from the could-give-$33-to-every-single-person-in-the-world dept.
https://arstechnica.com/apple/2017/05/apple-has-a-record-250-billion-in-the-bank/
When it reports its quarterly financial results on Tuesday, Apple will likely have a quarter-trillion dollars in cash in the bank.
That's a greater hoard than any other company in recent US history, according to The Wall Street Journal, which reported the numbers on Sunday. For comparison, Apple's cash pile exceeds the market value of Walmart and Procter & Gamble. The sum is more than the foreign cash reserves of the UK and Canada combined.
Some 93 percent of the company's cash and other liquid assets are kept overseas. The Trump administration has proposed a tax holiday to encourage companies to bring money back to the US, as well as a lower corporate tax rate, fueling more speculation about how Apple will use its money. Apple CEO Tim Cook has said he's interested in moving some of the company's cash stateside if tax conditions are right.
The article speculates about Apple buying another company, such as Tesla, Netflix, or Walt Disney.
From the WSJ article:
Mr. Cook has been somewhat more accommodating of shareholder desires than his predecessor. He started a dividend-and-stock-buyback program in 2012 that has since sent more than $200 billion to shareholders. And he has invested more in some areas, such as R&D.
But the CEO also stared down Carl Icahn in 2013 and 2014 when the activist investor bought a stake in Apple and demanded it increase buybacks. And Apple remains frugal in other realms, such as marketing. It spent less than $1.8 billion on advertising last year -- not even half the amounts laid out by smaller rivals Alphabet Inc. and Amazon.com Inc., according to company filings.
Apple also avoids large acquisitions. It bought at a rate of 15 to 20 companies a year over the past four years, generally spending several hundred million dollars on companies it can easily assimilate. Its biggest deal was the $3 billion it spent to buy Beats Electronics LLC in 2014.
The swelling war chest has fueled hopes for bigger deals to vault Apple in new directions such as self-driving cars and entertainment. At Apple's 2015 shareholder meeting, one investor asked Mr. Cook about buying Tesla Inc., which today is valued around $51 billion. The CEO didn't directly respond.
(Score: -1, Flamebait) by Anonymous Coward on Tuesday May 02 2017, @08:49AM (2 children)
Apple barely qualifies as a tech company anymore. What has Tim Cock invented lately? He's certainly not investing his company's shamefully enormous pile of money into any research or development. Maybe big Timmy Cock is planning to start his own church and beatify himself?
(Score: 0) by Anonymous Coward on Tuesday May 02 2017, @10:00AM (1 child)
> What has Tim Cock invented lately
Are you implying Apple invented things? Or that Steve Jobs was an "inventor"? Give me a break.
(Score: 0) by Anonymous Coward on Tuesday May 02 2017, @05:23PM
Yes, Apple invented things like the Apple II computer, the LaserWriter printer, the Macintosh computer, and Classic MacOS.
All of those things were invented before the year 2000. What has Apple done lately? Intel based PC clones running BSD are not innovative.
Apple isn't advancing the state of the art anymore. Time for Apple to die.
(Score: 3, Funny) by looorg on Tuesday May 02 2017, @09:09AM (12 children)
Is there a McDuck-like vault somewhere in the new complex where Cook can take his daily swim(s)?
(Score: 0) by Anonymous Coward on Tuesday May 02 2017, @10:04AM
Cook is ensuring his cash infusion will be sufficient to stave it off a few extra years relative to Jobs :)
(Score: 2) by The Mighty Buzzard on Tuesday May 02 2017, @10:36AM (10 children)
Sounds amusing but I expect they do like every other rich person/business do when they have cash they don't want to directly invest and put it in the bank and it ends up in your pocket for new cars and houses and such via the fractional reserve loan system.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Tuesday May 02 2017, @01:45PM (9 children)
That's a quaint image from It's a Wonderful Life, but that's not how fractional reserve works at all. If it worked like that, it wouldn't be evil.
(Score: 2) by The Mighty Buzzard on Tuesday May 02 2017, @05:28PM (8 children)
I didn't go into detail but yes, it is absolutely how fractional reserve works. They can only loan out money in proportion with money actually deposited into their keeping, so large deposits most certainly do matter to everyone.
My rights don't end where your fear begins.
(Score: 2) by sjames on Tuesday May 02 2017, @06:48PM (7 children)
Not really. Perhaps you haven't noticed, banks now pay crap interest and don't even bother to extol the virtues of saving today like they did back when savings were turned around into loans. These days, savings mostly get used to buy and sell stocks on margin. Loans get pooled and then re-divided into junk paper fraudulently rated and then sold on the market.
(Score: 2) by The Mighty Buzzard on Tuesday May 02 2017, @07:13PM (6 children)
Doesn't matter what the rich people do with loans made. What matters if you're middle class or lower is that they're made. Otherwise no house/car for you.
My rights don't end where your fear begins.
