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Apple likey to take on debt

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Apple Is Likely To Take On Debt To Pay Out A Big Dividend, Says Bernstein

Read more: http://www.businessinsider.com/apples-dividend-plan-according-to-bernstein-2013-4#ixzz2QolFPYRJ

Apple is likely to announce its plans for a new, bigger dividend in May, weeks after it announces earnings, says Bernstein analyst Toni Sacconaghi.

Sacconaghi says Apple is talking to large shareholders about how it should distribute its cash. He has spoken with some of the shareholders, and he reported his findings.

We don't have the note, but Philip Elmer DeWitt at Fortune wrote it up.

The key bits:
Shareholders want Apple to return 50% of free cash flow to shareholders on annual basis. This would equal ~$22 billion a year.

If Apple does this, it could lift the stock by $30. If not, the stock could drop by $30.
If Apple does it, it will do it as a dividend.

And if Apple does it, it will probably take on debt to pay the dividend to avoid eating into its U.S. cash, or getting hit with taxes on its foreign cash.


Read more: http://www.businessinsider.com/apples-dividend-plan-according-to-bernstein-2013-4#ixzz2QolI7nPr

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Posted

Debt right now is very cheap, makes sense.

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Posted

damage control news cycle for the dropping stock price?
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[quote name='BajiRav' timestamp='1366292466' post='595644734']
damage control news cycle for the dropping stock price?
[/quote]

Dropping? what do you mean its dropping? *checks price* AHHHHH down 6.08 so far today, below 400 at 396! analysts said this would never happen! they told me apple would be at 900 this year!
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Analyst were thinking it would go over $1000 a share this past year. I think Apples value is over estimated and it shows with the price of their shares falling. With their sales falling and their earnings decreasing I think it is a bad idea to pay out half of their cash. If things get won't they need that money?

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[quote name='BillyJack' timestamp='1366299897' post='595644926']
Analyst were thinking it would go over $1000 a share this past year. I think Apples value is over estimated and it shows with the price of their shares falling. With their sales falling and their earnings decreasing I think it is a bad idea to pay out half of their cash. If things get won't they need that money?
[/quote]

psh no, they just go into debt like any other major company....

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[quote name='BillyJack' timestamp='1366299897' post='595644926']
Analyst were thinking it would go over $1000 a share this past year. I think Apples value is over estimated and it shows with the price of their shares falling. With their sales falling and their earnings decreasing I think it is a bad idea to pay out half of their cash. If things get won't they need that money?
[/quote]Where do you get your facts? Their earnings are not decreasing. They are just growing slower than they were, but it is still a gain year over year. Look it up on any public financial records site.
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[quote name='neufuse' timestamp='1366305353' post='595645116']
psh no, they just go into debt like any other major company....
[/quote]

Taking on debt is fairly common for people with a lot of cash. IIRC, Zuckerberg took out a mortgage for his house, because people are willing to lend them money at insanely low rates now, while the money they have will probably gain more interest in other investments.

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Apple down 11.97 now...

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[size=4][quote name='ILikeTobacco' timestamp='1366306292' post='595645154'][/size]
Where do you get your facts? Their earnings are not decreasing. They are just growing slower than they were, but it is still a gain year over year. Look it up on any public financial records site.
[/quote]
Problem is that they are becoming like Microsoft a decade ago. Their product designs are mostly about slimming down the sizes, upping the specs, and adding a few new features here and there. They have an excellent product line with a great market saturation and ecosystem, but they just aren't innovating as radically as before and are too afraid of backlash if they change what is already working. [size=4]I really think [/size][size=4]OSX and iOS needs a reboot for it to go to next level. [/size]

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[quote name='BetaAddict' timestamp='1366322874' post='595645536']

[size=4]Problem is that they are becoming like Microsoft a decade ago. Their product designs are mostly about slimming down the sizes, upping the specs, and adding a few new features here and there. They have an excellent product line with a great market saturation and ecosystem, but they just aren't innovating as radically as before and are too afraid of backlash if they change what is already working. [size=4]I really think [/size][size=4]OSX and iOS needs a reboot for it to go to next level. [/size]
[/quote]

They need to move on from OSX and move to OS 11 already, I know OSX is basically a brand now, but they need a MAJOR improvement something that is worthy of a full version increment, we've been on 10.x for what 12yrs now?

