spin. If you follow Reggie Middleton, you know that
Apple is pretty much on the ropes, as far as a growth
company.
So , its stock has dropped about 40% and they have
200 billion in the bank, offshore. So what's their
next move?
They say mea culpa to investors by buying back
their shares, to boost the price? while borrowing
money to do so, when they have savings?
perhaps.
Did they surrender to wall street and let it dine on
their Liver, with Apple sauce and Chianti?
maybe
Did they want to repatriate their ill-gotten Chinese
suicidal slave corps, without paying tax?
probably
I'll try to post the stories. In the world of screwed
markets, this story is almost normal.
Apple is still screwed though as a manufacturer.
that's why it's turned to financial tricks, like the
banks are doing.
Coming soon: Apple Bank.
open an account
get a free bushel
check this: Testosterone
pit
1
Wall-Street
Engineering Hones In On Apple’s "Offshore" Cash
Monday,
April 29, 2013 at 5:39PM
On
paper, Apple has no reason to borrow. Last time it issued bonds was in 1996,
when it flirted with bankruptcy and absolutely had to get its hands on some
moolah. After Steve Jobs returned in 1997, Apple wisely stayed away from Wall
Street and did its own thing. But that era is over. And a new era is dawning
upon the icon: Wall-Street engineering.
Apple
sat on $144.7 billion in cash and
marketable securities at the end of the quarter, yet it announced last Tuesday
that it would issue bonds to help pay for $100 billion in dividends and stock
buy-backs to be spread over three years – surely not to please some hedge fund managers who, after having
gotten stuck in the stock on
the way down, had been relentlessly
hammering on the company, trying to get it to unleash a torrent of cash.
Now
Goldman Sachs has apparently been anointed by Apple to lead a $17-billion bond
offering, in six parts with maturities ranging from three to 30 years,
according to Bloomberg’s “person familiar with the offering." Wall Street
will certainly come out on top, now that it has gotten its foot in the door.
Bond investors will earn a measly yield that will most likely be less than
inflation over time, and Apple
stockholders will watch their equity get replaced by debt.
… You
can’t blame Apple for this absurdity. It’s following in the footsteps of many
US corporations that fund dividends and share buy-backs with borrowed money,
rather than using the cash that is stuck in some offshore tax haven. They’re
doing what the corporate tax dodge code – and by extension, Congress –
encourages them to do; and what the Fed, in its infinite wisdom, through its
zero-interest-rate policy enables them to do.
Some
of the crown jewels of corporate America have reported declining revenues and
earnings, and have lowered their forecasts, and in doing so, have unleashed a
flood of obfuscation and excuses – from Easter falling on the wrong date to
lazy sales reps. Read.... The Worldwide Economy Is Fine, But The Sales Reps Are
Lazy - Or Something.
2 naked
capitalist
Financial
Media Celebrates Apple’s Tax Evasion Bond Deal
[note that it's the FINANCIAL media, not the Manufacturing
media, whatever that is]
As
is par for the course, the financial media is telling a story about a major US
company from the perspective of the investing classes, rather than the broader
public.
The
poster child is the New York Times’ Dealbook, in a story titled “To Satisfy Its
Investors, Cash-Rich Apple Borrows Money.” It third paragraph reads:
Apple’s return to the debt markets raises a
riddle: Why would a company with so much cash even bother to issue debt?
A
full seven paragraphs later, the article gets around to the last, and arguably
the most important reason:
By raising cheap debt for the shareholder
payout, Apple also avoids a potentially big
tax hit. About two-thirds of Apple’s cash — about $102 billion — sits overseas
in lower-tax jurisdictions. If it returned some of that cash to the United
States to reward its investors, it could have significant tax consequences for
the company. In some ways, the bond issue is a response to that tax situation.
“In
some ways” is an understatement. A simple Google search shows stories going
back several years of how Apple has been pushing for a tax holiday so it can
repatriate its overseas stash. One example is a February 2011 report from
electronista, Demands come despite federal budgetary crisis:
A variety of technology corporations are
among those pressuring the US government to give them a preferential tax break,
sources tell Fortune. Apple, Cisco, Pfizer and Duke Energy are specifically
named as lobbying politicians for a tax “holiday” in regards to repatriated
cash. Whereas the companies would normally be obligated to pay 35 percent,
their goal is allegedly to pay just 5 percent.
A
2012 story from United Republic focuses on Apple:
According to the Center for Responsive
Politics, Apple spent $2.3 million on lobbying last year and its lobbying
expenditures have been steadily increasing over the past decade – in 2000, it
only spent $360,000 on lobbying.
