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.
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