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[quote name='neufuse' timestamp='1366323312' post='595645546']


They need to move on from OSX and move to OS 11 already, I know OSX is basically a brand now, but they need a MAJOR improvement something that is worthy of a full version increment, we've been on 10.x for what 12yrs now?
[/quote]

Microsoft has kept the Windows branding for longer than that. What does it matter?
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Posted

[quote name='BetaAddict' timestamp='1366322874' post='595645536']
[size=4]Problem is that they are becoming like Microsoft a decade ago. Their product designs are mostly about slimming down the sizes, upping the specs, and adding a few new features here and there. They have an excellent product line with a great market saturation and ecosystem, but they just aren't innovating as radically as before and are too afraid of backlash if they change what is already working. [size=4]I really think [/size][size=4]OSX and iOS needs a reboot for it to go to next level. [/size]
[/quote]That really isn't a problem. They created a bubble and its time to let that bubble burst and see the true growth that has happened. Right now, nobody knows the true value of the company because of the bubble. It is no different than what happened with the recent recession in the US. We had this huge banking and housing bubble that was grossly overpriced and needed to fall back to its true values so it could have healthy growth again. Apple needs this right now to remain a healthy company. Unrestricted growth of a bubble like that is bad news in the long run. Worst case scenario right now is that Apple will have its stock price retract to its true value and Apple turn into a slow grower while it waits for its next breakthrough. There is no money to be made in Apple stocks because its revenue stream is starting to steady. Remember that when a company is not experiencing high growth, the price of the stock amounts to what an invest is willing to pay for $1 of revenue. Because Apple is not expected to grow rapidly in the near future, the stock price will fall to reflect that. It isn't even a bad thing technically for anyone other that the morons that bought stocks when the price was high.

Changes to iOS will not bring about rapid growth which is what they woud need to maintain stock prices this high. The cellphone market will not see any rapid changes anytime soon because the major markets are saturated. OSX is a long shot for rapid growth but you never know I guess. Apple is a bad investment right now, not because its a bad company, but because there is no way to predict another rapid growth for them and for dividends, you can get the same returns from another less pricey company.

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[quote name='Shadrack' timestamp='1366323769' post='595645560']
Microsoft has kept the Windows branding for longer than that. What does it matter?
[/quote]

Branding? no, OSX was a version originally, the brand is still Mac OS X... I am talking about a VERSION not a brand, we have been on version 10 for ever and if you would of actually read what I wrote and comprehended it, I am talking about a major revision to the OS like OS X was to Mac OS... OS9 to OS10 (X) was a major version change...

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Version numbers really mean nothing.
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It still doesn't make sense to me. Why go into debt when you still will half at least half of all that money left.

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[quote name='BillyJack' timestamp='1366299897' post='595644926']
Analyst were thinking it would go over $1000 a share this past year. I think Apples value is over estimated and it shows with the price of their shares falling. With their sales falling and their earnings decreasing I think it is a bad idea to pay out half of their cash. If things get won't they need that money?
[/quote]

The analysts obviously missed that apple is neither the leader in cell phones or desktop computers.
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[quote name='NightScreams' timestamp='1366328296' post='595645722']
Version numbers really mean nothing.
[/quote]

once again..... read what I wrote.... something that is a major change to the OS that would be of enough value to warrant a major version change..... why do we keep trying to get out of the idea by nit picking on the fact that some companies ala google have made version numbers meaningless now days... between Mac OS9 and Mac OS 10 there was a MAJOR OS overhaul, this is what I am talking about... something big, going to BSD was a big change... not saying ditch it now, saying make a big change to the OS

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[quote name='neufuse' timestamp='1366338072' post='595646010']
once again..... read what I wrote.... something that is a major change to the OS that would be of enough value to warrant a major version change..... why do we keep trying to get out of the idea by nit picking on the fact that some companies ala google have made version numbers meaningless now days... between Mac OS9 and Mac OS 10 there was a MAJOR OS overhaul, this is what I am talking about... something big, going to BSD was a big change... not saying ditch it now, saying make a big change to the OS
[/quote]

And? When was Windows "overhauled"? Even in Windows 7 there are dialog boxes with old 16-bit graphic animations...lol. So if Windows is your ruler to judge Mac OS X then one would have to conclude that both Windows and Mac OS are due for some kind of "major overhaul" (I love your vagueness btw...).

OS X is just a brand name. Get over it. There have been a lot of major overhauls in OS X. Christ, the whole thing started on a completely different processor with a completely different instruction set architecture. You seem really confused by the fact that the brand of the OS has been Mac OS X for so long. Would it make more sense to you if every year they came out with Mac OS 2010, Mac OS 2012, etc.?

Anyway, I completely disagree that Mac OS X needs any kind of major overhaul. More features would be nice but it is pretty lean, mean, efficient, and intuitive. What would you overhaul other than the branding :)?

If you have major complaints about the OS, then fine. But it seems like you are just complaining about a brand name. I can think of LOTS and LOTS of brand names to complain about. What do you want exactly? For the terminal to have all new function names, the dock to be COMPLETELY DIFFERENT (omg! that would be killer, huh?) and the menu bar to have a hide feature? What kind of from the ground up are you talking about? Apple is notorious for reworking entire APIs that break old software (as in: major overhaul, what you seem to want and they have but you just won't acknowledge).

