that’s the topic my latest bloomberg columnthe basic settings are:
Apple announced that Updated record of share buyback plan It was the same last week too increased the dividend 4% increase to 25 cents per share. This pleased the market, and the company’s stock price has risen about 10% since the announcement.
this:
Given the market’s approval for Apple to send more money out of the company, the market should think Apple’s shareholders are better at allocating their money than Apple. To its credit, Apple made this happen. Of course, Apple still has plenty of cash on hand and some very strong market positions, especially when it comes to the iPhone. So it’s not like the market is telling Apple management they don’t know what they’re doing. Rather, the market sees Apple as smart enough to reconsider its most last-minute plans. This is a bullish number for Apple’s overall value.
There’s another side to this story that suggests a relatively bright future for Apple. By buying back its own stock, Apple management is showing that its stock is undervalued. This means the company is relatively optimistic about its plans already underway, as it intends to hold more concentrated shares in those plans. They’re not trying to pawn profits off to unsuspecting strangers, as a dishonest company might do if the entire company was corrupt. The market rewards this refreshing sign of honesty.
In other words, a signaled skepticism about new marginal projects for the most dubious projects is combined, in economic terms, with optimism about existing and supposedly promising infrastructure marginal projects. No, Apple says we can’t conquer the world, but what we’re developing will work. And the market believes it.
If you’re worried about Big Tech taking over the world, but want to keep improving your products, this is all very positive news. This is a sign that Big Tech’s influence has peaked, but its core products remain popular and likely to be further improved.
I’m still happy with my iPad Pro, but I’m not sure how much better it will be.
https://marginalrevolution.com/marginalrevolution/2024/05/the-economics-of-apple-share-repurchase.html?utm_source=rss&utm_medium=rss&utm_campaign=the-economics-of-apple-share-repurchase
