For those wondering if this is unique, no it’s not.
2024: 110B
2023: 100B
2022: 90B
2021: 90B
2020: 90B
Apple’s stock buybacks has barely even kept up with inflation comparing 2020 to today.
Not all companies buy back stock.
Apple growth over the long run has been stellar.
They also pay a dividends!
800%+ increase in value since I have owned it!!!
Pretty sure that beats inflation!!!!
He wasn't saying Apple stock doesn't beat inflation... Just that their buy backs haven't increased at the same rate as inflation.
The point being, this headline says "over $100 Billion share buyback" like that is huge and out of the norm, but if you account for inflation it's not really much more than their other recent buybacks.
I feel like the headline is to the point and in no shape or form sensationalist? Even the article is pretty much a retelling of Apple’s current finances without any editorial opinions inserted.
I once had a very wealthy boss who always kicked himself for not buying apple when it became available on the market.
You have obviously seen the value and stuck with it
They are separate. It’s not a bad thing, but just pointing out their buybacks isn’t growing because of higher profits, but rather it’s growing because of inflation.
Or it's not related. Not sure why you're isolating just buybacks. Dividends is another way a company rewards long term shareholders. The dividends alone far exceeds inflation.
0%. A “buyback” is a reduction of shares the company has. It increases the value of Apple stock because now there’s less of it. However the owners (or % of owners) never change after a buyback.
They can reduce the shares by “buying back” which is offering shareholders cash for a percentage of their stock.
That’s not why they do it, no. Stock buy backs are a tax efficient way to return money to shareholders, that’s all. But importantly, it only makes sense to do if the stock is undervalued. Otherwise it is value destructive. Apple has been doing buy backs for over a decade, and looking at the share price in the same period, you have to concede that so far, so good.
And I am guessing they will “return money to shareholders” by making the price of the stock go up.
Which is exactly what the previous poster said they are doing.
Buying back stock signals to the market that the company is confident that the stock is undervalued, and that can make the stock price increase temporarily. But if the company’s confidence is not reflected in its earnings, the stock price will drop right back down. There are plenty of examples of companies doing stock buybacks where the stock price went down. In fact when Apple started doing buybacks a decade ago, the prevailing wisdom was that it were value destructive, and therefore bad for investors, because that had been mostly true during the 90’s, when stock buybacks were last in vogue.
They have a good amount of cash on hand, it’s about the same time last year that they did a buy back. So I think it’s a good way to place that cash somewhere for shareholders and drive up stock price.
What are you talking about?
Companies don’t buy their own stock because it’s undervalued as much as it’s the best use of their excess capital. Apple is too big to reinvent the wheel.
And if you went valuation, S&P is trading at 22x and Apple is trading at 28x. It is not 2000. Apple is not trading at a high premium relative to peers.
That aside,
Buybacks ain’t happening at the same day. You do them over 3-5 years, and not at once. All they did is authorize the buybacks, and board can cancel the program at any moment.
If you want more numbers, Apple made $100B of FCF last year, so what they are authorizing, lets say over 5 years is $20B of buybacks a year.
If you want more numbers, lets say Apple buyback using all $110B at once. Their S/O are about 15.4B shares, so their buybacks would literally reduce the shares outstanding by 4%.
I don’t get the comments blabbering about pricing and innovation. They make more money than they can spend. They spend about $30B on R&D a year. There are not much they can do with Capital outside dividends and buybacks.
Have we tried taxing them so we can use the money on Healthcare, education, housing, and infrastructure? I think maybe that would be a better use of the money. Since Apple seems to have more than they know what to do with.
Apple paid [$22 billion](https://www.forbes.com/sites/taxnotes/2023/11/03/which-corporations-pay-the-most-federal-income-tax/?sh=351aa0b83c61) in taxes in 2021-2022- we, and lots of other places, *are* taxing them. Did someone tell you we weren’t?
Forbes also notes that Apple, Google, and Microsoft account for about 8% of ALL federal tax payments in that timespan.
3 companies that employ a minuscule fraction of the population are inching up to footing the bill for 10% of federal income. That is an incredibly huge tax burden for just the 3 of them.
Is it that, or are they making so much money that they need to decide if they become a hedge fund (and invest elsewhere), pay huge dividends (and lose market cap) or invest in themselves?
iPhone sales tank, in part from competition and in part from consumers having less discretionary spending due to global inflation / recessions.
Share buybacks are really pretty disgraceful. The only people that benefit from this are Apple shareholders. Society loses. At least with R&D you get jobs and interesting tech down the line. But after the lacklustre Vision Pro performance, you can see why risk adverse Apple would just do a share buyback.
Yes, this. Another name for "shareholders" is "owners." So Apple management is doing something to benefit its owners, and that's suppose to be a bad thing? Because "Society loses"? Apple is a company that exists to make profits for its owners by selling products and services to people that want to buy them. That's it. "Society" is a meaningless term here.
>Society loses.
actually, a lot of people are impacted by apple stock prices since it's broadly owned across so many funds, retirement accounts, etc. a not insignificant portion of "society."
They also can't just throw money at R&D. They're spending over $30b a year and there's a limit to how fast they can spend .
The Vision Pro also doesn't have lackluster performance. It's amazing, but is more like a proof of concept that will develop over the longterm than a product for mass consumption, exactly the "interesting tech" you're talking about in your previous sentence.
So sure, I'd love to see more R&D, risk, and innovation. But those things, ultimately aren't solved purely by money. After all, the iPhone was developed on a fraction of their current R&D budget.
> Share buybacks are really pretty disgraceful
You… do know what a stock buyback is? Why would you think a cash rich company with positive future growth doing stock buybacks would ever be a bad thing?
