Apparently Apple is going to announce at 6:00am Pacific time what they are planning on doing with their cash stack.

My best guess is that they’ll give out a regular dividend. It will be around $3-4/quarter.

Whatever the company decides, it will have zero impact on its value, but the market will bid it up like crazy since a dividend means it can also be included on the eligibility list of six billion income mutual funds out there.

That said, everybody and their grandmothers are long on Apple. If you buy the Nasdaq 100 you have a ridiculously large fraction of Apple. The S&P 500 has over 4% of Apple. Apple has been going up parabolically since the beginning of the year, and while it has killed the equity of a lot of short sellers, a parabolic trajectory up cannot be sustained indefinitely.

This type of catalyst kind of reminds me of what happened back in the internet stock days when they announced stock splits. Now the valueless news du jour is announcing dividends.

No positions. I don’t intend on going long or short – the best thing to do about this freight train is get out of the way and look for value elsewhere since Apple is doing a wonderful job of sucking capital from other worthy candidates.

2 thoughts on “Apple”

  1. Company announced a $2.65 quarterly dividend. Close prediction.

    Share buybacks are probably one way of utilizing overseas cash more than anything else without having to beam that cash back to the USA. One would wonder how much value there is in buying back your stock when your market capitalization is over $500 billion.

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