Apple has a problem, said Yukari Iwatani Kane in The Wall Street Journal, but it is one that anybody would envy: a record level of cash in the bank. Apple stunned the market on July 19 with its best-ever quarterly earnings report, posting an 82 percent increase in revenue and a 125 percent increase in profits over last year. But it was Apple’s $76.2 billion cash pile that had Wall Street jaws dropping. That’s more than the GDP of 126 countries. It’s “a level of cash that’s preposterous by any metric,” said analyst Toni Sacconaghi. The question now: What to do with it?
Shareholders are calling on the company to pay them a dividend, but that would be a mistake, said Eric Jackson in Forbes.com. “Cash is to be used to grow the company,” and the tech giant needs money on hand to keep up its current pace of expansion and innovation. “I would rather Apple management have access to that cash—dry powder—than shareholders.” A better idea might be to “dramatically increase their store count,” especially in China, where the company has just four outlets, despite red-hot demand.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Create an account with the same email registered to your subscription to unlock access.
-
Netanyahu's Rafah attack vow snarls truce dealSpeed Read Hours before the truce deal was to be finalized, Netanyahu said Israel will invade Rafah regardless
-
Today's political cartoons - May 1, 2024Cartoons Wednesday's cartoons - beware of governor, biting debates, and more
-
Democrats defang GOP speaker ouster threatSpeed Read Rep. Marjorie Taylor Greene said she will force a vote to remove House Speaker Mike Johnson
-
Issue of the week: Raising the minimum wagefeature How will raising the federal minimum wage from $7.25 to $9 an hour affect the economy?
-
Issue of the week: Breaking up the big banks
feature There’s a growing realization that we need to end the taxpayer guarantees that Dodd-Frank left in place.
-
Issue of the week: The death of daily deals?
feature This is a “winter of discontent” for daily deal companies Groupon and LivingSocial.
-
Issue of the week: CEOs tackle the deficit
feature America’s top business leaders sent Congress an open letter urging immediate action on the $16 trillion national debt.
-
Issue of the week: Does Wall Street need speed limits?
feature High-frequency trading now accounts for as much as 70 percent of market volume.
-
Issue of the week: Victory for a bank watchdog
feature A New York state financial regulator accused a London-based bank of laundering $250 billion for Iran.
-
Issue of the week: A former megabanker’s conversion
feature Sanford Weill, the architect of the modern megabank, now favors the end of too-big-to-fail banks.
-
Issue of the week: Libor scandal rocks banking
feature The interest rate scandal is just beginning and may soon engulf at least a dozen other major banks.