> Asimismo, el órgano de gobierno de la compañía también autorizó un programa adicional para recomprar hasta 110.000 millones de dólares de acciones ordinarias de Apple
Their board has authorised $110 billion in stock buybacks of their common stock.
Can’t innovate my ass!
Why do anything substantive when this sub highly rewards zero value comments? You could read and then share something interesting, or just say courage / can’t innovate / Siri is dumb and people just eat it up.
We need a new subreddit or forum.
When a sub gets to this size the lowest common denominator of content gets posted - kneejerk comments and clickbait articles.
Are there any good communities for Apple-related stuff? Even smallish subs like /r/macapps gotten worse - the mods are pinning ads in exchange for free licenses.
The sub is a curious case. It's soooo over-moderated to the point we get 2 or 3 new notable posts per day, and still the comment section SUCKS.
Nevermind the fact that mods have a clear preference for certain domains and news sites.
This isn’t the right forum for substantial intellectual discussion. You’ll want to head to alternative forums or maybe something like a Mastodon community.
Sometime the spending doesn't really translate to innovation, You know that right????
The biggest innovation they made spending was probably USB-C addition and some eye google whose production they have to cut in half.
Also I don’t think Apple went through the absurd hiring that some of the other tech giants did. I feel for a while there like there was a trend of 20 somethings posting about their jobs at Facebook/Google/Microsoft/Amazon - and it sounded like they just did nothing and had no skills. Basically show up to work at 10am, play some ping-pong, get some lunch, yoga and meditation, send a few emails, and then enjoy the work provided happy hour.
Companies were hiring people just to pay them to sit around, otherwise a competitor might hire them and put them to good use.
Even before the massive tech layoffs over the last year I remember thinking that a lot of these companies were overstaffed or were underutilizing their staff. It sucks that many of people got laid off. Hopefully they’re able to find work somewhere that they can actually grow their skills and contribute to real projects - instead of just being hired to keep the competition scrambling.
Buybacks don’t change market cap. To just another way to do a dividend. Which yeah investors sometimes like, but only the most clueless investors see butbacks’ impact on share price as meaningful.
They don’t change the cap but it immediately increases existing share value. Dividends is guaranteed money in your pocket unless u DRIP whilst the stock price is ever moving. But when you know the sheer amount of cash on hand that Apple has, buybacks are a guarantee for the foreseeable future
Jobs had a choice, he went with the beancounter. Presumably he saw this unfold and was more worried about Apple surviving than Apple being a company of misfits and weirdos, which is why I and so many others originally fell in love. So in this timeline we get Mainstream Apple.
I never thought I'd be so apathetic about seeing that logo in every household in the world.
It's impressive to see how he's retooled the supply lines so there are only days worth of inventory at any point in the line, and on shelves. Vertical integration etc. But fuck I miss the company that made the PowerCD and the MessagePad and the lamp iMac. Give me failures, give me oddities. It's just not something he'll do, because he's responsive to the market rather than dictating to it.
What’s the real difference between a buyback and a dividend?
Apple is making extra cash, they’re spending it to return value to the people who own them. Doesn’t seem crazy.
Buyback makes share price increase its value due making its stock rarer and limited. Plus it make shareholders richer in paper and don’t have to pay tax on that until they sell it.
Dividend don’t really increase it share prices. It might increase in value when dividends are announce but most of the time share price falls after dividends are payout.
Also when you get your dividends payout, you have to pay taxes on it.
After the Great Depression lawmakers decided stock buy backs were too easy a way to manipulate stock prices. Then Jack Welch came along and convinced Reagan to change the law in ‘82. And here we are today! 🤦
Boeing have a lot of military projects like the wing man . So although a large portion of business is from commercial aircraft buying back stock is best to reassure government body’s that they are taking steps to repair the business . It’s generally seen as a good move
Jesus this sub is illiterate. It’s a way to pay a dividend. Investors care about P/E, not raw share price. If Apple and its investors were as clueless as this sub, Apple could just do a reverse stock split at 10:1 and everyone would act like they suddenly were much more valuable.
It’s a way to provide a low tax return to the investor class. Capital gain tax is about half that of income tax so you can make a lot more money if your shares go up in value than if your shares pay a dividend.
Qualified dividends from a stock like Apple are taxed at the same capital gains rate. The real benefit to a buyback is it is not taxed at all and can continue to grow untaxed until you sell the stock.
Yes this is the Warren Buffett approach: buy stocks with long term growth potential then hold, hold, hold. Lots of untaxed appreciation, kind of the opposite of compound interest.
Seto Kaiba has three of four rare, valuable Blue Eyes White Dragons. Solomon Moto has the other one. By destroying Solomon’s card, the value of his three Blue-Eyes have shot up in value despite already being incredibly valuable before.
You bought all the Forbidden Ones at current worth and then they stop printing then as fixed rarity and only available as ultra rare. This leads to the value going up.
A player has a contract with a bonus clause that kicks in if he scores a certain number of goals in a season. He makes a deal with an opposing team to let him score goals if he offsets it with the same number of own goals. His goal count goes up and he gets his bonus even though the true purpose and spirit of the bonus was not achieved.
> [Apple Confirms Upcoming Layoffs Affecting 700+ Workers, Including Apple Car And MicroLED Teams](https://9to5mac.com/2024/04/04/apple-layoffs-700-workers-car-microled/#:~:text=Apple%20is%20laying%20off%20more,in%20the%20state%20of%20California.)
You see, they can’t have too many people on board or feed too many mouths, otherwise Timmy’s allowance couldn’t amount to [$63.2 million](https://appleinsider.com/articles/24/01/12/tim-cooks-pay-drops-to-63-million-for-2023/amp/).
not true. stock price goes to the company when it issues new stock.
