Tax Reform in This Election Year: It's Not Likely
Which Credit Card Rewards Does the IRS Care About?The New York Times DealBook blog wrote about BusinessWeek writer Arik Hesseldahl's plan for Apple's pile of cash: Apple Inc. (NASDAQ:AAPL) should start a venture capital fund, much like Intel Corp. (NASDAQ:INTC) has done with Intel Capital.
Apple currently has around $12 billion in cash, and adds another billion or so every quarter. Hesseldahl correctly points out that large acquisitions, especially in the tech sector, have a way of not working out as well as planned. Actually, most of them fail miserably.
So the idea of a venture capital fund seems to make sense, particularly because, in addition to the gains that are possible through venture capital, Apple could also fund companies that will increase demand for Apple's products: software companies, companies that make Ipod accessories, and so on.
But here's another idea for Apple's cash hoard. If you own the stock, presumably you believe it's undervalued. So what better investment could Apply make then increasing the company's share buy-back program?
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Reader Comments (Page 1 of 1)
3-04-2007 @ 10:30PM
Morton said...
Share buy-back program is an excellent idea for shareholders who do not sell their shares back to Apple. However, if the shares are undervalued why would anybody sell them? Under the Warren Buffet theory, shareholders should buy and hold which is what I am doing. I think that Apple should also start paying dividends so that all shareholders would benefit.
Morton
3-05-2007 @ 3:20PM
gslv said...
What do you think are the chances of Apple starting to pay regular dividends? Isn't that the conventional thing? This venture capital idea sounds like socialism - give your money to us, you don't deserve it, the rest of us do.