Apple’s $573 Billion Bet (& Are They Going Private)
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- Опубликовано: 13 июн 2024
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Apple has spent $573 billion on something, can you guess what it is? Common guesses would be R&D, investments, and building factories but the answer is actually stock buybacks. That’s right, Apple has spent a whopping $573 billion on stock buybacks over the past 10 years. That’s over $400 billion more than 2nd place which is Microsoft coming in at $170 billion worth of buybacks. Apple is only doubling down on this strategy either as they're ramping up to purchase nearly $100 billion worth of stock every single year. While this often makes shareholders quite happy, it’s not exactly the best course of action for the economy as a whole. You see, not only do stock buybacks not reinvest the cash into hiring employees, innovating, and creating value in the marketplace but it also wastes capital by artificially pumping up stock prices. This is why stock buybacks were banned for nearly 50 years. Buybacks were banned right after the great depression with SEC regulation but they were unbanned in the early 1980s thanks to Reagonomics. This video explains the history of stock buybacks and why Apple ended up spending $573 billion on buybacks.
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Timestamps:
0:00 - $573 Billion Bet
2:33 - A Banned Practice
6:08 - Buybacks Make A Comeback
9:21 - Apple Bets Big
12:14 - The Tip Of The Iceberg
Resources:
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Disclaimer:
This video is not a solicitation or personal financial advice. All investing involves risk. Please do your own research.
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One important note is that dividends are taxes a lot more than buybacks. For an individual investor, it makes more sense the company uses buybacks compared to dividends
This sentence hurts my brain
@@Terandium he only made 1 mistake
Buy backs aren't taxed at all. It's a value distribution not a monetary distribution.
Apple has transitioned from a growth-based company to a value-based company. They are starting to make a pretty consistent profit every year and use buybacks to return that money to shareholders. Similarly to how many other companies used to use dividends.
You should take a look at their actual results before speaking. In 2022 and 2021 Apple had profits upwards of 100 billion usd. In the three previous years they made profits of around 60 billion. How is going from 60 billion to 100 billion not a growth-based company?
It's worth noting that stock buybacks create value for shareholders when their stock is undervalued and they destroy value for shareholders when the stock is overvalued. And because almost every CEO in America naturally believes that the stock is undervalued during their stewardship of the company, many stock buybacks occur even when the stock is overvalued, resulting in billions upon billions of shareholder value being destroyed every year by CEOs who are too proud to admit that they don't have an internally productive use of the cash and that the best use of it is to issue a dividend.
Stock buyback is just an alternative for a dividend. The difference is just that with dividends, you are "forced" to take the cash (and be taxed) and then you can use that money to buy more shares if you think it's undervalued, whereas with buybacks you can choose to keep all of your shares or sell some for cash if you think it's overvalued.
@SiisKolkytEuroo
Hmm I don't think that's true.
If the company pays the investor a dividend they're converting x amount of dollars from the corporate accounts into x amount of dollars in the investor's account (of which the investor has to pay y dollars in taxes).
However now imagine the situation of a share buyback. If the company's stock is trading at fair value, then x amount of corporate dollars get converted into x amount of assets, where these assets then can be used to cancel out shares. Thus the investor gets x dollars and as you state does not have to pay taxes (in most countries but not all). BUT if the company is blindly buying back it's own shares, even when these are overvalued then x amount of dollars is in the long term traded for an asset worth way less than x. Depending on how high the dividend tax is and the perceived bubble in the stock then it absolutely can destroy value for shareholders (long term). However it can take a long time for the negative expected value of the action to materialise (so a scrupulous board could easily keep this game going for quite some time)
As a specific example, bed bath and beyond spent 10+ billion buying back their stock at overinflated prices just for it to crash horribly.
@@SiisKolkytEuroo selling shares requires people to take the tax hit that you’re saying buybacks are better than dividends for helping you avoid.