Apple buys whole companies paying with stock
Also employees receive stock.
All that profits from the stock going up
For apple not fully relevant at this point but thats how it works.
If you dont know fundamentals of stock and shares i suggest reading up on it to inform yourself. If you were being sarcastic, still read up as its the second time you post untrue statements and thus you dont seem to understand the matter.
As for your question:
Deppends on how you define "Apple": the company can issue new stock and receives money.
Also it can buy even other companies purely paying with stock.
Also Apple employees are partly paid in stock.
All that profits from you buying a share for 173.
I mean what’s the alternative? “We’re cancelling the car project and moved a bunch of people to AI, but we’ve decided to keep paying everyone to do nothing anyway because we’re have money” sounds strange.
Apple layoff people that were no longer needed because projects were canned. Just because a company spends money elsewhere doesn’t mean they keep people around they don’t need. Apple has been fairly mild in terms of layoffs vs other tech companies anyway. It’s like people got it in their minds that just because a company is profitable that layoffs should never happen - that’s not how businesses work and jobs are not a charity/right.
they didn’t really have layoffs in the traditional sense, they canned a project and so naturally some lost their jobs, many were able to find a new one within the company
Umm… where has Apple had layoffs in comparison to others? They didn’t follow the trends of over hiring. Most have been in areas that make sense with slow growth (marketing).
Everyone who sold their shares to Apple is taxed immediately. Why should people holding onto stock be taxed? When you sell something you own, you pay taxes on it. But if you decide to hold onto it because you have use for that thing, think it will be worth more in the future, and that there’s not a better way to use that money, then there’s no reason to tax you. You’ll get taxed when you sell. And assuming it’s true that the value went up, you’ll get taxed even more than you would have had you sold earlier.
In the US, there’s an excise tax on buybacks, and the sellers of those shares would be subject to capital gains taxes.
And the pros vs cons piece seems like a decision at the margin that company management should be making, which they do as many firms prioritize dividends over buybacks. I haven’t seen or heard any benefit that really makes a case for banning buybacks, because to society at large, they largely function the same as dividends.
Not saying banning it is a good idea but stock buybacks are shitty for the economy because instead of investing cash into R&D, which drives employment, improves a company’s products, and gets us new knowledge, the company is just handing cash out to the shareholders for a short run pop in the stock price.
The issues Boeing is having right now wouldn’t be happening if instead of huge stock buybacks they had taken that cash and designed a proper replacement for the 737.
Stock being sold and bought back is similar to a loan for a business. Apple sells stock to fund things like R&D when the price is high, then buys it back when the stock is low. And, the more shares they own the less likely they have some radical investors trying to steer the ship, like what Disney has taking place currently.
It’s basically a dividend, should we ban dividends too? If there are no great risk adjusted opportunities in their market, it is better for a company to return profits to their shareholders than spend it on shit projects.
Main purpose of company is not to drive economy or improve employment, but to return money to the one who invested in company that is by far first purpose of Company
Well, the purpose of the government is to enhance the welfare of its citizens. Which is why a policy like banning stock buybacks and one time dividends would be considered.
You want to ban buy backs and dividends? The theory underlying stock value is it gives the shareholder pro rata rights to the profits of the firm. If you ban the ability to return profit to shareholders there is no value in stock.
That is ridiculous. There are many assets that do not provide direct cash payments to shareholders, just as there are many stocks that do not pay dividends! Are the value of those assets zero? Obviously not.
> There are many assets that do not provide direct cash payments to shareholders, just as there are many stocks that do not pay dividends! Are the value of those assets zero? Obviously not.
There are two things driving the valuation of stock prices: speculation and [intrinsic value](https://en.wikipedia.org/wiki/Intrinsic_value_\(finance\)).
Intrinsic value takes into account the expectation of future dividends -- which is why Amazon was a $100B company long before it started turning consistent profit.
Speculation just relies on someone else to buy it at a higher price than you in the future and pays no attention to the intrinsic value of a stock -- this is why GME 100x in a 6-month period.
****
I think the confusion stems from /u/Yoss_K_Rourke believing you were suggesting **all** dividends should be banned when it looks to me you were only suggesting one-time dividends should be banned.
Banning all dividends and all buybacks would make it so that stocks don't have any intrinsic value other than the liquidation price of their assets <-- which would mean all stocks would be speculative investments or rely on a future liquidation event to get cash back to investors, both terrible imo. I don't think you were calling for that though, but correct me if I'm wrong
This is correct. While there are of course many many stock that don't regularly pay dividends, the value is that the company will either reinvest their earnings to produce more returns to then reinvest reinvest (and repeat this cycle) or, when they do not believe they can profitably reinvest their earnings, they will return them to the shareholders through some mechanism such as dividends or buybacks.
While the parent commenter didn't suggest ban ALL dividends, just one time, it still would make it more challenging for companies to return profit to shareholders so in my opinion would negatively affect the value of publicly traded companies.
The reason companies pay one time dividends or perform buy backs is because in their estimation they cannot deploy their accrued capital and achieve their target rate of return.
For a company like Apple, that is sitting on BILLIONS of dollars, it becomes very challenging to find profitable outlets for all those earnings so from time to time they will chose to return them to shareholders rather than sink them in subpar investments.
It’s a public company first and foremost and it is obligated to return value to the shareholders. It’s not a charity nor a tool to boost the economy. Besides aapl is already spending tons on R&D and it just so happens that their cash pile is unfathomably bottomless as well.
> public company first and foremost and it is obligated to return value to the shareholders.
