Yeah, I was just reading about this trying to understand it, and after thinking about it seems kind of like saying "we think we're going to grow, but we have nothing we can think to invest in to help make sure that happens".
It seems like a way of signaling a company is completely directionless.
Also, fun fact, [most of largest stock buybacks in history have been from Apple](https://finance.yahoo.com/news/apple-110-billion-stock-buyback-220603961.html).
> it seems kind of like saying "we think we're going to grow, but we have nothing we can think to invest in to help make sure that happens".
It's how tech companies give stock options to employees, which is a fundamental benefit of working at any decent tech company. Stock options are attractive to employees because then if the company does well while they are there, they benefit directly.
From the company's perspective, it's one of the best forms of compensation because it strongly incentivizes being a team player and everyone contributing in a sincere and earnest way.
Stock buybacks are awesome, so much of a better approach than dividends.
They do that too. But stock options give employees direct compensation for helping the company do well, and companies run better when everyone is part of the team and the profit sharing.
It's better than wasting $10 billion and then scrapping the project after ten years like they did with the Apple car. They aren't cutting their R&D funding. For the last three years their net income has topped $90 billion per year, so they can afford to do some buybacks.
Hm? It's great. The company recognizes that they have no further ways to put my capital to work. Instead of wasting it on pet projects, stupid acquisitions or senseless diversification they decide to return money to the investor. I can then invest that money back into other stocks.
This whole comment section is ridiculous. Returning money to the investor when no new project can meet the RRR is a sensible move. The company works for its owners, not for the sake of the company.
Highly doubtful that there are no worthwhile projects you can undertake with $110 billion dollars and thousands of employees.
Considering the geopolitical situation, Id be burning through capital trying to diversify my supply chains away from China.
Yeah bud. Tim is entirely motivated by his knowledge of supply chains.
The fact that his own compensation will significantly grow as a result of buybacks has zero impact on his decision making at all.
False. Especially if they’re buying them back at good / under valued prices.
When the shares are bought back, they are canceled out as if they never existed.
If profits are the same, then the earnings per share of every other share must go up. That increases the future income your existing shares can generate/are entitled to.
But at the same time the value of the company went down by $110 billion which, if the market is efficient, should exactly offset the increase in valuation due to future earnings.
If you're not going to hand out dividends what else are you going to do with your extra cash. I guess you could do R&D but does anyone actually think of apple as a growth stock?
Maybe come out with another iPad version
Or another 4gb of ram MacBook in 2024 /s
In all seriousness Tim was a CEO to optimize the company he’s overstayed his welcome, they are now turning into IBM
Invest in R&D, lower prices, bring back other less profitable device models, develop more product accessories, pay their staff more, further build out their support footprint, sink resources into improving products like Siri, remove slavery from production, further decarbonize production, make entry level devices have better specifications, etc.
Stock Buybacks are a waste of resources and were illegal for a very long time until a certain Republican Governor won in a landslide and allowed this festering cancer of infinitely increasing quarterly growth to ruin everything -
[About 80% of Americans don't have access to pensions](https://smartasset.com/retirement/average-retirement-savings-are-you-normal) because companies, trying to infinitely increase their quarterly growth, cut benefits to save money.
Stock buybacks are a white flag of surrender. It’s management’s way of saying we’ve run out of ideas but don’t want to forfeit our incentive plans that are based on share prices. If there’s one company that could come up with a wearable device that’s stylish and works well, it’s Apple. Tim Cook has all the imagination of a shoe clerk.
Maybe just go back to making groundbreaking products and improving the user experience rather than acting like a tech dictator and constantly changing stupid shit and expecting the customer just to put up with it because it’s expensive and shiny
Sounds like this is a move to prop-up their stock's value from falling. It's still a hell of a good company to hold a stock of. You never know what innovations they have up their sleeves.
They don’t innovate. They copy and steal. Just about everything they do another company did first. They’re just great at marketing. That strategy has paid off for them, but it’s not a long lasting solution.
Stock buybacks don't impact the underlying value of the company (on a per stock basis). In theory the dollar value of the stock should be the same before and after the buyback.
“The company also announced a $110 billion share buyback – the largest in the company’s history – as iPhones sales declined 10%. The drop suggests weak demand for Apple’s iPhone 15 lineup, which came out in September.
