When it reports its quarterly financial results on Tuesday, Apple will likely have a quarter-trillion dollars in cash in the bank.
That’s a greater hoard than any other company in recent US history, according to the Wall Street Journal, which reported the numbers on Sunday. For comparison, Apple’s cash pile exceeds the market value of Walmart and Procter & Gamble. The sum is more than the foreign cash reserves of the UK and Canada combined.
Some 93 percent of the company’s cash and other liquid assets are kept overseas. The Trump administration has proposed a tax holiday to encourage companies to bring money back to the US, as well as a lower corporate tax rate, fueling more speculation about how Apple will use its money. Apple CEO Tim Cook has said he’s interested in moving some of the company’s cash stateside if tax conditions are right.
One possibility is delivering a huge dividend to shareholders. Another is the possible acquisition of companies that are true giants in their own right. Capital managers suggested to the WSJ that Apple could buy a company like Tesla, valued at $51 billion, to push forward a self-driving car project. Another idea is buying Netflix, valued at $65 billion, to work on video-streaming and as a hedge against Amazon. An even more outlandish idea—still within the realm of possibility—would be to buy The Walt Disney Company, which has a market cap of more than $180 billion.
Apple also has around $88 billion in debt to fund shareholder payouts. But even subtracting that amount, Apple has by far more cash than any other company. The second richest tech company is Microsoft, which has $126 billion, not counting debt.
Another writer previewing Apple’s earnings over the weekend, MarketWatch columnist Tim Mullaney, said that the “seemingly foolish call” he made two years ago—that Apple’s stock could hit a value of $1 trillion by 2017—may well come to fruition. Apple set revenue and iPhone records last quarter, although growth in China slowed a bit.
Source: Joe Mullin | Ars Technica