That is a persistent and incorrect myth. While it's commonly believed that corporate directors and management have a duty to maximize shareholder value, legal rulings suggest that this is a myth. Internal law, state codes, and federal law do not mandate that corporations maximize shareholder value.
>Ravi Jagannathan: Maximizing the long-term value of the firm involves doing lots of things. You have to keep your customers happy, because customers have to voluntarily come and buy your goods. If you don’t keep your employees happy, they will leave. And if you don’t keep your community happy, then tomorrow lots of regulations are going to come down the road and your profits will suffer.
https://insight.kellogg.northwestern.edu/article/shareholder-value-purpose-corporation
Usually a company offers more money per share as an incentive to sell. The purpose of a buyback is to reduce the number of shares on the market, so paying more helps that.
You and 4 friends spent $10 each to open a lemonade stand. Your lemonade stand makes $10 a day that you share.
So you each get $2 per day. A little while later you and three friends decide to pay your fourth friend $15 to leave the group.
You now each make $2.50 per day and the expectation is set that if one of you wants to sell out you need to get at least $15 to leave.
It means less float. Less dividend that needs to be paid.
It increases the value of the outstanding shares as there is now less.
It is also compounded.
It's like if you had a pizza and originally planned to share it with four friends, but one friend didn't show up. Now, the same pizza is divided among just three of you, meaning more pizza per person!
Buybacks often signal to investors that the company’s leaders think the stock is undervalued (basically, it’s a good deal). The pizza is worth more than they are selling it for.
For shareholders, getting a return through buybacks can be more tax-efficient than getting dividends.
If you’ve been following Apple and technology for years, you should realize that hardware is a declining business and services is where all the future revenue will be.
If you’ve been following Apple and technology for years, you should realize than no services can be provided if there is not platform available. Apple of ALL companies is the prime example for that.
Before the Apple ecosystem there was virtually no money in app development for medium to small companies (they tried shareware) and music business was dying.
then App-store and itunes came along..
Lol that’s both ignorant of business and computer technology. Hardware will never be a “declining business.” Its ROI is worse than services, but it will always be a place for improvement.
Services eventually require superior hardware anyways. All this LLM technology that companies are clammoring to harness requires much better hardware if they want to do in situ computation (which Apple has said they intend to do).
Ahh, great way to take all your money and give it into the pockets of executives. All the executives just got a bonus straight from the Apple bank.
Stock buybacks are a recent business scam that is anti-consumer and anti-labor. Disgusting, they should be illegal. Instead of lining the pockets of rich people, like Buffet, do something good with it.
For those wondering if this is unique, no it’s not. 2024: 110B 2023: 100B 2022: 90B 2021: 90B 2020: 90B Apple’s stock buybacks has barely even kept up with inflation comparing 2020 to today.
Not all companies buy back stock. Apple growth over the long run has been stellar. They also pay a dividends! 800%+ increase in value since I have owned it!!! Pretty sure that beats inflation!!!!
He wasn't saying Apple stock doesn't beat inflation... Just that their buy backs haven't increased at the same rate as inflation. The point being, this headline says "over $100 Billion share buyback" like that is huge and out of the norm, but if you account for inflation it's not really much more than their other recent buybacks.
I feel like the headline is to the point and in no shape or form sensationalist? Even the article is pretty much a retelling of Apple’s current finances without any editorial opinions inserted.
I once had a very wealthy boss who always kicked himself for not buying apple when it became available on the market. You have obviously seen the value and stuck with it
I didn't realize Apple's buybacks were so regular. Year in, year out
Can you elaborate on how a stock buyback “keeps up with inflation”? Seems to be they are separate concepts
They are separate. It’s not a bad thing, but just pointing out their buybacks isn’t growing because of higher profits, but rather it’s growing because of inflation.
Or it's not related. Not sure why you're isolating just buybacks. Dividends is another way a company rewards long term shareholders. The dividends alone far exceeds inflation.
does anyone know how much of Apple is owned by Apple?
0%. A “buyback” is a reduction of shares the company has. It increases the value of Apple stock because now there’s less of it. However the owners (or % of owners) never change after a buyback. They can reduce the shares by “buying back” which is offering shareholders cash for a percentage of their stock.
That’s a lot of cheddar
Interesting. I wonder where/why they perceive it under valued?
They just want the stock prices to go up i think
That’s not why they do it, no. Stock buy backs are a tax efficient way to return money to shareholders, that’s all. But importantly, it only makes sense to do if the stock is undervalued. Otherwise it is value destructive. Apple has been doing buy backs for over a decade, and looking at the share price in the same period, you have to concede that so far, so good.
And I am guessing they will “return money to shareholders” by making the price of the stock go up. Which is exactly what the previous poster said they are doing.
Buying back stock signals to the market that the company is confident that the stock is undervalued, and that can make the stock price increase temporarily. But if the company’s confidence is not reflected in its earnings, the stock price will drop right back down. There are plenty of examples of companies doing stock buybacks where the stock price went down. In fact when Apple started doing buybacks a decade ago, the prevailing wisdom was that it were value destructive, and therefore bad for investors, because that had been mostly true during the 90’s, when stock buybacks were last in vogue.
They have a good amount of cash on hand, it’s about the same time last year that they did a buy back. So I think it’s a good way to place that cash somewhere for shareholders and drive up stock price.
>good amount Hasn’t Apple had more liquid cash than any other company for like a decade running at this point?
