Yes, I have to agree with Gizmodo when they describe Apple's sudden announcement that they are going to hold a special and sudden conference call to highlight what it will do with its vast holdings of cash, some $98 billion of it!
The Apple call, to be held at 9 a.m. EDT (1300 GMT) has already resulted in Apple's stock, in early after hour trading, to go up by a whopping $13.75, or some 2.35% per share, as of this writing.
When it comes to the world's richest company, its CEO, Tim Cook has already previously stated:
“I’d be the first to admit we have more cash than we need to run the daily business. So we’re actively discussing it. I only ask for a bit of patience, so we can do it in a way that’s best for the shareholders.”
I'm not sure exactly what they will announce, of course, but what ever it is, well I just hope they don't blow it. Share holders have been demanding a dividend for some time now, or at the very least they would like to see Apple make some kind of stock buy back, but I'm hoping it does neither. If they do spend money, however, I hope they make and announce some significant acquisitions, and who knows, maybe even a super, duper and major acquisition, like I dunno .... how about buying out Samsung, AMD, or even Intel, etc.?
As far as the stock buyout option goes, well Reuters is reporting that according to Shaw Wu, analyst with Sterne Agee, when it comes to that, well he states:""
"........ the value to shareholders of a stock buyback would be more questionable: "The issue with (a) buyback is that the payback for investors is not as tangible. With a dividend, you get a check in the mail."
"Wu doubted there would be a stock split, saying it would be more difficult for Apple to beat consensus earnings forecasts."
According to the smart money, Apple will either do a:
- Dividend (either one-time or regular or combination of both)
- Stock buyback (one-time, regular, or combo)
In conclusion, I actually like the last option the best .... doing nothing! Basically, I like the idea of Apple simply keeping its huge cash horde and holding on to it for a rainy day. For one thing, that pile of cash ... and the bigger the better.... gives Apple some pretty major options that other companies can only dream of about, like making major acquisitions, or investing in significant R&D, or, quite frankly, simply giving it the power to crush its competition legally if ever it needed to, such as is the current patent war raging between itself and Android!
And that's my 2 cents 4 this sunny Monday, March 19, 2012
Apple logo via: Gizmodo