first sight.
- BbzzbB 4y ago
  Well yes you have to read the axis, it's not any less impressive that a >$2T company shrunk outstanding shares by 40% this late in it's history.

danaris 4y ago

Setting aside the fact (pointed out by several siblings) that they do buy back stock... Why should they? Who does it benefit? Not their customers. Not their products. Not their future prospects. Not their employees, for the most part. ...Oh, the shareholders? You mean they should throw massive amounts of money—their hedge against future problems—into enriching people who are, for the most part, already vastly wealthy?

Gerardo1 4y ago
Thank you for saying this. Massive stock buyback programs are a symptom of and contributor to a disconnected market.
abduhl 4y ago
What else should they do with it? Just hold it so that they can hedge against future problems? How much do they need for a hedge? 1 year of expenses? 2 years? 5 years? What should they do once they reach your hedge number? Just keep hoarding? What do you do with your salary? Do you just put it in your bank account or do you invest it? If I’m Apple, do I really want to become a company with an investment arm? If I’m an Apple shareholder, do I really want Apple buying a broad market index fund and then paying corporate taxes on that and then spitting off dividends to me rather than just giving me the opportunity to invest in a broad market fund myself?
microtherion 4y ago
I'm not super enthusiastic about stock buybacks, but to my knowledge, pretty much 100% of Apple employees are eligible for the discounted Employee Stock Purchase Program (which is a no-lose proposition, if you can afford to defer part of your salary for 6 months), and at least in some years, all Apple employees got some outright stock grants, so the interests of "employees" and "shareholders" may be more aligned than you make them out to me.

thomasahle 4y ago

> then if they need cash they could just take a loan against the stock. When companies buy back stock, they typically cancel it. That's why the price goes up so much of the remaining stock held by shareholders. So they wouldn't be able to "just take a loan against the stock". It no longer existed. All they'd be able to do is to ask ask their investers for more money.