Thanks to propitious timing and its triple-A credit rating, Apple paid just 0.45% on three-year notes, 1% on five-year notes, 2.40% on 10-year notes, and 3.85% on 30-year bonds last April. "We may see a huge company tomorrow that we want to acquire, or something may happen in the stock market that's unpredictable," he added.Īpple also has been opportunistic in other forms of financial engineering, notably in raising some $17 billion last year, in what was then a record corporate-bond offering near the nadir in bond yields. And while Cook has responded to critics, such as Carl Icahn, who want Apple to return some of that excess cash to shareholders, the CEO told the Wall Street Journal that he wanted to keep some dry powder. To be sure, Apple is sitting on a cash pile of $160 billion that's earning today's ultralow interest rates. (BRK.A) has never paid a dividend while the Oracle of Omaha reckons he can put the money to work more profitably.
"We are betting on Apple," he said, adding, "It means that we are really confident on what we are doing and what we plan to do."Ĭorporate-finance textbooks say companies should return cash to shareholders, either through dividends or share repurchases, if they can't find investment opportunities that will return more than the cost of capital. He called the buybacks, which are part of a previously announced $60 billion repurchase program, a sign of confidence. 28, so he wanted to be "aggressive" and "opportunistic" in accelerating the stock-repurchase program.Ĭook pointed out that Apple has bought back $40 billion of its shares over the past 12 months, which he asserted was a record for any company over such a period. Cook allowed that he was surprised by the 8% drop on Jan. Last week, Cook told The Wall Street Journal that the company bought back $14 billion of its shares after they swooned last month in reaction to its disappointing results. Where Apple has given ground in technological innovation, it has stepped up its prowess in financial engineering.
Ifinance hml android#
While the lawyers fight it out in court, Android phones have grabbed the largest share of the smartphone market and, in a symbolic development, Google Friday became the second-largest company in terms of stock-market value, behind Apple and overtaking (GOOG) Android operating system, whose imitation Apple doesn't take as a sincere form of flattery.
More recently, however, Apple's products have been overtaken by competitors, notably phones and tablets using
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