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Apple likey to take on debt


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#1 vetneufuse

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Posted 18 April 2013 - 12:33

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

Read more: http://www.businessi...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.businessi...4#ixzz2QolI7nPr


#2 bdsams

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Posted 18 April 2013 - 12:43

Debt right now is very cheap, makes sense.

#3 BajiRav

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Posted 18 April 2013 - 13:41

damage control news cycle for the dropping stock price?

#4 OP vetneufuse

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Posted 18 April 2013 - 14:11

damage control news cycle for the dropping stock price?


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!

#5 BillyJack

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Posted 18 April 2013 - 15:44

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?

#6 OP vetneufuse

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Posted 18 April 2013 - 17:15

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?


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

#7 ILikeTobacco

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Posted 18 April 2013 - 17:31

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?

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.

#8 threetonesun

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Posted 18 April 2013 - 17:43

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


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.

#9 OP vetneufuse

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Posted 18 April 2013 - 18:53

Apple down 11.97 now...

#10 BetaAddict

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Posted 18 April 2013 - 22:07


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.

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. I really think OSX and iOS needs a reboot for it to go to next level.

#11 OP vetneufuse

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Posted 18 April 2013 - 22:15

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. I really think [size=4]OSX and iOS needs a reboot for it to go to next level.


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?

#12 Shadrack

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Posted 18 April 2013 - 22:22

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?


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

#13 ILikeTobacco

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Posted 18 April 2013 - 23:18

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. I really think [size=4]OSX and iOS needs a reboot for it to go to next level.

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.

#14 OP vetneufuse

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Posted 18 April 2013 - 23:32

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


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...

#15 NightScreams

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Posted 18 April 2013 - 23:38

Version numbers really mean nothing.



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