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Comment by wvenable | Hacker News Reader

Ultimately what is Apple going to do with that 230 billion? Sitting on a hoard of cash is no benefit to the company or investors.

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Despite their current dominance, Apple knows that downward swings of fate come fast and hard in the tech industry. Consider that 10 years ago, the biggest names in mobile were Palm, Nokia and Blackberry, and now they're either gone or hollow shells. You can think farther back and find plenty more examples of unassailable kings who went bust in a hurry. Then compare that to e.g. Microsoft, who at one point looked doomed but managed to get relevant again by using their huge cash pile to break into a capital-intensive business, which they wouldn't've been able to do without it.

I imagine in this sector more than most there's a strong temptation to amass a huge safety net so you can ride out getting "disrupted". As a leftist Keynesian I don't particularly like it-- seeing all that money sitting there doing nothing drives me crazy-- but I understand the motivation.

In the big scheme of things all that money are not "sitting there doing nothing". They are probably invested in some short term bonds and therefore they make some other capital expenditures possible somewhere in the overall economy.

Where exactly is it sitting? Most money which is "saved" finds way back into the economy via fractional reserve lending by banks where it is stored. It's very hard to just make money "sit" somewhere these days when financial institutions all compete to lend and invest money.

Seems like Apple's money is invested in a diverse portfolio of equity markets: http://www.zerohedge.com/news/2012-09-30/presenting-worlds-b...

> so you can ride out getting "disrupted"

They do get disrupted. By themselves

If Apple manages to continue to do that, then they will go on

It isn't generating cashflow, but it can still be benefiting the company as a risk buffer. Cash to live through downturns, or purchasing new companies, or financing capital outlays for the production logistics which would be impossible for other companies.

That last one can be huge - if none else can build certain components for the same cost/volume as Apple then that's a key competitive advantage.

I wonder what would happen if Apple opened a public venture capital company, that also offers help. Wouldn't any company in the relevant areas prefer to come to them first ?

> Ultimately what is Apple going to do with that 230 billion?

Break into a capital intensive industry.

Apple bank.

I think this is more likely to happen than not. With all of their cards on Apple Pay I can see them turning the banking industry on its head, which wouldn't be a bad thing. Have you been to a "real" bank lately? My local PNC branch generally has 2 tellers and a 3rd "greeter", even when the line is 10 people deep.

Then there are things like charging for deposit slips and other necessary forms, and their online presence is terrible. I can't pay bills between 2AM - 7AM because: the system is down, or my loan balance is $0, or isn't in US funds anymore. WFT?! And the security is laughable (at least for a bank). When will they incorporate MFA? I think this is where Apple could really shake up the world, just like they did with cell phones and GUI computers before then.

Making cars is a capital intensive industry.

Not necessarily. Some part of car manufacturing is capital intensive but electric vehicles are far easier to make than gas ones and a lot of the parts that go into any car, no matter what brand, are usually bought to third party suppliers.

Charlie Stross submitted[0] a link to a post on his blog[1] touching on this last month.

[0] https://news.ycombinator.com/item?id=11373605

[1] http://www.antipope.org/charlie/blog-static/2016/03/follow-t...

Is there interest they could earn on that cash?

Why do you save money?

Go private.

That makes no sense. Apple management is going to buy out stockholders with their own money?

When you take a company private you have to bring in money from the outside, either using investor groups or borrowing.

Why not? If Apple's management and investors believe that the market is not pricing AAPL fairly, it makes perfect sense to go private.

Yes, but they can't do it with money that belongs to Apple, because the shareholders, i.e. the people that need to be bought out, already own that money.

They could just do buybacks until no one else has any shares left? http://seekingalpha.com/article/1725412-buyback-apple-could-...

Not true. A company can definitely take itself private by using its own money. It's already happening when a company is buying back its shares. i.e. reduction in equity by using cash, one on each side of the balance sheet. The shares are then entered on the books as treasury shares.

So the last guy to own a share owns the company?

That's not how it works.

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