Monday, December 8, 2008

I Don't See Apple Doing A Share Buyback Any Time Soon

Contrary to what Toni Sacconaghi of Sanford C. Bernstein & Co. says in this article, I can’t see Apple doing a share buyback any time soon for all the reasons that I explained in this post.

The post explains them all in detail, but the bottom line is that I don't think it will happen because of management looking long term and using that money to innovate and create great products that create organic growth instead of boosting Apple's EPS short-term through a share buyback.

It seems to me like Toni Sacconaghi threw together a bunch of numbers together and realized how much cash Apple has and realized that like at a lot of other companies, with the amount of cash Apple has had for a while now, a share buyback would have been making sense for a long time. However, Apple isn't too keen on doing them. Only if Apple gets really bored would they do a buyback and I don't see that happening anytime soon. The question always comes up at the Annual Meeting and there is always the same response from Apple's executives.

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