In particular, the company has lost momentum in China as nationalism, a rough economy and increased competition have hurt Apple over the past several months. However, Cook said on the call iPhone sales are up in mainland China in the latest quarter.
But Chinese manufacturers, including Huawei and Xiaomi, have also made notable gains as consumers who once would have considered Apple are now turning to national brands in China.
Market research firm IDC said Apple’s smartphone shipments tumbled a stunning 10% globally in the first quarter of this year.
The company’s stock price has slumped more than 8% in 2024 to less than $170 a share after reaching nearly $200 per share at different points in the past year. The company has overcome hurdles and threats many times before to reach a market capitalization of $2.6 trillion, making it one of the largest and most powerful companies in the world.”
Warren and the other investment gangs not getting enough from retail liquidity... I say raise rates to 7%. Rich people should suffer . Capitalism? Nah not even fair, get scammed and con artists. Poor people get no refunds, no one wins this game, not even billionaires. Die
Squeezing a lemon that's dry , that's your design of an economy? Pathetic, then awarding yourself money you printed, even more lame. Participating in this society and economy is such a waste of time and energy; do something and stop hoarding 🪙☠️
Apple is making the same iPhone over and over again from 1 - 15 for a decade while ppl are buying the same iPhones and throwing away the same iPhone 😳
What kind of logic is that?
Buffet got it enough and sold billions of apple shares 😲🥴🙄
Stock buybacks are so lazy. It s such a rubbish use of capital
Yeah, I was just reading about this trying to understand it, and after thinking about it seems kind of like saying "we think we're going to grow, but we have nothing we can think to invest in to help make sure that happens". It seems like a way of signaling a company is completely directionless. Also, fun fact, [most of largest stock buybacks in history have been from Apple](https://finance.yahoo.com/news/apple-110-billion-stock-buyback-220603961.html).
> it seems kind of like saying "we think we're going to grow, but we have nothing we can think to invest in to help make sure that happens". It's how tech companies give stock options to employees, which is a fundamental benefit of working at any decent tech company. Stock options are attractive to employees because then if the company does well while they are there, they benefit directly. From the company's perspective, it's one of the best forms of compensation because it strongly incentivizes being a team player and everyone contributing in a sincere and earnest way. Stock buybacks are awesome, so much of a better approach than dividends.
Ah, didnt know that. Thanks for sharing.
Couldn't they just give them cash?
I believe there are tax downsides to what you are suggesting.
They do that too. But stock options give employees direct compensation for helping the company do well, and companies run better when everyone is part of the team and the profit sharing.
It's better than wasting $10 billion and then scrapping the project after ten years like they did with the Apple car. They aren't cutting their R&D funding. For the last three years their net income has topped $90 billion per year, so they can afford to do some buybacks.
Hm? It's great. The company recognizes that they have no further ways to put my capital to work. Instead of wasting it on pet projects, stupid acquisitions or senseless diversification they decide to return money to the investor. I can then invest that money back into other stocks. This whole comment section is ridiculous. Returning money to the investor when no new project can meet the RRR is a sensible move. The company works for its owners, not for the sake of the company.
Highly doubtful that there are no worthwhile projects you can undertake with $110 billion dollars and thousands of employees. Considering the geopolitical situation, Id be burning through capital trying to diversify my supply chains away from China.
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Yeah bud. Tim is entirely motivated by his knowledge of supply chains. The fact that his own compensation will significantly grow as a result of buybacks has zero impact on his decision making at all.
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It’s not “analysis”, it’s just some common sense. Thinking that CEOs of successful companies always make optimal decisions is infantile.
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When did I say Tim has never made a good decision?
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Stock buybacks technically don't impact the value of the company. If they wanted to return money to investors they should use dividends.
False. Especially if they’re buying them back at good / under valued prices. When the shares are bought back, they are canceled out as if they never existed. If profits are the same, then the earnings per share of every other share must go up. That increases the future income your existing shares can generate/are entitled to.
But at the same time the value of the company went down by $110 billion which, if the market is efficient, should exactly offset the increase in valuation due to future earnings.
You misunderstood. You were talking to a socialist, they believe that other people know how to allocate your own capital more efficiently than you do.