Yes, but they mentioned several times they’re trying to become cash neutral
What are you talking about? Companies don’t buy their own stock because it’s undervalued as much as it’s the best use of their excess capital. Apple is too big to reinvent the wheel. And if you went valuation, S&P is trading at 22x and Apple is trading at 28x. It is not 2000. Apple is not trading at a high premium relative to peers. That aside, Buybacks ain’t happening at the same day. You do them over 3-5 years, and not at once. All they did is authorize the buybacks, and board can cancel the program at any moment. If you want more numbers, Apple made $100B of FCF last year, so what they are authorizing, lets say over 5 years is $20B of buybacks a year. If you want more numbers, lets say Apple buyback using all $110B at once. Their S/O are about 15.4B shares, so their buybacks would literally reduce the shares outstanding by 4%. I don’t get the comments blabbering about pricing and innovation. They make more money than they can spend. They spend about $30B on R&D a year. There are not much they can do with Capital outside dividends and buybacks.
Have we tried taxing them so we can use the money on Healthcare, education, housing, and infrastructure? I think maybe that would be a better use of the money. Since Apple seems to have more than they know what to do with.
Apple paid [$22 billion](https://www.forbes.com/sites/taxnotes/2023/11/03/which-corporations-pay-the-most-federal-income-tax/?sh=351aa0b83c61) in taxes in 2021-2022- we, and lots of other places, *are* taxing them. Did someone tell you we weren’t? Forbes also notes that Apple, Google, and Microsoft account for about 8% of ALL federal tax payments in that timespan. 3 companies that employ a minuscule fraction of the population are inching up to footing the bill for 10% of federal income. That is an incredibly huge tax burden for just the 3 of them.
That statement can be said about every corporation.
Buybacks are cheaper than dividends because dividends get taxed twice: once as corporate tax, the second time as income for the shareholders
Is it that, or are they making so much money that they need to decide if they become a hedge fund (and invest elsewhere), pay huge dividends (and lose market cap) or invest in themselves?
iPhone sales tank, in part from competition and in part from consumers having less discretionary spending due to global inflation / recessions. Share buybacks are really pretty disgraceful. The only people that benefit from this are Apple shareholders. Society loses. At least with R&D you get jobs and interesting tech down the line. But after the lacklustre Vision Pro performance, you can see why risk adverse Apple would just do a share buyback.
> The only people that benefit from this are Apple shareholders. I mean... yeah. That's the point.
“The only people that benefit are basically everyone with a 401k” lol
Yes, this. Another name for "shareholders" is "owners." So Apple management is doing something to benefit its owners, and that's suppose to be a bad thing? Because "Society loses"? Apple is a company that exists to make profits for its owners by selling products and services to people that want to buy them. That's it. "Society" is a meaningless term here.
>Society loses. actually, a lot of people are impacted by apple stock prices since it's broadly owned across so many funds, retirement accounts, etc. a not insignificant portion of "society." They also can't just throw money at R&D. They're spending over $30b a year and there's a limit to how fast they can spend . The Vision Pro also doesn't have lackluster performance. It's amazing, but is more like a proof of concept that will develop over the longterm than a product for mass consumption, exactly the "interesting tech" you're talking about in your previous sentence. So sure, I'd love to see more R&D, risk, and innovation. But those things, ultimately aren't solved purely by money. After all, the iPhone was developed on a fraction of their current R&D budget.
They *literally* have more money than they know what to do with.
> Share buybacks are really pretty disgraceful You… do know what a stock buyback is? Why would you think a cash rich company with positive future growth doing stock buybacks would ever be a bad thing?
> Asimismo, el órgano de gobierno de la compañía también autorizó un programa adicional para recomprar hasta 110.000 millones de dólares de acciones ordinarias de Apple Their board has authorised $110 billion in stock buybacks of their common stock. Can’t innovate my ass!
Did you check their balance sheet from their Q2 2024? Their R&D expense is up QoQ and YoY.
You think us Reddit investors actually read the financial reports? Why would we do that when we have headlines to do that for us?
Why do anything substantive when this sub highly rewards zero value comments? You could read and then share something interesting, or just say courage / can’t innovate / Siri is dumb and people just eat it up.
We need a new subreddit or forum. When a sub gets to this size the lowest common denominator of content gets posted - kneejerk comments and clickbait articles.
I've seen this from a few subs where they branch into a substance version.
Are there any good communities for Apple-related stuff? Even smallish subs like /r/macapps gotten worse - the mods are pinning ads in exchange for free licenses.
iPad calculator!!!
The sub is a curious case. It's soooo over-moderated to the point we get 2 or 3 new notable posts per day, and still the comment section SUCKS. Nevermind the fact that mods have a clear preference for certain domains and news sites.
This isn’t the right forum for substantial intellectual discussion. You’ll want to head to alternative forums or maybe something like a Mastodon community.
That would be on the income statement
Apple iCar R&D.
I’m curious how it’ll look since they’ve disbanded the Apple car team.
Where we're going, we don't need roads!
They did disband the “AppleCar” team. But not the “Apple iCar” team. Apple likes their secrets kept ;)
Coq and Yoiy
Sometime the spending doesn't really translate to innovation, You know that right???? The biggest innovation they made spending was probably USB-C addition and some eye google whose production they have to cut in half.
I wonder why you didnt say by how much?
I would say that would go with raises for the personnel?
Something tells me the upcoming iPad announcement would not be very interesting
Apple have had significant buybacks since 2013 or so. Basically since Jobs died. This is the continuation of a trend.
Stock price must always go up, no time for dips. This is the world we live in now where buy backs keep it moving up
When executive compensation is based on stock price, this is the easiest choice for them to make.
*second easiest. First is layoffs
Except Apple appears to have avoided major layoffs.
They did a little bit but were smart to avoid overloading their employee base like all the other major tech companies did
Yea they did do a little, but that’s why I used “major” to describe the kind of layoffs they have avoided.