(Score: 2) by sjames on Tuesday May 02 2017, @07:17PM (5 children)
Sure, but it does mean that apple's McDuck sized money pile can't be said to be doing anyone here any good.
(Score: 2) by The Mighty Buzzard on Tuesday May 02 2017, @07:30PM (4 children)
No, no it doesn't. If every last trader margined themselves to the moon and back, they still couldn't account for a tenth of what's deposited in our fractional reserve banking system. The vast majority of this nation's fictitious wealth is tied up in home, car, and business loans, with student loans (don't get me started) being way, way behind.
My rights don't end where your fear begins.
(Score: 2) by sjames on Tuesday May 02 2017, @09:21PM (3 children)
The problem is that the banks loaned out funny money but expect real money to be paid back.
(Score: 2) by The Mighty Buzzard on Tuesday May 02 2017, @10:31PM (2 children)
That's not a problem. Only existing on paper money spends the same as folding money for any major purpose. Better for some even.
My rights don't end where your fear begins.
(Score: 2) by sjames on Wednesday May 03 2017, @02:49AM (1 child)
And if I print perfect counterfeits, those spend the same as folding money too. Funny how it's only legal when the banks do it.
(Score: 2) by The Mighty Buzzard on Wednesday May 03 2017, @11:03AM
Ain't it though? Don't get to mistaking me for a fractional reserve cheerleader. I'd prefer people only ever worked with real money but for all its faults it does have its good points as well.
My rights don't end where your fear begins.
(Score: 2) by bradley13 on Tuesday May 02 2017, @11:15AM (6 children)
Two things I do not understand:
- Apple pays taxes abroad, following international law, probably through a tangle of international subsidiaries. These subsidiaries are wholly owned by Apple, their money has been taxed, so...why can they not transfer it to a US bank account, if that's what they want?
- Normally, when companies make money in excess of their foreseeable expenses, they pay dividends to their shareholders. Why is Apple not doing this? Keep reserves, sure. Sitting on that much money like Scrooge McDuck really doesn't make a lot of sense.
Everyone is somebody else's weirdo.
(Score: 2) by Aiwendil on Tuesday May 02 2017, @01:24PM
Probably would have a better ROI to just buy the bank ;)
But a bit more serious - having it spread among several countries and jurisdictions lowers risk (both regarding exchange rates and legal spats - it is harder to seize foreign assets)
(Score: 2) by Phoenix666 on Tuesday May 02 2017, @02:01PM
They do pay dividends. Not enough to bring the pile of cash down, but they do.
Washington DC delenda est.
(Score: 2) by deimtee on Tuesday May 02 2017, @02:14PM (1 child)
They pay taxes at that countries tax rate. Usually some nice little island somewhere that makes a living taxing $multi-billions at 1% or so. If they send that money back to the USA it gets taxed at USA rates (minus the pittance they paid overseas).
If the shareholders wanted dividends, they could vote for them. With interest rates as low as they are, having Apple hold your cash is probably as good as putting it in a bank. There are also differences between capital gains (valuable shares because Apple$$$) and income (dividends), but then it gets complicated.
If you cough while drinking cheap red wine it really cleans out your sinuses.
(Score: 0) by Anonymous Coward on Tuesday May 02 2017, @02:27PM
Yikes! Your estimation is off by two orders of magnitude!
1% would be 200 times more of the 0.005% that actually pay
(Score: 0) by Anonymous Coward on Tuesday May 02 2017, @02:22PM
Apple pays taxes abroad
Yes, apparently a whole whopping 0.005% tax on its global profits [cnn.com]. Less than the taxes paid by any deadbet on social care.
(Score: 0) by Anonymous Coward on Wednesday May 03 2017, @05:00AM
Apply 'paying taxes' is rather misleading. They pay a fraction of 1 percent of taxes on their foreign earned income (0.005% was the figure in 2014) through a variety of legally grey practices that the EU is now stating are not legally grey, but illegal.
I'm rather tired of the "rules for thee, but not for me" state of economics in the US. I'm a US citizen that lives abroad. I haven't stepped foot in the US in over a decade. Nonetheless, I'm legally required to pay upwards of 30% tax to the US for services I do not and cannot receive. The only way to escape this for me is breaking the law or revoking my citizenship. And revoking my citizenship would cost an enormous pile of money as well. If I tried to engage in "legally grey" tax avoidance come evasion I'd have a major risk of ending up behind bars. When Apple does it, the biggest risk they have is a fine which will likely be a small fraction of the profits they earned from said illegal activity.
I'm not arguing along the lines of, "Well if it's bad for me - it should be bad for everybody." But imagine if individuals were treated like corporations. Yeah, just engage in tax avoidance, come evasion, as long as you want. If you face legal troubles, you'll need pay a percent of your net profit from said behavior - but never enough to ever harm you in any way, since you as an individual are of course too small to fail. And if you refuse to pay your tax for long enough, it's really not a big deal. Eventually we'll get a president and congress that will go ahead and try to dramatically cut your tax obligation (of course with ex post facto effect) to try to "incentivize" you to do so.