If you're not going to hand out dividends what else are you going to do with your extra cash. I guess you could do R&D but does anyone actually think of apple as a growth stock?
Tell me you have no idea what to do with money iPhone sales down 10% Revenue down 4% 5th negative YOY growth last 6 quarters Net income down 2%
What should they do with the money
Maybe come out with another iPad version Or another 4gb of ram MacBook in 2024 /s In all seriousness Tim was a CEO to optimize the company he’s overstayed his welcome, they are now turning into IBM
Probably right
You mean you didn't like his $3,500 ski goggles that had a battery life of about 2 hours?
Invest in R&D, lower prices, bring back other less profitable device models, develop more product accessories, pay their staff more, further build out their support footprint, sink resources into improving products like Siri, remove slavery from production, further decarbonize production, make entry level devices have better specifications, etc. Stock Buybacks are a waste of resources and were illegal for a very long time until a certain Republican Governor won in a landslide and allowed this festering cancer of infinitely increasing quarterly growth to ruin everything -
I think they spend like 30b annually on R&D…
And if they are spending almost 4x that R&D budget on Stock Buybacks, they've clearly need to reprioritize revenues.
> this festering cancer of infinitely increasing quarterly growth to ruin everything Isn't this good for pension ?
[About 80% of Americans don't have access to pensions](https://smartasset.com/retirement/average-retirement-savings-are-you-normal) because companies, trying to infinitely increase their quarterly growth, cut benefits to save money.
Maybe not through a pension plan directly. But most people have some sort of savings/retirement plan where they invest in the stock market.
Stock Market can and did increase plenty without businesses paying everyone slave wages. Stop slobbing the knob of your corporate overlords.
Dividends.
Stock buybacks are a white flag of surrender. It’s management’s way of saying we’ve run out of ideas but don’t want to forfeit our incentive plans that are based on share prices. If there’s one company that could come up with a wearable device that’s stylish and works well, it’s Apple. Tim Cook has all the imagination of a shoe clerk.
Maybe just go back to making groundbreaking products and improving the user experience rather than acting like a tech dictator and constantly changing stupid shit and expecting the customer just to put up with it because it’s expensive and shiny
Sounds like this is a move to prop-up their stock's value from falling. It's still a hell of a good company to hold a stock of. You never know what innovations they have up their sleeves.
They don’t innovate. They copy and steal. Just about everything they do another company did first. They’re just great at marketing. That strategy has paid off for them, but it’s not a long lasting solution.
Stock buybacks don't impact the underlying value of the company (on a per stock basis). In theory the dollar value of the stock should be the same before and after the buyback.
“The company also announced a $110 billion share buyback – the largest in the company’s history – as iPhones sales declined 10%. The drop suggests weak demand for Apple’s iPhone 15 lineup, which came out in September. In particular, the company has lost momentum in China as nationalism, a rough economy and increased competition have hurt Apple over the past several months. However, Cook said on the call iPhone sales are up in mainland China in the latest quarter. But Chinese manufacturers, including Huawei and Xiaomi, have also made notable gains as consumers who once would have considered Apple are now turning to national brands in China. Market research firm IDC said Apple’s smartphone shipments tumbled a stunning 10% globally in the first quarter of this year. The company’s stock price has slumped more than 8% in 2024 to less than $170 a share after reaching nearly $200 per share at different points in the past year. The company has overcome hurdles and threats many times before to reach a market capitalization of $2.6 trillion, making it one of the largest and most powerful companies in the world.”
How do you lose money when using slave labor?!
Warren and the other investment gangs not getting enough from retail liquidity... I say raise rates to 7%. Rich people should suffer . Capitalism? Nah not even fair, get scammed and con artists. Poor people get no refunds, no one wins this game, not even billionaires. Die Squeezing a lemon that's dry , that's your design of an economy? Pathetic, then awarding yourself money you printed, even more lame. Participating in this society and economy is such a waste of time and energy; do something and stop hoarding 🪙☠️
Apple is making the same iPhone over and over again from 1 - 15 for a decade while ppl are buying the same iPhones and throwing away the same iPhone 😳 What kind of logic is that? Buffet got it enough and sold billions of apple shares 😲🥴🙄