Buybacks are clearly bad when shares are overvalued and are usually good when shares are undervalued. But dividends allow value to be returned to shareholders without regard to a company’s share price or the CEO’s ability to understand his firm’s intrinsic value.
Just the simple fact that Apple Had 573B$ cash for buybacks is absolutely insane. I just watched a video that put 1B$ in perspective and I was gobsmacked
I think its to deter short sellers and options activity in general. They create volatility and I guess apple doesn’t want that
@@Outwardpd Shorting is important so people can make money when a stock's price goes down as well as when it goes up, creating an incentive for people to publish negative information about a company as well as positive information.
Without short sellers, bad companies would stay in business for much longer.
Shorting is selling a share in a company which you borrowed from someone else, then buying it back later on and giving it back to the owner. Borrowing shares is no different to borrowing money, and there's no reason for one to be illegal when the other one isn't.
@@Outwardpd
But if you want a company to succeed...it encourages people to actively only post great information about it in immoral and often illegal ways. Those are the pump and dumps. Short selling is just the other side of the coin. If you have a problem with short-selling due to rumors, then you should have a problem with buying stock for the same reason.
I remember them having 800 billion in cash about a decade ago but the issue was they didn't know how to move it since moving it would immediately subject it to be taxed wherever to move it to. If I remember correct that how they built impressive the campus/headquarters they now operate out of
I am uncertain how much, but Apple does fund their buybacks with corporate bonds, which last time i looked only returned about 2%.
Buybacks might work great for Apple and Berkshire Hathaway, but it hasn’t always worked so good for companies that there stock tanked like GE. Dividends give the choice of reinvestment or spending it somewhere else
Buybacks also have the option of selling the stock and getting the money to spend somewhere else or keeping the stock.
The difference is, with dividends, you have to pay taxes regardless of whether you reinvest, and if you reinvest you have to pay taxes again once you sell the stock. In contrast, with stock buybacks, you only have to pay taxes when you sell the stock.
Great video as always. Keep it up Hari.
Thank you Balpreet!
You make such great and niche videos. Your video about being a try hard at college still hits me. Happy for your success
lol stock buybacks isn't exactly a niche topic
Wow this video actually indirectly answered a lot of questions I had about the influence of the financial industry and political motives on the macroeconomics of a country 😮
This channel is so underrated!
Very well explained ✅, Thank you for sharing Hari ❤️🙌🏼
Let’s gooo!! Another great video LA! Thanks!
Thanks for watching Daniel!
Apples last buyback was funded with corporate bonds. I understand why they did this, but its main effect is to entrench those who currently control Apple. They had no issue raising the funds, but considering the cash rate right now, i suspect those who purchased apple bonds are not too happy.
As a Apple shareholder, I don't think they are making enough money 😅
😂
That would be called unrealistic expectations. They ONLY made 30 billion in the last quarter with nearly at a margin of around 25%.
@@johniii8147 Could have been 30%. Gotta pump those numbers up. Those are rookie numbers.
@@johniii8147needs more numbers.. this is the way..
Lol this is one way of going private!! Buy buy back your own stock at massive discounts!!
How does that take them private?
LOL!! exclamation points!!
Make sure we know you are serious!! Increasingly deflate the value of your punctuation with every sentence!!
Go daniel!!!
@@CrowfistNo one cares about what you care about
@@Crowfistweirdo….
@@Crowfistweirdo
Stock buybacks ... nothing that makes society better in anyway, even though the company wouldnt be SH*T without the consumer.
Its time the consumer starts investing in companies that invest back!!
Savage
@@LogicallyAnswered That reply made my day and thanks for all your amazing videos that bring insight and awareness to the SAVAGERY that corporations have unleashed on the little guy/gal
You are not investing in the company.
You are just buying the product.
@@sampatkalyan3103 I’m investing. I think but backs are a bad idea. Sad it’s the only idea Apple has.
