Friday, February 7, 2014
Apple Purchases $14 Billion Of Its Shares In Last Two Weeks
Apple has a plan to return a large chunk of its profits to its shareholders. It latest repurchase of $14 billion of its shares brought the sum of its repurchases this year to $40 billion. It also returned $3 billion to its shareholders in the form of dividends. This is part of a plan that amounts to $60 billion in repurchases and dividends. Share repurchases reduce the number of shares outstanding on the market. A reduction in the shares outstanding increases the value of the shares that remain on the market. A share repurchase is similar to issuing dividends to shareholders. That's good news for shareholders who have put pressure on Apple to return some its retained earnings to them. The implication, however, is that Apple does not see investment opportunities for the capital that it has returned to shareholders.