Apple (Nasdaq:AAPL) has some $76 billion in cash and the controversy becomes what do you do with all that cash. Apple needs to deploy it wisely before the left-wing picks it up as a cause and tries to confiscate. Not sure where on this planet the cash resides. But you have to believe a fair chunk of it sits outside the USA avoiding taxes. [Obama you listening]
So here are a few suggested uses.
- Start paying a dividend and change the ownership profile from beta loving tech investors to dividend oriented income types.
- Make a huge acquisition(s) masked as strategic investments. Looks good short-term but it will be outside of Apple’s expertise.
- Cut your margins and squeeze your competition to death. Anti-trust regulators will soon flock over you to protect competition.
- Split up Apple just like the old Rockefeller Standard Oil and watch the component parts become wealthier than the original entity.
- Donate millions of iPads to the US school system reducing educational costs dramatically. Watch competitors squawk and fight. Get tied up in stupid litigation.
- Donate millions of iPads to a foreign school system helping them bridge the divide to the 21st century. Then watch that country kick our ass with a very well trained generation of knowledge workers.
- Donate huge amounts for medical research and maybe organ transplant. Steve Jobs you owe on that one but something tells me you have been personally generous. Maybe its time for a grander gesture.
- Just keep your powder dry. Interest rates will increase rapidly as the inflation genie comes out of the jar. Interest on cash balances will increase. Other businesses will find it more difficult to raise money in higher interest rate environments. Opportunities will abound. This probably the best option. Now how do we keep clamouring shareholders calm in the meantime.
Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.
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