@@TheBooban buybacks have more favourable tax treatments, with dividends you have to pay tax on it. For buybacks if you don’t sell, you don’t pay tax. Win win for everyone
noice vid as always, been supporting you since 2024, keep it up💪
Hahaha
time travel
Demnnnn. 😮😮
This vid is amazing love what you do
Thanks bro!
@@LogicallyAnswered no prov
Door needs to swing both ways for it to be a fair system. If you don't have a good place to invest your money as a company, nothing wrong with spending it on buybacks - beats letting the money rot due to inflation. When you issue shares, you exchange company pieces for money. I don't see what's wrong in doing the reverse of when you have too much money, spending it on buying back pieces of company. If I owned a company & I was only allowed to 'sell' pieces of my company, but not 'buy' them back, I'd say it's a discrimination against business owners.
I agree, but there's a small catch there. Stock buybacks is not the same as you - a business owner - buying back the shares of your company from someone else. It's about your company itself buying the shares from someone, maybe even from you.
at the same time, the people who have had the stocks the whole time have been making money as well. When in the last 10 years did apple tank? LoL
Amazing video you are so understanding
Great video with good timing. Just got my Apple dividend reinvested
Thank you Hari for making requested video♥️
Started the video, and liked within 1 second, like a loyal fan😎
Buybacks are better than dividends because you don't have to pay taxes on stock appreciation
You left out the most important part. Tho boards bonuses are stock performance based. Higher the stock price the bigger the bonuses. Hardly a solid foundation
While there may be reasons to oppose buybacks, they aren't the reason companies don't invest. Companies turn to buybacks when their cash outstrips the investment opportunities available to them. Returning capital to shareholders makes sense when shareholders can receive higher returns by reinvesting elsewhere than the company can buy reinvesting internally. Also, while falling business investment during the Great Depression did contribute to the economic decline, the reason wasn't share buybacks. It also wasn't excessive speculation or debt. Companies weren't investing because the federal government had allowed the money supply to crater and several banks to fail. This is why the FDIC exists and why the Federal Reserve has been so aggressive recently. During 2008 and Covid they where well aware of what could happen if they failed to provide liquidity. Hostile business regulations didn't help either but those are the main reasons you had the Great Depression. Weak aggregate demand and terrible monetary policy.
“Opportunities available to them”. Yeah, because that’s how opportunities work, I just get to pick some like I’m shopping but sometimes the shops have nothing.
The reason they do it is because the CEO is too boring and lazy to create those opportunities.
Wonder what Steve Jobs would think of this.
When you're the most profitable computer company, most profitable phone company, most profitable streaming media company, and now 14th largest bank in the country, what innovation do you expect? Companies can't just decide to invent a new category of product. And as an investor, you generally don't want companies in too diverse of segments, you would rather invest in 2 companies instead.
@@TheBooban Apple TV was an investment, Apple pay, self driving cars, VR, their chip R&D.
The other question would be whether your would want Apple to expand out and enter more markets rather than sticking to its core markets?
If Apple wanted they could go into making trains, being a landlord, maybe owning a grocery chain. But is that sensible? Would shareholders even want them to do that?
The idea that they should randomly throw money at whatever is silly, and if that's what shareholders wanted Apple to do then they could vote in a board which would do that.
Or they could invest in Berkshire Hathaway which already does that since it owns Apple shares and then invests in a bunch of other stuff too.
Weak aggregate demand is because 50% of the population has little to no discretionary spending money. Why? Because companies and corporations are hoarding money instead of paying a living wage/higher minimum wage. So yeah, it is their fault, on many levels(lobbying to prevent living wage/higher minimum wage etc etc etc).
@@gomahklawm4446 That has always been the case. You're not really saying anything. If anything, the average man has it better today than for 99% of industrialized history.
Your Hindi dubbing is one of the best. i think you actually hire someone who understand your video topics and interpret like you did, not just a translator who just translate to Hindi from English like a bot.