Microsoft, on the other hand, bows down to backwards compatibility. What they have done with Windows is a complete opposite of "major overhaul" IMO (which completely has its own set of merits and I admire them for that). More like staple fixing things and tacking things on with relentless patch-after-patch-after-patch-after-please-reboot-again-because-your-time-isn't-important-patch. What's your measure?
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[quote name='Shadrack' timestamp='1366344606' post='595646122']
And? When was Windows "overhauled"? Even in Windows 7 there are dialog boxes with old 16-bit graphic animations...lol. [b]So if Windows is your ruler to judge Mac OS X[/b] then one would have to conclude that both Windows and Mac OS are due for some kind of "major overhaul" (I love your vagueness btw...).

OS X is just a brand name. Get over it. There have been a lot of major overhauls in OS X. Christ, the whole thing started on a completely different processor with a completely different instruction set architecture. You seem really confused by the fact that the brand of the OS has been Mac OS X for so long. Would it make more sense to you if every year they came out with Mac OS 2010, Mac OS 2012, etc.?

Anyway, I completely disagree that Mac OS X needs any kind of major overhaul. More features would be nice but it is pretty lean, mean, efficient, and intuitive. What would you overhaul other than the branding :)?
[/quote]

At what point did he even mention Windows at all? You seem to insist he's using Windows as a standard but was curious where you drew that conclusion?

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[quote name='AWKM' timestamp='1366335784' post='595645964']
The analysts obviously missed that apple is neither the leader in cell phones or desktop computers.
[/quote]Neither one of which are needed for its share price to go up. Do people still believe that share prices are based on magic or something? I remember when those numbers came out and based on P/E and EPS $1000 was the correct valuation without considering other factors. Believe it or not, most current prices on the market make sense, including when Apples were extremely high.

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[quote name='Growled' timestamp='1366334002' post='595645894']
It still doesn't make sense to me. Why go into debt when you still will half at least half of all that money left.
[/quote]It's possible that they expect to take on debt in the new few years and they want to take advantage of the lower interest rates we have now. Those are expected to rise. When they issue the bonds, if they are very long term, 20 years or more, that is likely the reasoning.

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I find this fascinating that they can get a loan to pay off people and get lower taxes in return. The tax system rocks if you are rich as all ****.

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[quote name='moloko' timestamp='1366378732' post='595647086']
I find this fascinating that they can get a loan to pay off people and get lower taxes in return. The tax system rocks if you are rich as all ****.
[/quote]Makes sense if you consider not all of its money is in US dollars. They would be heavily taxed if they converted it to US and then paid it out. It would be taxed more than the interest rate on bonds. Apple could pick up a bond for 5-7% or it can convert the cash and be forced into taxes 10% or more.

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[quote name='Shadrack' timestamp='1366344606' post='595646122']


And? When was Windows "overhauled"? Even in Windows 7 there are dialog boxes with old 16-bit graphic animations...lol. So if Windows is your ruler to judge Mac OS X then one would have to conclude that both Windows and Mac OS are due for some kind of "major overhaul" (I love your vagueness btw...).

OS X is just a brand name. Get over it. There have been a lot of major overhauls in OS X. Christ, the whole thing started on a completely different processor with a completely different instruction set architecture. You seem really confused by the fact that the brand of the OS has been Mac OS X for so long. Would it make more sense to you if every year they came out with Mac OS 2010, Mac OS 2012, etc.?

Anyway, I completely disagree that Mac OS X needs any kind of major overhaul. More features would be nice but it is pretty lean, mean, efficient, and intuitive. What would you overhaul other than the branding :)?

If you have major complaints about the OS, then fine. But it seems like you are just complaining about a brand name. I can think of LOTS and LOTS of brand names to complain about. What do you want exactly? For the terminal to have all new function names, the dock to be COMPLETELY DIFFERENT (omg! that would be killer, huh?) and the menu bar to have a hide feature? What kind of from the ground up are you talking about? Apple is notorious for reworking entire APIs that break old software (as in: major overhaul, what you seem to want and they have but you just won't acknowledge).

Microsoft, on the other hand, bows down to backwards compatibility. What they have done with Windows is a complete opposite of "major overhaul" IMO (which completely has its own set of merits and I admire them for that). More like staple fixing things and tacking things on with relentless patch-after-patch-after-patch-after-please-reboot-again-because-your-time-isn't-important-patch. What's your measure?
[/quote]

good gawd, who ever brought up windows? I am talking about OSX geez, not comparing to ANYTHING I am just saying Apple needs to take it to the next level sheesh

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