Why should Apple pay Dividends?
After this week’s Apple event, the writers in the finance world are busy to tell us why Apple should pay a dividend to its shareholders. The reasons brought up range from greed to theories from 1871 and worse. Fact is, Apple is not paying such dividend, and rightly so.
If you look at the opportunities Apple has with $100 Billion in cash, it is awesome. Besides of building a new campus, which will swallow a couple of hundred millions, there are some other delicious opportunities out there. Apple could buy a lot of interesting companies with pocket change. Twitter, Yahoo, both together and all kind of other stuff. With that kind of cash, everything is possible. Those starving for dividends and bonuses claim that Apple could pay a dividend and still easily go to the markets and get finance in all forms for acquisitions. True, but who would go to the markets and put themselves to the mercy of Goldman Sachs, Morgan Stanley and other experts in that business, if they don’t have to? Seriously, would you?
The cry for dividends is coming from the corner of some institutional investors that would like to increase their profits and, of course, their bonuses. Cashing in of a few hundred millions or more in dividends will leave a nice performance bonus on the table. For that they work it like politics. $100 Billion is a lot of money, even for the names mentioned and the institutional investors. It is worth to “lobby” and try to create some pressure. Shame on them and the press and media for playing it.