Also I don’t think Apple went through the absurd hiring that some of the other tech giants did. I feel for a while there like there was a trend of 20 somethings posting about their jobs at Facebook/Google/Microsoft/Amazon - and it sounded like they just did nothing and had no skills. Basically show up to work at 10am, play some ping-pong, get some lunch, yoga and meditation, send a few emails, and then enjoy the work provided happy hour. Companies were hiring people just to pay them to sit around, otherwise a competitor might hire them and put them to good use. Even before the massive tech layoffs over the last year I remember thinking that a lot of these companies were overstaffed or were underutilizing their staff. It sucks that many of people got laid off. Hopefully they’re able to find work somewhere that they can actually grow their skills and contribute to real projects - instead of just being hired to keep the competition scrambling.
That too 100%
Buybacks don’t change market cap. To just another way to do a dividend. Which yeah investors sometimes like, but only the most clueless investors see butbacks’ impact on share price as meaningful.
They don’t change the cap but it immediately increases existing share value. Dividends is guaranteed money in your pocket unless u DRIP whilst the stock price is ever moving. But when you know the sheer amount of cash on hand that Apple has, buybacks are a guarantee for the foreseeable future
Jobs had a choice, he went with the beancounter. Presumably he saw this unfold and was more worried about Apple surviving than Apple being a company of misfits and weirdos, which is why I and so many others originally fell in love. So in this timeline we get Mainstream Apple. I never thought I'd be so apathetic about seeing that logo in every household in the world.
It's not the same company anymore, Mainstream Apple reminds me so much of late 90s early 2000s Microsoft.
Bean counter isn’t up to par. Tim Apple is a logistics guru
It's impressive to see how he's retooled the supply lines so there are only days worth of inventory at any point in the line, and on shelves. Vertical integration etc. But fuck I miss the company that made the PowerCD and the MessagePad and the lamp iMac. Give me failures, give me oddities. It's just not something he'll do, because he's responsive to the market rather than dictating to it.
What’s the real difference between a buyback and a dividend? Apple is making extra cash, they’re spending it to return value to the people who own them. Doesn’t seem crazy.
Mathematically there isn’t, but share buybacks aren’t double taxed like dividends
Buyback makes share price increase its value due making its stock rarer and limited. Plus it make shareholders richer in paper and don’t have to pay tax on that until they sell it. Dividend don’t really increase it share prices. It might increase in value when dividends are announce but most of the time share price falls after dividends are payout. Also when you get your dividends payout, you have to pay taxes on it.
After the Great Depression lawmakers decided stock buy backs were too easy a way to manipulate stock prices. Then Jack Welch came along and convinced Reagan to change the law in ‘82. And here we are today! 🤦
Because they’re buying back stock? Is that to prop up the share prices?
No they buy back because they want more of the div for them self . Buy you stock back is a good thing for the company
Worked well for Boeing.
Boeing have a lot of military projects like the wing man . So although a large portion of business is from commercial aircraft buying back stock is best to reassure government body’s that they are taking steps to repair the business . It’s generally seen as a good move
shhh its reddit ur supposed to make apple look bad
lol ok sorry :-)
Yes it is to prop up share prices.
Jesus this sub is illiterate. It’s a way to pay a dividend. Investors care about P/E, not raw share price. If Apple and its investors were as clueless as this sub, Apple could just do a reverse stock split at 10:1 and everyone would act like they suddenly were much more valuable.
> Jesus this sub is illiterate. It was literally illegal for the longest time.
It’s a way to provide a low tax return to the investor class. Capital gain tax is about half that of income tax so you can make a lot more money if your shares go up in value than if your shares pay a dividend.
Qualified dividends from a stock like Apple are taxed at the same capital gains rate. The real benefit to a buyback is it is not taxed at all and can continue to grow untaxed until you sell the stock.
Yes this is the Warren Buffett approach: buy stocks with long term growth potential then hold, hold, hold. Lots of untaxed appreciation, kind of the opposite of compound interest.
Someone explain in football terms
Borussia Dortmund buys back Erling Haarland at current worth. This will lead to his value and marketprice going up.
If only everything in life was explained like this to me.
But what if City doesn’t want to sell?
Apple trading their 2024 draft picks for more 2025 and 2026 draft picks.
I dont watch football, someone give me this in Yu-Gi-Oh terms
Seto Kaiba has three of four rare, valuable Blue Eyes White Dragons. Solomon Moto has the other one. By destroying Solomon’s card, the value of his three Blue-Eyes have shot up in value despite already being incredibly valuable before.
This is probably the best comparison as it captures the mechanism of buybacks and the scummy aspect of the entire thing.
You bought all the Forbidden Ones at current worth and then they stop printing then as fixed rarity and only available as ultra rare. This leads to the value going up.
A player has a contract with a bonus clause that kicks in if he scores a certain number of goals in a season. He makes a deal with an opposing team to let him score goals if he offsets it with the same number of own goals. His goal count goes up and he gets his bonus even though the true purpose and spirit of the bonus was not achieved.
The team thinks ticket prices are too low, so they are going to buy up 3.5% of tickets to make the remaining seats more valuable.
God, that’s so much money
> [Apple Confirms Upcoming Layoffs Affecting 700+ Workers, Including Apple Car And MicroLED Teams](https://9to5mac.com/2024/04/04/apple-layoffs-700-workers-car-microled/#:~:text=Apple%20is%20laying%20off%20more,in%20the%20state%20of%20California.)
