3 ms·

I agree with the parent - no way would Apple want to do a massive acquisition. I also agree with the grandparent, Apple is unlikely to part with its cash soon.

I agree with the parent - no way would Apple want to do a massive acquisition. I also agree with the grandparent, Apple is unlikely to part with its cash soon. All the cash is Apple's "war chest" - it's let them do innovative things with their supply chain (prepay for ~$1bn in parts to get a substantial discount), it's let them fight a massive patent battle (we'll see if this pays out), and gives them all sort of flexibility moving forward. Could they do all of the above things with less than $100bn in the bank? Of course, but the massive cash hoard allows them to continue doing the activities above, even if sales/growth slow down.

rdl 15y ago
Normally what you'd do at a mature company in a mature industry (oil, finance, etc.) is pay out 10-30% of your earnings, one or two times per year (or maybe quarterly). Apple would still keep (and keep adding to) its war chest. Wall Street does heavily penalize companies which have started paying dividends if they ever cut the dividend (or end it), much more than it rewards companies for paying the dividend in the first place. It's tricky -- tax policy (which does change over time), earnings, other uses of capital, and market expectations, all change.