4 ms·

The expectation of a larger dividend is what has been driving the share price up recently (which is why it will probably fall today). I don't know where that e

by nikcub 15y ago

The expectation of a larger dividend is what has been driving the share price up recently (which is why it will probably fall today). I don't know where that expectation came from. First Apple had the problem of repatriating international funds, so this was never going to be a $30, $50 or $100 (some crazy estimate) dividend. Second all precedent from similar companies issuing a first dividend (well not first for Apple, but first for the 'new' Apple) such as Microsoft and Cisco is 1-2%. I don't think the buyback will be very effective, not against the bigger dividend expectation. 1.8% is about par. I am surprised they didn't split the stock. Question now is how far the stock will fall today before picking back up again later on as yield-focused funds buy into the new action.

csomar 15y ago
It's actually trading +1.67% (pre-market).
- nikcub 15y ago
  which is up on Fridays close but down a few points on the highs reached in after-market over the weekend (~609). get a better sense a bit after the markets open and then at the end of the day today. this news should be a disappointment, but nothing about the hysteria around AAPL surprises anymore.
  - csomar 15y ago
    The day ended. Apple closed on +2.6% over $600 for the first time.
smackfu 15y ago
For MSFT, they started dividends in Feb 2003, but then did a huge one time dividend in Nov 2004, $3.08 / share or about 11% of their stock price at the time. So there is precedent for tech companies issuing large dividends to get rid of cash stockpiles.
- nikcub 15y ago
  thats right, forgot about that special dividend. they also announced a huge buyback at that time as well. here it is http://www.microsoft.com/presspass/press/2004/jul04/07-20boardpr.mspx http://www.microsoft.com/presspass/press/2004/jul04/07-20boa... I think their stock has been pretty flat since, and the dividend increases haven't done much to stimulate the price. Edit: btw, is this you in the MF thread about it? :) http://ask.metafilter.com/11657/Why-Will-Dividend-Make-Microsoft-Stock-Price-Fall-By-Dividend-Amount http://ask.metafilter.com/11657/Why-Will-Dividend-Make-Micro...
  - smackfu 15y ago
    Haha, yep, that's me. I even owned the stock at the time. And yes, the stock was flat for the next 3-4 years, at which point I sold it and it continues to be flat.
  - InclinedPlane 15y ago
    The dividend and buyback has been an attempt to mitigate the stock price flatness problem. It's a very serious issue for the company, especially at the employee level (what's the use of stock grants and options if they have no value beyond mere cash payments?
    - smackfu 15y ago
      On the other hand, employee options are actually hurt by dividends since the option holder takes the price hit on their outstanding options, but does not receive the dividend value.
      - tedunangst 15y ago
        Market options are sometimes adjusted for exceptional dividends, but I don't know about employee options.
- sliverstorm 15y ago
  a huge one time dividend in Nov 2004, $3.08 / share or about 11% of their stock price at the time. That's what I don't get about the excitement over this dividend. It's like 0.5% of the cost of a share.
brown9-2 15y ago
I don't think you can really point to any one single reason why Apple's stock has been driven up so far lately with any sort of confidence. The market is not always rational when it comes to individual stocks.
- snowwrestler 15y ago
  There's probably a good argument to made that it could be higher. Their P/E is somewhere around 16, compare to around 20 for Microsoft. Does anyone really think Microsoft is going to grow faster than Apple in the near future? I think the recent stock bump has basically been the market realizing that despite growing very fast, Apple's stock price still hasn't kept up with real revenue growth.
  - aforty 15y ago
    I'd say that + overall market moving upwards + the anticipation of a stock buyback and/or stock dividend. I don't think we can attribute all this growth to any one thing.

by nikcub 15y ago

csomar 15y ago

It's actually trading +1.67% (pre-market).

nikcub 15y ago
which is up on Fridays close but down a few points on the highs reached in after-market over the weekend (~609). get a better sense a bit after the markets open and then at the end of the day today. this news should be a disappointment, but nothing about the hysteria around AAPL surprises anymore.
- csomar 15y ago
  The day ended. Apple closed on +2.6% over $600 for the first time.

smackfu 15y ago

For MSFT, they started dividends in Feb 2003, but then did a huge one time dividend in Nov 2004, $3.08 / share or about 11% of their stock price at the time. So there is precedent for tech companies issuing large dividends to get rid of cash stockpiles.

nikcub 15y ago
thats right, forgot about that special dividend. they also announced a huge buyback at that time as well. here it is http://www.microsoft.com/presspass/press/2004/jul04/07-20boardpr.mspx http://www.microsoft.com/presspass/press/2004/jul04/07-20boa... I think their stock has been pretty flat since, and the dividend increases haven't done much to stimulate the price. Edit: btw, is this you in the MF thread about it? :) http://ask.metafilter.com/11657/Why-Will-Dividend-Make-Microsoft-Stock-Price-Fall-By-Dividend-Amount http://ask.metafilter.com/11657/Why-Will-Dividend-Make-Micro...
- smackfu 15y ago
  Haha, yep, that's me. I even owned the stock at the time. And yes, the stock was flat for the next 3-4 years, at which point I sold it and it continues to be flat.
- InclinedPlane 15y ago
  The dividend and buyback has been an attempt to mitigate the stock price flatness problem. It's a very serious issue for the company, especially at the employee level (what's the use of stock grants and options if they have no value beyond mere cash payments?
  - smackfu 15y ago
    On the other hand, employee options are actually hurt by dividends since the option holder takes the price hit on their outstanding options, but does not receive the dividend value.
    - tedunangst 15y ago
      Market options are sometimes adjusted for exceptional dividends, but I don't know about employee options.
sliverstorm 15y ago
a huge one time dividend in Nov 2004, $3.08 / share or about 11% of their stock price at the time. That's what I don't get about the excitement over this dividend. It's like 0.5% of the cost of a share.

brown9-2 15y ago

I don't think you can really point to any one single reason why Apple's stock has been driven up so far lately with any sort of confidence. The market is not always rational when it comes to individual stocks.

snowwrestler 15y ago
There's probably a good argument to made that it could be higher. Their P/E is somewhere around 16, compare to around 20 for Microsoft. Does anyone really think Microsoft is going to grow faster than Apple in the near future? I think the recent stock bump has basically been the market realizing that despite growing very fast, Apple's stock price still hasn't kept up with real revenue growth.
- aforty 15y ago
  I'd say that + overall market moving upwards + the anticipation of a stock buyback and/or stock dividend. I don't think we can attribute all this growth to any one thing.