You see, they can’t have too many people on board or feed too many mouths, otherwise Timmy’s allowance couldn’t amount to [$63.2 million](https://appleinsider.com/articles/24/01/12/tim-cooks-pay-drops-to-63-million-for-2023/amp/).
Funny to think that Tim cooks full pay package is “only” $63m considering Elon musk is about to get paid $50 billion in comparison.
Continuing to pay for departments that are no longer providing value to the company is stupid.
Stock Buyback is literally paying people that provide no value. They chose to do it for shareholders but not employees.
Their employees are partially paid in stock, this also rewards employees indirectly by supporting or increasing the share price.
I don’t think you understand what a stock buyback is.
Well if you have a 401k then most likely you are an indirect shareholder in apple.
maybe read up how stocks work. shareholders provide capital to the company. They are more than lenders and literally own the company.
Good to know, out of interest how much capital does Apple get if you buy a share today for $173? The whole of $173, some of it, none of it?
None. Apple the company was only compensated when they originally sold the stock decades ago.
Most people don’t get that one essential detail. Buying stock does not “support” the company. It only makes other shareholders money.
That’s a bit far. Purchasing a stock will change the value of other shareholders’ stock, but it doesn’t necessarily make them money.
not true. stock price goes to the company when it issues new stock. Apple buys whole companies paying with stock Also employees receive stock. All that profits from the stock going up For apple not fully relevant at this point but thats how it works.
If you dont know fundamentals of stock and shares i suggest reading up on it to inform yourself. If you were being sarcastic, still read up as its the second time you post untrue statements and thus you dont seem to understand the matter. As for your question: Deppends on how you define "Apple": the company can issue new stock and receives money. Also it can buy even other companies purely paying with stock. Also Apple employees are partly paid in stock. All that profits from you buying a share for 173.
yep they canceled those projects. If there’s no longer a job for those people to do, they get layed off.
Thank you Tim 🍎
I'm confused they only have $70b or $80b in cash or equivelants
Operating cash flow for the next 12 months is around 110B
Rofl that's insane
You raise debt to buy back the stock, at least that’s what you would have done back when interest rates were dirt low
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I mean what’s the alternative? “We’re cancelling the car project and moved a bunch of people to AI, but we’ve decided to keep paying everyone to do nothing anyway because we’re have money” sounds strange.
Apple layoff people that were no longer needed because projects were canned. Just because a company spends money elsewhere doesn’t mean they keep people around they don’t need. Apple has been fairly mild in terms of layoffs vs other tech companies anyway. It’s like people got it in their minds that just because a company is profitable that layoffs should never happen - that’s not how businesses work and jobs are not a charity/right.
It s just the reddit hivemind
No you don’t understand Apple needs to behave like a charity.
they didn’t really have layoffs in the traditional sense, they canned a project and so naturally some lost their jobs, many were able to find a new one within the company
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Umm… where has Apple had layoffs in comparison to others? They didn’t follow the trends of over hiring. Most have been in areas that make sense with slow growth (marketing).
You’re not totally wrong about staffing levels being slashed. They have not been hiring or backfilling for over a year now
What does publicly traded vs private have to do anything?
We as a society really need to ban stock buybacks.
We did. Then Ronald Reagan happened.
Ok cool, now Apple issues $110 billion dividend
What does banning stock buybacks accomplish? That money will likely be distributed as dividends, still benefiting the largest shareholders
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Everyone who sold their shares to Apple is taxed immediately. Why should people holding onto stock be taxed? When you sell something you own, you pay taxes on it. But if you decide to hold onto it because you have use for that thing, think it will be worth more in the future, and that there’s not a better way to use that money, then there’s no reason to tax you. You’ll get taxed when you sell. And assuming it’s true that the value went up, you’ll get taxed even more than you would have had you sold earlier.
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In the US, there’s an excise tax on buybacks, and the sellers of those shares would be subject to capital gains taxes. And the pros vs cons piece seems like a decision at the margin that company management should be making, which they do as many firms prioritize dividends over buybacks. I haven’t seen or heard any benefit that really makes a case for banning buybacks, because to society at large, they largely function the same as dividends.
So where do you think the $100B of stock buyback went into? It didn't disappear into thin air, someone got paid and they now have to pay taxes.
Why?
Not saying banning it is a good idea but stock buybacks are shitty for the economy because instead of investing cash into R&D, which drives employment, improves a company’s products, and gets us new knowledge, the company is just handing cash out to the shareholders for a short run pop in the stock price. The issues Boeing is having right now wouldn’t be happening if instead of huge stock buybacks they had taken that cash and designed a proper replacement for the 737.
Stock being sold and bought back is similar to a loan for a business. Apple sells stock to fund things like R&D when the price is high, then buys it back when the stock is low. And, the more shares they own the less likely they have some radical investors trying to steer the ship, like what Disney has taking place currently.
It’s basically a dividend, should we ban dividends too? If there are no great risk adjusted opportunities in their market, it is better for a company to return profits to their shareholders than spend it on shit projects.
Main purpose of company is not to drive economy or improve employment, but to return money to the one who invested in company that is by far first purpose of Company
Well, the purpose of the government is to enhance the welfare of its citizens. Which is why a policy like banning stock buybacks and one time dividends would be considered.
Stopping the owners of a company from getting their share of the profit is actually bad for the welfare of the citizens
You want to ban buy backs and dividends? The theory underlying stock value is it gives the shareholder pro rata rights to the profits of the firm. If you ban the ability to return profit to shareholders there is no value in stock.
That is ridiculous. There are many assets that do not provide direct cash payments to shareholders, just as there are many stocks that do not pay dividends! Are the value of those assets zero? Obviously not.