It's just all so broken and unfair.
(Score: 3, Insightful) by inertnet on Tuesday May 02 2017, @11:35AM
Their products are overpriced. And you don't even own them. And you've created another powerful monster that will hopefully stay benign.
(Score: 0) by Anonymous Coward on Tuesday May 02 2017, @02:16PM (1 child)
and make all the shareholders citizens
If that's cheaper than paying US taxes, then is something wrong with US taxes?
(Score: 2) by bob_super on Tuesday May 02 2017, @05:23PM
At the usual cost of cruise ships, why buy a fixed country when you can build a mobile one?
Base a few thousand workers in international waters, pay no tax.
Note for scale: Apple's unbelievably huge hoard of cash is less than half the Pentagon's annual budget.
(Score: -1, Offtopic) by Anonymous Coward on Tuesday May 02 2017, @02:20PM
So what is the lower threshold for using the descriptors for the next three orders of magnitude up? We've got a quarter here. Is it ok to say "an eighth of a trillion"? When does it cross from hyperbole to absurdity? My personal limit is half, but why not instead say "one-percent of a trillion" where one was only going to say "ten billion"? Maybe Trump should talk about his proposed "seven hundred million hundred dollar" wall while the opponents can talk about the proposed "seven-percent of a trillion dollar" wall.
(Score: 1, Insightful) by Anonymous Coward on Tuesday May 02 2017, @02:37PM (6 children)
From tfa,
> At Apple's 2015 shareholder meeting, one investor asked Mr. Cook about buying Tesla Inc., which today is valued around $51 billion. The CEO didn't directly respond.
Why fool around with a grossly overvalued company? Remember, Tesla market cap passed Ford (and GM?) recently. If Cook wanted to get into the car business, why not buy one of the real car companies with engineering, styling, factories and dealers all around the world.
For that matter, most of the other car companies (except Toyota??) would be even cheaper and they all have many more resources than little Tesla. Based on the image that Apple presents, wouldn't BMW be a better match?
(Score: 2) by bob_super on Tuesday May 02 2017, @05:18PM (5 children)
BMW would match their customers, but they are not for sale (special legal status keeps German control)
Ferrari would match their marketing, but not their volumes.
Tesla would match their tech ideals, but they committed the unforgivable sin of opening their patents ...
Jaguar, maybe? Prestigious brand with major outsourcing connections...
(Score: 2) by Nerdfest on Tuesday May 02 2017, @06:02PM (3 children)
There are a lot of people who would not buy a Tesla if Apple owned the company.
(Score: 2) by fyngyrz on Tuesday May 02 2017, @06:25PM (2 children)
Yes, but there are a lot of people who would buy a Tesla because Apple owned the company.
That's one of the reasons why Apple has all that money in the bank.
(Score: 0) by Anonymous Coward on Tuesday May 02 2017, @08:24PM (1 child)
yep, it's a pitiful thing that people are such ignorant slaves that apple is so successful. It says a lot about the shitty education around the world too if people are so dumb.
(Score: 3, Insightful) by fyngyrz on Tuesday May 02 2017, @09:22PM
You are mistaken if you think that's the only reason Apple is successful.
I'm very happy with, and productive using, my Mac, which is a 12/24 core, 3 GHz, 64 GB tower with four big drives. I've got one ethernet port tied directly to my SDR, and the other on the LAN->WAN. I have lots of bright, clear, accurate monitors, a great keyboard and mouse, a raft of cool USB stuff, fabulous audio, the system is very stable, and I have all the software I need to do cross-platform development of some seriously high-performance applications. Apple made most of that happen, and made the rest possible.
Is "just because it's Apple" sufficient? No. And I whole-heartedly agree, if that's all you have, you don't have much, or perhaps, anything. But Apple has (okay, had, in the case of the Mac Pro) things to offer that have value to some of us. That includes iOS and OS X / macOS and their respective application ecologies. It's not all "Apple customers are stupid", no matter how much you'd like it to be.
(Score: 0) by Anonymous Coward on Wednesday May 03 2017, @01:14AM
I'm sure you are correct that, on paper, BMW is not for sale. On the other hand, if Cook made the right offer to the controlling Quandt family, that paper might be conveniently forgotten? For just one link, https://en.wikipedia.org/wiki/Herbert_Quandt#Post-war_business_activities [wikipedia.org] Judging from a very small sample of people I know that have recent BMWs, the cars could use a big dose of quality control--these are very nice cars but they are in the shop all the time.
Someone else mentioned JaguarLandRover (JLR) which is now owned by Tata, from India https://en.wikipedia.org/wiki/Jaguar_Land_Rover [wikipedia.org] I think the bosses at Tata like owning a chunk of British luxury. Turnabout is fair play?
(Score: 2) by pkrasimirov on Tuesday May 02 2017, @08:48PM
I think Tim waits for the next bubble burst to go shopping en-masse for tech companies and market share.