Apple Reveals Plans for its $100 Billion Cash Pile

by Matt Klassen on March 20, 2012

Apple held a conference call yesterday to lay out its plans for the $100 billion of excess revenue that’s been burning a hole in the company’s rather large pocket for some time now.

Instead of building a giant Scrooge McDuck-esque money bin to house this ever-growing pile of cash however, in distinctly un-Apple-like fashion the Cupertino tech giant has decided to spend some of its $100 billion, and spend it on something it truly believes in…itself. More to the point, Apple has committed to spending some of its hordes of cash on paying dividends to shareholders and on a share repurchase plan to be executed over the next several years.

What makes this move un-Apple-like, you may ask? Only that from a company known for its cutting edge technology, it’s so predictable, unimaginative, and generally unhelpful to anyone but Apple that it could have spewed forth from the standard playbook of any accounting firm hack. Of course this begs the question, what else could Apple have spent its money on?

Truth be told, Apple has never been a ‘giving’ company, demonstrating no desire to help the world, to advance humanity’s overall understanding, or even treat the workers along its vital supply lines by humane standards. So perhaps the news that Apple is looking to pay quarterly dividends to its dedicated shareholders at $2.65 per share is a bit of a surprise (more of a surprise being that Apple is now one of the largest divident payers in the country), since Apple has always had a cocky air about itself, like shareholders should just be glad they’re on board with the world’s most profitable tech company.

But that being said, what strikes me as interesting is Apple’s concomitant strategy to repurchase share from the very stockholders its now paying dividends to, a plan that Apple has committed $10 billion dollars to over the next few years.

By paying dividends to its shareholders Apple is making its stock infinitely more attractive, meaning potential investors would be willing to pay a premium knowing they’re buying a secure stock that has a regular payout. Now to make those stocks available to new investors, Apple is simply looking to buy them back, likely to resell them at an even higher price in the future or simply hold on to them as an investment in itself.

But with $100 billion of disposable income lying around, what else could Apple have done with the money? You may be surprised to know that in America $100 billion is a bit of a financial oddity, with everything from building valuable infrastructure, to curing obesity, to curbing the influx of illegal aliens striking that magical total. But all that aside, what could Apple really use the money for?

For starters, how about solving the employment standards crisis overseas, it would cost a lot less than $100 billion and would do wonders for restoring dignity to a large group of people. If that’s not to Apple’s liking (and it sure seems not to be) how about investing in general technology development, something like Google’s X development facility, a think tank of future technological advancement? Surely Apple has enough money to hire some people to sit around a room and dream really big dreams. I mean, with its current marketing force it’ll surely have no problem convincing us to buy into those dreams when they come to market.

In the end, Apple could have done a great deal of good with this money, choosing instead of help its own, to line its own pockets, and to continue ignoring the rest of the world.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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