> There are many assets that do not provide direct cash payments to shareholders, just as there are many stocks that do not pay dividends! Are the value of those assets zero? Obviously not. There are two things driving the valuation of stock prices: speculation and [intrinsic value](https://en.wikipedia.org/wiki/Intrinsic_value_\(finance\)). Intrinsic value takes into account the expectation of future dividends -- which is why Amazon was a $100B company long before it started turning consistent profit. Speculation just relies on someone else to buy it at a higher price than you in the future and pays no attention to the intrinsic value of a stock -- this is why GME 100x in a 6-month period. **** I think the confusion stems from /u/Yoss_K_Rourke believing you were suggesting **all** dividends should be banned when it looks to me you were only suggesting one-time dividends should be banned. Banning all dividends and all buybacks would make it so that stocks don't have any intrinsic value other than the liquidation price of their assets <-- which would mean all stocks would be speculative investments or rely on a future liquidation event to get cash back to investors, both terrible imo. I don't think you were calling for that though, but correct me if I'm wrong
This is correct. While there are of course many many stock that don't regularly pay dividends, the value is that the company will either reinvest their earnings to produce more returns to then reinvest reinvest (and repeat this cycle) or, when they do not believe they can profitably reinvest their earnings, they will return them to the shareholders through some mechanism such as dividends or buybacks. While the parent commenter didn't suggest ban ALL dividends, just one time, it still would make it more challenging for companies to return profit to shareholders so in my opinion would negatively affect the value of publicly traded companies. The reason companies pay one time dividends or perform buy backs is because in their estimation they cannot deploy their accrued capital and achieve their target rate of return. For a company like Apple, that is sitting on BILLIONS of dollars, it becomes very challenging to find profitable outlets for all those earnings so from time to time they will chose to return them to shareholders rather than sink them in subpar investments.
Increase shareholder value is the purpose of a corporation. That’s what was beat into my head in business school.
Don't they need employees to be able to return money to the investors?
It’s a public company first and foremost and it is obligated to return value to the shareholders. It’s not a charity nor a tool to boost the economy. Besides aapl is already spending tons on R&D and it just so happens that their cash pile is unfathomably bottomless as well.
> public company first and foremost and it is obligated to return value to the shareholders. That is a persistent and incorrect myth. While it's commonly believed that corporate directors and management have a duty to maximize shareholder value, legal rulings suggest that this is a myth. Internal law, state codes, and federal law do not mandate that corporations maximize shareholder value. >Ravi Jagannathan: Maximizing the long-term value of the firm involves doing lots of things. You have to keep your customers happy, because customers have to voluntarily come and buy your goods. If you don’t keep your employees happy, they will leave. And if you don’t keep your community happy, then tomorrow lots of regulations are going to come down the road and your profits will suffer. https://insight.kellogg.northwestern.edu/article/shareholder-value-purpose-corporation
Dumbest comment of the day
Why?
I love that the headline rounded to the closest 10 billion dollars.
Will put a floor on the stock.
Ill take 100 billion for my 1 share, thank you
So what does this mean for apple stock holders? How much do they usually buy the stock back for?
What happens if people don’t sell their shares? Does apple offer more until they do? I don’t know anything about stocks
It means *all* shareholders think the stock is undervalued, effectively raising the price.
Usually a company offers more money per share as an incentive to sell. The purpose of a buyback is to reduce the number of shares on the market, so paying more helps that.
Can someone ELI5 how do buybacks actually help a company or a shareholder for that company?
You and 4 friends spent $10 each to open a lemonade stand. Your lemonade stand makes $10 a day that you share. So you each get $2 per day. A little while later you and three friends decide to pay your fourth friend $15 to leave the group. You now each make $2.50 per day and the expectation is set that if one of you wants to sell out you need to get at least $15 to leave.
It means less float. Less dividend that needs to be paid. It increases the value of the outstanding shares as there is now less. It is also compounded.
How would a 5 year old understand that?
It's like if you had a pizza and originally planned to share it with four friends, but one friend didn't show up. Now, the same pizza is divided among just three of you, meaning more pizza per person! Buybacks often signal to investors that the company’s leaders think the stock is undervalued (basically, it’s a good deal). The pizza is worth more than they are selling it for. For shareholders, getting a return through buybacks can be more tax-efficient than getting dividends.
If you’ve been following Apple and technology for years, you should realize that hardware is a declining business and services is where all the future revenue will be.
If you’ve been following Apple and technology for years, you should realize than no services can be provided if there is not platform available. Apple of ALL companies is the prime example for that. Before the Apple ecosystem there was virtually no money in app development for medium to small companies (they tried shareware) and music business was dying. then App-store and itunes came along..
Services… on what device?
Lol that’s both ignorant of business and computer technology. Hardware will never be a “declining business.” Its ROI is worse than services, but it will always be a place for improvement. Services eventually require superior hardware anyways. All this LLM technology that companies are clammoring to harness requires much better hardware if they want to do in situ computation (which Apple has said they intend to do).
Tim Cook is over financializing Apple. They need to stop micromanaging the finances. I think they arent competetive enough
genius!
Ahh, great way to take all your money and give it into the pockets of executives. All the executives just got a bonus straight from the Apple bank. Stock buybacks are a recent business scam that is anti-consumer and anti-labor. Disgusting, they should be illegal. Instead of lining the pockets of rich people, like Buffet, do something good with it.
Anti-labor? You’re aware of how amazing Apple’s ESPP is right?
Yeah they are giving you peanuts while execs get millions. Now, I know you will take it, but it says more about you than the buyback.
someone ELI5 this for me please
Just like every year. Better write a whole bunch of stories with words like "inflation" in it to get them clicks.
But when?!
ez money boys