Really appreciate the positive feedback Abhishek!
where is the hindi dub?
@@ishankapoor @LogicallyAnsweredHindi
Hey! Here's a suggestion please don't translate the titles of video as it'll limt your rech. Most of the video that reach most audience in India are in English and Hindi titles have samll rech.
@@LogicallyAnswered Hey! Here's a suggestion. To maximize your reach, it would be better not to translate video titles as well. English titles have a wider audience in India compared to Hindi titles, which have a smaller reach.
People who think stock buybacks are bad for the economy don't understand how the economy works. That money goes into the pockets of investors and is spent through the consumer markets or invested through the financial markets in other things 🤦🏿♂️ It doesn't just end up under some mattress
Fair enough
They also don't understand stock buybacks
Tell that to businesses that burned through their cash stockpile on buybacks, or worse yet borrowed a bunch of money for buybacks, only to later go bankrupt when things went downhill and they didn't have an emergency fund to fall back on. I'm sure that investors in companies like Kmart are real glad that Kmart spent a bunch of money buying back now worthless stock instead of investing in themselves to better stand up against Walmart.
@@shadowninja6689 The problem isn't buybacks; the problem is the misuse of buybacks.
Buybacks are for when either company's stock is undervalued or the company has more cash on hand than it knows what to do with.
I'm pro stock buyback. Most people work for a job that offer 401(K) for retirement, so almost worker is invested in S&P500 to some degree, so stock buyback is a good thing. Besides, since many companies have stock options for some of their employees, not doing stock buyback would means steady dilution of the stock prices. Also, if issue the profit out as dividends just means it'll get taxed twice before the shareholders get it, not a good deal (except for the IRS).
Fair enough
Good video.
There are many examples of hohum companies that use stock buybacks to increase their stk price. Like Auto Zone AZO 10 yrs ago was 400, today at $2,400. Pretty sweet
I, as investor, prefer dividends. Yes, buybacks potentially increases future dividends, but greater stock value continues to be money based on perception. Generally speaking, continue buybacks should be a red flag but the market has become complacent.
This video slaps no 🧢
bros really liking his on comments
It makes sense. Stock buy backs adds value to shareholders/company. Just like how dividends do. Except it allows Apple to continue their growth valuation instead of transitioning to a value company.
It makes sense in this situation as well because this is reserves, not profit. It's unsustainable because eventually they will run out of reserves so putting it into dividends will hurt once they have to stop. But buybacks aren't expected to go forever so they can stop once they empty the excess cash.
So investors are happy to see the increase value, the company can get rid of the bloat they don't need and, really, they are already doing everything they want so this isn't robbing the economy of investment.
So it's overall fine.
That dudes haircut at 4:44 wtf 😂😂😂
He's missing the point entirely: the executives and staff are option holders and buying back stock pushes up the value. Shareholder returns are merely a side effect! Going private will no longer deliver those returns to employees: QED: it ain't ever going to happen!
Why on earth would stock buyback be "morally wrong"? Stocks are basically loans with unpredictable interest rates. Buybacks are paying that loan back to investors with a hefty profit. I dont see anything wrong with that, actually that is a nice thing to do.
What is the guy on the left’s haircut at 4:42 lmao
nice video.
Now who own enough stock to advantage of Apple buying so much stock back?
This shouldn't be legal or the very least highly regulated. IMHO.
No, buybacks are just an alternative for dividends, plain and simple.
With dividends, you are "forced" to take the cash and be taxed, and only then you can reinvest back into the company if you want to.
