Apple buys 16 Billion $ of AAPL

[pRICE cUBE]

http://www.cultofmac.com/237178/apple-ma...wn-shares/

[GGD]

"Last quarter, the Cupertino company spent $16 billion on 36 million of its own shares, which cost, on average, just over $444 apiece."

Which is higher than it is today, in fact it would have been pretty hard to average $444 during that quarter, there were only two periods where the stock was above $444. May 2 to May 14, and May 27 to June 5. A total of 15 trading days during the quarter.

[Article Accelerator]

A good analysis here:

http://www.asymco.com/2013/07/25/apples-...quisition/

[Racer X]

does this mean Apple will pay themselves over 50 billion in stock dividends?

[Acer]

Anyone care to explain to an investment n00b why Apple would do this?

[GGD]

Racer X wrote:
does this mean Apple will pay themselves over 50 billion in stock dividends?

50 billion in stock dividends on $16 billion worth of stock, that's a pretty good dividend rate (about 300%).

[GGD]

Acer wrote:
Anyone care to explain to an investment n00b why Apple would do this?

It's a way to indirectly return some of the cash to the shareholders. By reducing the total number of shares, each remaining share owns a larger portion of the company. So the earnings per share should increase and the stock should be worth more if all other factors remained constant. That's the math behind it at least.

[raz]

GGD wrote:
[quote=Acer]
Anyone care to explain to an investment n00b why Apple would do this?

It's a way to indirectly return some of the cash to the shareholders. By reducing the total number of shares, each remaining share owns a larger portion of the company. So the earnings per share should increase and the stock should be worth more if all other factors remained constant. That's the math behind it at least.
While the above is true, many would argue that stock buybacks are merely a way to prop up the stock price - as opposed to its value. The subtle difference is that people who are compensated by the stock price (mostly executives and board members, but also employees) reap the benefit as opposed to shareholders in it for the long haul.

[davester]

raz wrote:
[quote=GGD]
[quote=Acer]
Anyone care to explain to an investment n00b why Apple would do this?

It's a way to indirectly return some of the cash to the shareholders. By reducing the total number of shares, each remaining share owns a larger portion of the company. So the earnings per share should increase and the stock should be worth more if all other factors remained constant. That's the math behind it at least.
While the above is true, many would argue that stock buybacks are merely a way to prop up the stock price - as opposed to its value. The subtle difference is that people who are compensated by the stock price (mostly executives and board members, but also employees) reap the benefit as opposed to shareholders in it for the long haul.
It's also true that companies often do this when they feel that the market is undervaluing the stock price compared to the intrinsic value of the company. In this regard, repurchases are a kind of legal insider trading because even if the company reveals everything about operations that it is legally required to, the insiders still know more than the public does.

[Charlie M.]

davester wrote:
[quote=raz]
[quote=GGD]
[quote=Acer]
Anyone care to explain to an investment n00b why Apple would do this?

It's a way to indirectly return some of the cash to the shareholders. By reducing the total number of shares, each remaining share owns a larger portion of the company. So the earnings per share should increase and the stock should be worth more if all other factors remained constant. That's the math behind it at least.
While the above is true, many would argue that stock buybacks are merely a way to prop up the stock price - as opposed to its value. The subtle difference is that people who are compensated by the stock price (mostly executives and board members, but also employees) reap the benefit as opposed to shareholders in it for the long haul.
It's also true that companies often do this when they feel that the market is undervaluing the stock price compared to the intrinsic value of the company. In this regard, repurchases are a kind of legal insider trading because even if the company reveals everything about operations that it is legally required to, the insiders still know more than the public does.
If the big surprises Apple has up it's sleeve are as wonderful the new Mac Pro I wouldn't buy their stock at an eighth that.