Monday, March 19, 2012

Board votes to take a bite out of Apple

After weeks of shareholders crying for Apple to disconnect themselves from the autocratic policies of former CEO Steve Jobs, the board of the largest retail company in the world (at least on the S&P 500) has decided to spend some of their $98 billion in cash, and offer dividends and share buybacks for investors.

Apple Announces Plans to Initiate Dividend and Share Repurchase Program
Expects to Spend $45 Billion Over Three Years

Business Wire
CUPERTINO, Calif. -- March 19, 2012
Apple today announced plans to initiate a dividend and share repurchase program commencing later this year.

Subject to declaration by the Board of Directors, the Company plans to initiate a quarterly dividend of $2.65 per share sometime in the fourth quarter of its fiscal 2012, which begins on July 1, 2012.

Additionally, the Company’s Board of Directors has authorized a $10 billion share repurchase program commencing in the Company’s fiscal 2013, which begins on September 30, 2012. The repurchase program is expected to be executed over three years, with the primary objective of neutralizing the impact of dilution from future employee equity grants and employee stock purchase programs.

The total cost for Apple in doing this will be around $45 billion over the next three years, which will not even equate to half of their current cash holdings.  Since Apple in the past has not given dividends to loyal shareholders under the rule of Steve Jobs, these actions may be the final disconnect of a paranoid man who willed consumers to do things his way, or the highway.


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