With buybacks you can choose whether you need cash (sell some of your shares) or if you want to keep it all invested (and not be taxed)
Great video and apple is so cool :]
I'll be the disonnant voice here but buy back are ONLY another form of dividend (this might vary country by country depending how you're taxed on dividend vs profit from selling share thought). Apple is a hugely successfull company, which has already reached a size where they have excess cash and not really the internal creativity or entrepreneurship to make something of that cash. In the end, when you pay dividend you'll lower the company valuation (cause cash in bank is part of the valuation) and give some cash to the shareholder. The issue is : A lot of those share holder don't want cash, and especially not pay taxes on that cash right now, considering they'll then reinvest that cash in shares cause they're still at the point of their life when their personnal income make them net buyer. When you do a buy back, you actually let those that are here for the long game while also helping those that want to cash out (retirement, short term speculator ...) sell and go on their way. Those that sell pay the brunt of the taxes then (IF share sells and dividend are taxed the same way, which they should). Share buy back is just a good thing for company that reached the limit of internal developpement, that has no clear purpose for external developpement, and that still are earning a lot
You're right and I agree with you, but next time don't type such a wall of text. Almost nobody will read that.
Split it into paragraphs, try to make it shorter and more digestible.
It’s the board of directors that pay the CEO, not shareholders. I think the only way Apple can go private is if they’re bought out by an asset management company outright. Only they have trillions to spend.
$573billion in cash!!! Our national budget is barely 15 billion dollars. Oh my poor little cute corrupt Nepal😁
This is exactly why their stock is going up in a straight slope
Can i get a reply? Love the videos :))
Sure Codey :)
Aiiii, nice 🎉
Just because you own say 10% or 20% of the shares in a particular company doesn’t necessarily mean that give you that equivalent in voting power.
Can you elaborate? You literally own that 10 or 20 % of the company. Of course that amount of voting power doesn't help you if someone owns 51%, but.. you still have that voting power
buybacks enrich executives because they are opportunistic sellers of stock. Look at the insider sales stats - they are always selling big blocks of shares to enrich themselves. Small time investors on the other hand are making nothing from increased share value because they are not constantly selling stock, (in fact they may never benifit at all since Apple is not innovating, hurting their own competitiveness and reducing their liquidity)
12:16 misspelt error
Buybacks should be taxed more. It just pumps up the stock price, no value to anyone except the investors.
Nothing wrong with stock buy backs. If a company has excess cash it makes sense to buy your own stock back
If times get difficult and you need cash, you can sell that excess cash.
imagine living in a world where bur ing money on yourself to artificially look better to the creditors means more than using that money for growth, investment or just plain living large
edit: Conclusion: buybacks increase price for regular users ?
You see
Stock buybacks are unfairly maligned.
1) Stock buybacks are a way to undo previous dilution and return capital to shareholders.
2) It’s not like the money goes into the ether. When a company buys bank stock, it does so with cash…cash that shareholders receive when they sell stock. They are free to invest or spend it elsewhere.
3) If Apple were to announce a larger recurring dividend in lieu of buybacks, they would have pressure to increase it, maintain it, etc. This would remove an element of flexibility to maintain large cash reserves.
4) Apple’s R&D spend is like a Softbank Vision Fund every 4-5 years…except recurring and far more disciplined.
5) There are definitely companies that shouldn’t be making buybacks, but Apple is not among them.
I didn't know it was half a trillion sheesh
I hope they actually go private. Focusing on the customer and not shareholders is a smart move IMO, but I am sure it will have its own share of issues.
Did you know that private companies have shareholders as well
@@SiisKolkytEuroo depends on what kind of private company
@@kuhluhOG the specifics depend on country and legislation, but at least, by definition, any company that is not fully owned by a single person or entity, has shares and shareholders
@@SiisKolkytEuroo yes, and that's why I said "depends on what kind of private company"
📌Nice video, love how you take your time to educate your viewers. Right now, I am enjoying a good life and touring round the world with what I made investing. Indeed ,building a Portfolio income(investing) through a licensed investment adviser is one out of many ways to earn passive income.
Do what everybody else is doing if you are okay with only having what everybody else has.Information that will pay you everyday, you've got to stop saving all your money.
Venture into investing some, if you really want financial stability.
