Is the Apple Share Buyback Plan Good or Bad for Investors?

by Zach | February 10, 2014 9:09 am

Apple (AAPL[1]) repurchased $14 billion of its shares in the two weeks following quarterly financial results. In an interview[2] with WSJ, Apple’s CEO Tim Cook said that he wanted to be “aggressive” and “opportunistic”, as he was surprised by the decline in shares after results.

These Apple share repurchases are a part of the previously announced $60 billion repurchase plan. Cook said that the company will provide updates to the plan in March or April.

The tech giant has more than $150 billion in cash sitting on its balance sheet and they generated about $23 billion in cash from operations during the last quarter.

Apple has not been very aggressive on acquisitions; they spent $525 million on all acquisitions last quarter. On the other hand, Google (GOOG[3]) spent $3.2 billion on acquiring Nest Labs alone.

AAPL’s management has been under increasing pressure from Carl Icahn to increase the buyback program. At the end of this month, shareholders will vote on Icahn’s motion to increase the program by $50 billion by the end of September.

As 78% of Apple’s total cash is parked overseas, Icahn proposed plan will have to be debt-funded.

Do you think the management’s confidence in shares will be good for AAPL?  Shares are up about 1.4% prior to Monday’s opening bell.

APPLE INC (AAPL): Free Stock Analysis Report[4]

NASDAQ-100 SHRS (QQQ): ETF Research Reports[5]

SPDR-TECH SELS (XLK): ETF Research Reports[6]

To read this article on click here.[7]

Zacks Investment Research[8]

  1. AAPL:
  2. nterview:
  3. GOOG:
  4. APPLE INC (AAPL): Free Stock Analysis Report:
  5. NASDAQ-100 SHRS (QQQ): ETF Research Reports:
  6. SPDR-TECH SELS (XLK): ETF Research Reports:
  7. To read this article on click here.:
  8. Zacks Investment Research:

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