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Apple's Soaring Pile Of Cash
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jepzilla
11/11/09

In reply to Apple's Soaring Pile Of Cash
That's... not good. Sure, some cash is important for operational purposes, but not $34B. If they don't have some spectacular purpose in mind, that money should be invested or returned to shareholder in a special dividend (like Microsoft did to its famous warchest after its legal liabilities went away).
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Edited by jepzilla at 11/11/09 7:55 PM jepzilla was starred jepzilla was unstarred

JacquesAss
11/11/09

@jepzilla: As mentioned in the "CEO of the Decade" article, that downward slope from 12/96 to 9/97 was heading rapidly to the X-axis - bankruptcy.

I would expect Apple to use this cash for something more productive than financial holdings once the worldwide economy turns around. If you are a shareholder (and I am), you shouldn't be upset that Apple is sitting on a big pile of cash when financing is hard to come by and short-term financial investments have a large potential upside.

It's not like the CFO put the cash under his bed and refuses to let Apple have it back... #chartoftheday
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Don Nguyen promoted this comment JacquesAss was starred JacquesAss was unstarred

Don Nguyen
11/11/09

@jepzilla: If I was a shareholder I would rather Apple keep the cash (as long as I kept a good return) in a bid to keep stability later on down the line. Have them invest it in good R&D with a longer term picture in mind.
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Edited by Don Nguyen at 11/11/09 8:14 PM Don Nguyen was starred Don Nguyen was unstarred

jepzilla
11/11/09

@Don Nguyen: The point is, Apple shareholders are getting basically no return on that $34B right now. It's cash, that means it's almost certainly not getting a good real return. $34B in cash is money that's NOT being spent on R&D. I agree, they should invest it in good R&D. Hire some more engineers and start working on new products, or build a research lab, or do venture funding or something.
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Edited by jepzilla at 11/11/09 8:25 PM jepzilla was starred jepzilla was unstarred

jinushaun
11/11/09

@jepzilla: Have you been following Apple's stock for the past year or so? They're basically recession proof. I think shareholders, like myself, are doing just fine. #chartoftheday
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tande04
11/11/09

@jepzilla: Right they need to do something with it.

Its sitting there now. I'm sure they've got it in some great stuff that I could only dream of having similar returns but its not being used.

$34 billion is a lot. A lot is an understatement. Its the GNP of a small country.

Yes, financing is tough to come by in this economy. What are they going to have to finance for $34 billion though?
Its very, very similar to the money just sitting under Steve's bed. #chartoftheday
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tnt-tek: I'd like some corn nuts
11/11/09

@jinushaun: Nothing and no one is recession proof. Apple has the same kind of investor ride Google was getting after it's IPO. Apple = profitable but shares are trading between 45 and 60x P/E. That and your not getting a dividend. It makes me wonder why they are charging such a premium to hold their stock and what they plan on doing with that stockpile. If it's not a big acquisition, $34B is WAY too much money to have on the sidelines... It makes me wonder if they're waiting for some inevitable FTC anti-trust smack-down for the iTunes/iPhone/iPod ecosystem... #chartoftheday
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COCOViper
11/11/09

@jepzilla:
During recessions cash is king. Especially now when liquidity is hard to come by, it gives Apple complete freedom on how to run their business.

Agreed that 34B is a lot, but not for a company with the growth like Apple. #chartoftheday
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frigg
11/11/09

@tnt-tek: I'd like some corn nuts: Apple's P/E is 32, not 45 -60X. I just googled it. #chartoftheday
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