Choose to grow and elevate your mind by studying audios, videos, attending conferences that will give you the edge!
@@pucciofabrizio7053 Exactly, money is always eager and ready to work for anyone who is ready to employ it. That is why it’s nice to start up an investment now. I have researched about this bitcoin and I found it profitable.
@@stanislavatlas7301 I have been researching all this while for a digital asset investment and I found bitcoin to be the most profiting of them all , I’m definitely bouncing on the opportunity, thank you so much.
I understand the fact that tomorrow isn't promised to anyone, but investing today is a hard thing to do because i have no idea of how and where to invest in these?
@@michealnguyen4989 In situations like this,I always recommend to people on getting guidance at least from someone that understands price action and all that while you strive on improving yourself by watching videos and learning fundamental analysis.
real estate
They just want privacy about their stock. Well documented video,Hari.
huh
The buybacks have nothing to do with the corporation’s privacy. Regardless if they spent a trillion or zero dollars on buybacks they are still subject to the same SEC filing and reporting requirements of all publicly traded companies. Buybacks are purely a mechanism for enriching their shareholders (and seeing as the executives are largely paid in stock…themselves)
@@CaptainMauzer dude chill it is an reference to their all products having atleast a tagline containing "privacy"
Why does the 10 percent change ? They increase their share, why would that change the 10 , doesnt make sense, the pie didnt change.
Agreed.
If they give out the same total amount of money on dividends, then yes every share gets a bit more. But in regards to voting power and all the stuff, apple just "owns" the stocks instead of some random people or banks
1. Mathematically, economically and there is no difference between buyback vs dividend. There is only a tax implication which is not a big deal. Those who reinvest their dividend in the same stock which paid the dividend, are effectively and inefficiently engaging in the buyback, in a slightly more expensive way, because they also pay taxes on that dividend.
2. Read Free to Choose by Milton Friedman or at least watch that series here on RUclips to learn what caused the depression.
Aren't they just enriching themselves by spending the company money?
It's interesting to me that nobody talks about how the purpose of companies changed (9:40 and 10:04) which imo is a bad change.
Sooo why not Just normal dividends?
Taxation. Investing can be deducted from profits in most countries. Plus when you pay out dividends there are also Dividend Taxes. The idea behind it to simply be able to reward shareholders more.
Apple actually buys both shares and pays out dividends. The more shares they burn the less dividends they have to pay so it effectively saves them money while rewarding shareholders even more.
@@Cerandus it saves shareholders money
Of course, Apple is too potent and rich. This is not even a question haha
Apple would have been better off spending that 500+ billions to buy Netflix + few Hollywood studios and make its content business THE STREAMING PLATFORM to be on.
Apple is buying stock from stock holders that are selling their stock. The sellers get that cash, and that cash goes into the economy.
All that money and Apple hasn’t really come out with any new products, they get rid of the iPod touch instead. The iPod touch has potential, it’s a cool device and they just drop it. $6 billion on R&D per quarter and they get rid of the iPod touch, hope all that money on R&D is actually going to creating new stuff.
I knew that it was buy back as soon as you said it’s not R&D 😂
Or even just spending it on feeding and healthing the world many times over
😮
hey bro .sorry for not commenting
Ya. Investment always is better than buybacks. Just ask att shareholders how much they like atts "investments". There's a very good reason to do buybacks.... You're good at your core business, and not at investing into other spaces. Forcing investment causes businesses to create conglomerates. Apple would alternatively own an additional half trillion dollars worth of other companies.....that's not helpful.
Trying to wrap my head around how investing in buy backs are bad for the economy while other forms of spending aren't:
Buying equipment - benefits equipment company and its employees
Buying advertising - benefits ad companies and employees
Increasing dividend - gives investors extra income, boosts spending in economy
Lobbying - congressmembers make money, lobbying firms and lobbyists make money
Hoarding cash - definitely detrimental to both economy and usually the company as wekk
Acquisitions - doesn't seem to benefit economy, most similar to buybacks
Buying back stock - allows investors to sell their shares for a little higher, kind similar to increasing dividend.
