There’s money in them Cupertino hills. Photo: Kevin Spencer/Flickr CC
Apple is reportedly planning an investor call for later today ahead of a possible bond sale, according to The Wall Street Journal.
This would be the third bond sale in the company’s history, and may be the first in which Apple issues bonds in euros rather than dollars.
In its earnings call in April, Apple acknowledged that the majority of its cash and securities are held offshore. Since repatriating this money would incur heavy U.S. taxation, it’s cheaper for Apple to raise money through bond sales. The euro in particular represents a very good deal, since it is currently at its lowest rate relative to dollar-denominated debt in six years.
Proxy advisory firm Institutional Shareholder Services (ISS) has recommended that shareholders vote against Carl Icahn’s share buyback proposal for Apple.
According to the ISS report, “[The Apple board] has returned the bulk of its U.S.-generated cash to shareholders via aggressive stock buybacks and dividends payouts. In light of these good-faith efforts and its past stewardship, the board’s latitude should not be constricted by a shareholder resolution that would micromanage the company’s capital allocation process.”
Tim Cook has acknowledged that Apple has bought back $14 billion of its own shares over the past two weeks — reacting to an 8 percent decline in shares following the recent financial quarter results.
In an interview with the Wall Street Journal, Cook admitted that he was “surprised” by Wall Street’s reaction to Apple’s last quarter, in which the company broke records by selling 77 million iOS devices over the holiday season.
Apple’s recent share repurchase is the largest of its kind for a company of Apple’s size over a similar timespan. During the past 12 months, Apple has bought back $40 billion of its own shares — part of a plan to repurchase a total of $60 billion. In the past two weeks Cook says that Apple bought $12 billion of its shares through an “accelerated” repurchase program, and a further $2 billion on the open market. Apple plans to disclose updates to its buyback program either next month or in April.
In the two weeks preceding every major Apple product launch, the buy-back companies start circling, trying to convince you to sell your old iPhones and iPads to them instead of the competition. This year’s iPhone 5S and 5C launch is no exception, and even Apple is rumored to be starting a buy-back program.
Gazelle is one of the oldest “recyclers” of used iOS devices, and we have recommended the service before. This year, though, their service is getting even better, because they are allowing now offering a price-lock guarantee.