It seems like just about every day I read an article about Apple’s cash hoard and what they should do with it. Yesterday they announced that they would be executing a stock buyback, or, put another way, require that just about everyone buy some AAPL stock at $400 or so. Seriously – when one considers mutual funds owning Apple stock, I would bet that just about everyone in the U.S. who owns any kind of company equity owns some.
And how have the results been with Apple’s existing stock buyback?
Apple’s existing buyback program was launched October 1st of last year. Since then, the company has spent $1.95B buying shares at an average cost of $478. The stock has fallen more than 40% since the buyback went live and shares purchased have lost 15% of their value.
Wouldn’t it be nice if Apple would just give us our money in dividends, instead of “investing” it for us in Apple stock? I understand there are tax implications, etc, etc but when we buy Apple stock we fundamentally want the company to produce earnings for us. We shouldn’t be forced to re-invest those earnings in the company.