Interesting
That’s not what caused the Great Depression.
Not buying iphones anymore has been one of the best decisions of my life
Why? I haven't bought an iPhone either since the 3GS, but what does it have to do with the topic? :D
No and yes tbey areprotectd bynot hVing to compete.
funny konmai number
you have to be doing a lot other things right for stock buy back to make sense for your company.
this is why just isolating one aspect of a situation and talk about it out of context is usually misleading.
just like some people think the US is rich because it prints money or whatever isolated reason they want to focus on. or that apple is only successful because of marketing.
DOPe
IAM trying to understand how buy back is important to Apple what is the catch to me I think someone is laundering money using buy back as a shield but reality someone is stealing money from Apple.
The "catch" is, that buybacks are just an alternative to dividends, plain and simple. Apple is a profitable company, and if they had not spent that money on buybacks, they would have spent it on dividends.
Buybacks are better for investors as they let investors choose if they want the money (by selling some of their stock) or if they just want to keep all of it invested. With dividends you are "forced" to take the cash and be taxed for it.
Apple is just a successful business that can sell the same overpriced thing per year and some people still buy it because of the IOS brand.
LETS GOOOOOOOOOOOOOOOOO
that's not a bet
I'm wondering what Apple is getting in return for their 7 billion a quarter invested in r and d. a slightly faster iPhone? surely they should be getting all manner of incredible new products for that
Are you actually aware that they started designing their own cpus for macs, with unparalleled efficiency
@@SiisKolkytEuroo sure but thats something for their existing products. I'd expect whole new product lines for that much cash.
This should be illegal and the spare cash should go to the shareholders as dividends
Theoretically it should raise the price of the remaining stock and then you could sell a bit of stock as an effective dividend
No, buybacks are just an alternative for dividends, plain and simple.
With dividends, you are "forced" to take the cash and be taxed, and only then you can reinvest back into the company if you want to.
With buybacks you can choose whether you need cash (sell some of your shares) or if you want to keep it all invested (and not be taxed)
For the algorithm 👍🏽
They r stock investors. They prob reinvest it into Facebook or something.😅
It’s not apples job to prop up the economy.
True but let's not neglect that every company shoud have a social and environnemental responsability (providing good wages, not abusing of the Earth's ressources,...à
@@elianirenge7198 “should” doesn’t matter in the real world. Only in idealist’s fantasy worlds in their head.
I hope this company gets reckd.
Seems more like the way a company would be run in a Plutocracy, or, if the 2014 study out of Stanford was accurate (Congress votes against constituents 98% of the time if the views do not align with Corporate lobbyists) then the way they would operate in a Corporotacracy since the companies are the ones controlling governments to begin with even when sided against by a super majority of private citizens. If that's the case, it is no wonder countries in the West are so fractured. When governments openly go against what is best for it's own people, or what said people want to appease a minority (ei normal people being sacrificed at the whims of the ultra wealthy) things tend to break. Just ask the ancient empires of Babylonia. Or Rome. Or Portugal. Or the British. Or Mongols. Or Spanish, or the British again. The Gini Coefficient goes over that magic number of 0.40, and within two decades the Empires fall apart. The US is the first to survive over 20 years without falling into Civil War, being taken by opposing Empire/s, or peacefully giving up it's plac as the world's leading Empire with a GC of 0.49. For reference, at 1.0, it would mean 1 person/entity in the country owned all of said countries wealth. At 0.0 everything would be distrivuted perfectly equally, equating to everyone earning roughly $150K/yr. Obviously, with over half of the country's full time workers earning under $45K, we are quite a ways from that, and if we remove the top 1%, average income drops to just over $27K/yr.
