Home » Black Swans » Apple Cash becomes a political target or corpgov issue? iCash solution soon or it’s dead money. $AAPL

Apple Cash becomes a political target or corpgov issue? iCash solution soon or it’s dead money. $AAPL

English: The logo for Apple Computer, now Appl...

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Apple (Nasdaq:AAPL) has an $81 Billion cash hoard. This amounts to 25% of its market cap. The stock does not pay a dividend. Everyone clearly agrees that they have enough for a robust R&D effort. This ensures that they can beat up any direct competitor and/or buy up smart ideas while they are still small.

The cash issue becomes a governance question. This is shareholder money with no clear purpose. Shareholders to date have been delighted with iPhones and iPads. But lets face it, the market is not going to let this dead money stick around on the balance sheet forever.

Apple executives have a big problem. They are good at technology but are they good at investing? Apple does not have a track record investing money. They have bought a few things here and there to augment their technology. But it stops there.

The question also becomes political. Apple is global. The cash most likely is spread out in bank accounts around the world. Uncle Sam has a perverse habit of taxing cash as it comes into the United States. So you will understand the reticence of some executives to repatriate profits. Democrats want and need to tax. Will politicians help hurt Apple.

Investors will be clamouring. IRS will be salivating. Politicians will be hiding. Apple executives will be confused. The public will read about the problem on their iPads thereby creating more profit.

Apple needs to pick a direction with the cash and develop a strategic plan. The problem is much more complex than just a little bit of dividend yield. So far they have no game.

George Gutowski writes from a caveat emptor perspective.

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