Asymco’s Horace Dediu has been doing some number-crunching on AAPL’s cash stockpile, which sat at around $120B before the company began paying dividends and initiated a share buyback scheme two years ago. He calculates that, had nothing changed, Apple would now be sitting on around $210B in cash.
To put that into perspective, there are only about a dozen companies in the world Apple wouldn’t have been able to buy outright for that amount.
Despite the $53B spent on buying its own shares and the $21.5B paid out in dividends, the continuing flow of profits into the company means that Apple today still has about the same amount of cash it did two years ago. The share purchases themselves have proven a good deal for Apple as their value has increased.
Dediu also wryly comments on the ‘Apple is doomed’ sentiment voiced by some analysts based on ‘only’ linear growth, noting that while that “might be seen as evidence of failure, it’s more useful to treat this vast quantity as a recognition of past successes.”
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Ben. One thing that you did not mention is that the shares that have been bought by Apple have appreciated in value significantly.
Indeed – a point worth adding, thanks
i agree, the stock is close to surpassing it’s all time high, I’m sure this is very much due to the fact that Apple bought back so much of it’s own stock.
There also isn’t much you can’t buy with $120B vs. $210B.
Life is hard all over /S
Yet even through all this Apple’s P/E has barely improved over companies which have put in far less effort into sorting out their fundamentals. It appears Wall Street’s confidence in Apple’s future potential hasn’t improved very much at all. It’s hard to understand why linear growth seems like a bad thing for a company of Apple’s size. One would think Apple is the ultimate of where most businesses would want to be but Wall Street only sees Apple as the end of the line leading to ultimate death.