Gotta love Capitalism in a Constitutional Republic where over 50% of laws in general are unconstitutional. If corporate interests are voted in favor of 98% of the time they are opposed by the masses, is that really a surprise though? maybe we should ahve an AI go over every Federal Law and bring a case to have all of them stripped/rewritten to actually fall within said guidelines of the Constitution and Bill of Rights and see exactly where we stand. Legal scholars, get on it ;^) .
So corporations nowadays work for themselves and shareholders but not for the market, not for everyone. Its like a small group is using everyone. I hope that there will be corporation who thinks about the market. For now its capitalism.
Not Appreciated the Apple retalier which is overpriced consider part of greed or little stealer!
The money going into stock could have been going into R&D - fair enough. But what about the innovative new ideas that shareholders might want to explore with their accumulated capital returns? If shareholders can't become wealthy and enjoy the value of owning shares, all the wealth-creating power of the modern American corporation is stifled. Nobody would ever invest in the IPO of a new and innovative tech company if the stock never appreciated in value or returned anything. The opportunity to accumulate and enjoy wealth is part of the system - it's not arbitrary or short-sighted. That's why companies exist - to make the world a better and wealthier place.
Think bigger! You are arguing against yourself here: you are saying that companies can take the public's money in stock offerings to operate and develop products, and they can invest earnings in R&D, but they shouldn't prioritize returning money to the shareholders? Who actually owns the company and its resources? Why would shareholders invest in the company to begin with if the company management is not supposed to consider their interests?
The shareholders own the company: the company cannot legally choose not to seek the interest of the shareholders - "It's good for the shareholders but bad for the economy" is fallacious, because the shareholders participate in the economy, and you wouldn't have an economy if not for investments and corporate ownership structures. You also did not mention the dividend double-taxation problem which enhances the value of buybacks for investors by converting annual profits into stock appreciation which would be taxed once a reduced long-term capital gains tax rate.
Thanks as always for this neat video. I'm pushing back because you make thoughtful videos and I think my perspective can help add some balance.
ignore this comment...
hahaha, u didn't
I see a lot of people hating on stock buybacks, but what else is Apple going to use this money on?
R&D? They already have as much resources as they want for R&D, but they just don't have the best minds. Reinvesting into the supply chain? Apple already has one of the most efficient supply chains in the world. The employees? Apple already pays employees a stupidly high salary, and most tech workers don't even do it for the money at this point. Most tech workers do it to advance the world. That is why Apple can't attract the best talent. Is Apple supposed to invest this into more acquisitions? If they thought it'd be strategically sound to buy a company, they already have tried their best to buy it.
We're left with one last option, and that's to secure the company's future. Buybacks do exactly that: they decrease volatility, appease shareholders that would've otherwise left the company and caused it to crash in favor of some other stock, and it prevents the company from falling out of many stock indexes/composites long into the future. It just simply makes more sense!
Apple doesn't "make waaay too much money...", that's not the problem. The problem with Apple's wealth is that it is earned by antitrust, extortion, slave labour, and psychological manipulation, not to mention planned obsolescence and short life cycles.
The problem is Apple is making money breaking their own products to coerce new sales. People try to pay their way out of early deprecation by spending 3x more than they need to with the EoL dead end date constantly looming. They get it by DRM, rentseeking appstore developers, and intentionally making their own products less useful to the purchaser just to be petty against the competition.
The way Apple gets rich is the problem, it has nothing to do with how much money they make and everything to do with how they made it that truly matters.
you sound like a woke Android user.
Oppps
Ooops
Stock buyback is very good for investors. this report is extremely bias against buybacks. Investors makes gain without the tax burden. It's a great move. If there is bias against buy back. what about expanding the shares. The report does not mention it. BTW, Apple does not make too much money. thats like asking are you breathing too much air. Your report is suggesting market control. Wrong, Wrong, Wrong
I was very close to being first
Thanks for being early Codey!