aapl605
Apple's share price today closed above $600 for the first time, hitting new highs after hours as well. It's been a busy day for Apple shareholders, with the pre-trading announcement that the company will be initiating a strong quarterly dividend and has authorized $10 billion share buyback program.

After the final bell, Apple announced that the company moved more than 3 million new iPads in the first four days of eligibility, making the new iPad the fastest selling tablet in the world.

AAPL closed at $601.10, an all-time high, and nearly reached $605 in after hours trading. Apple should report earnings for the first calendar quarter in late-April, after reporting record earnings and sales for the holiday quarter.

Top Rated Comments

dejo Avatar
158 months ago
AAPL stock was up 2.65% the same day they announced a $2.65 dividend. Ooh, freaky!
Score: 5 Votes (Like | Disagree)
cvaldes Avatar
158 months ago
You still don't understand cash flow, do you?

Look, after everything they did, Apple added about $38 billion in cash to its hoard last year.

Let's say that Apple's profits remains the same over the next three years (unlikely) and they use $15 billion each year for the dividend/share buyback program. They would still be adding $23 billion each year. Today's $98B hoard would end up being over $165B in March 2015, even after the $45B program ended.

Also, Apple is likely buying components with foreign cash, not U.S. domestic cash. Remember that despite all of Apple's strategic component pre-purchases, they are still growing cash.

You need to understand that repatriating cash back to the USA is particularly expensive tax-wise.

Remember that the share buyback program is there to prevent share dilution from RSUs. In the next few years, some senior Apple executives are going to see their option incentives become available to exercise. If Apple doesn't buy back shares, they would have to issue new ones, which would dilute the value of the existing shares. Apple grants options to many employees for excellent performance, etc. (they're called the "golden handcuffs" for good reason), but those shares have to come from somewhere. Many senior management team members were granted options as an incentive for them to stay with the company, especially after Steve died. Basically, Apple promised these execs a pile of money in the future without saying where it was going to come from. Now they said "we going to use some of our cash now and set it aside for when that day comes."
Score: 3 Votes (Like | Disagree)
Eatsleepdrivesc Avatar
158 months ago
Go Apple! Thats a lot of new IPads!
Score: 3 Votes (Like | Disagree)
cvaldes Avatar
158 months ago
The dividend allows AAPL to be included in a certain class of investments that require dividend payouts like income mutual funds. This will probably decrease decrease trade volatility in the long run.

Note that the dividend payout is tiny and really doesn't stop AAPL from being a growth stock.

The $40B dividend and share buyback program (over three years) is less than the cash flow projections, so Apple would end with even more cash anyhow since they are spending cash slower than they are accumulating it.

Even by purchasing real estate, developing new facilities, making strategic component purchases, acquiring companies, Apple still isn't spending as much as it makes.

They probably looked at this several times and decided that a hundred billion dollars in the piggy bank was enough for them to operate their business effectively plus provide a safety net for bad times.

As an AAPL investor, I'm fine with a few dividends, but that's not what I was hoping for when I bought these shares. I never expected AAPL to be an income stock.

It's not like Apple is giving up capital growth by providing equity income. There's still plenty of growth potential in Apple.
Score: 2 Votes (Like | Disagree)
Wild-Bill Avatar
158 months ago
Oops. Wrong thread
Score: 1 Votes (Like | Disagree)
SuperCachetes Avatar
158 months ago
Here's a quote from a poster in another forum. I agree with the point their making.

The poster you are quoting clearly does not understand where Apple's cash comes from and that it isn't static going forward. :rolleyes:
Score: 1 Votes (Like | Disagree)

Popular Stories

Provenance Emulator

PlayStation, GameCube, Wii, and SEGA Emulator for iPhone and Apple TV Coming to App Store

Friday April 19, 2024 8:29 am PDT by
The lead developer of the multi-emulator app Provenance has told iMore that his team is working towards releasing the app on the App Store, but he did not provide a timeframe. Provenance is a frontend for many existing emulators, and it would allow iPhone and Apple TV users to emulate games released for a wide variety of classic game consoles, including the original PlayStation, GameCube, Wii,...
Delta Feature

Delta Game Emulator Now Available From App Store on iPhone

Wednesday April 17, 2024 9:58 am PDT by
Game emulator apps have come and gone since Apple announced App Store support for them on April 5, but now popular game emulator Delta from developer Riley Testut is available for download. Testut is known as the developer behind GBA4iOS, an open-source emulator that was available for a brief time more than a decade ago. GBA4iOS led to Delta, an emulator that has been available outside of...
iPad Air 12

12.9-Inch iPad Air Now Rumored to Feature Mini-LED Display

Thursday April 18, 2024 7:37 am PDT by
The rumored 12.9-inch iPad Air that is expected to be announced in May will be equipped with a mini-LED display like the current 12.9-inch iPad Pro, according to Ross Young, CEO of research firm Display Supply Chain Consultants. The existing 10.9-inch iPad Air is equipped with a standard LCD panel, and the move to mini-LED technology for the 12.9-inch model would provide increased brightness for...
iPhone 15 Pro Action Button Translate

All iPhone 16 Models to Feature Action Button, But Usefulness Debated

Tuesday April 16, 2024 6:54 am PDT by
Last September, Apple's iPhone 15 Pro models debuted with a new customizable Action button, offering faster access to a handful of functions, as well as the ability to assign Shortcuts. Apple is poised to include the feature on all upcoming iPhone 16 models, so we asked iPhone 15 Pro users what their experience has been with the additional button so far. The Action button replaces the switch ...