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Comment by lilbobbytables | Hacker News Reader

Why isn't that still a concern?

The idea was that they would borrow enough money to buy a majority of Apple's stock, and then repay the loan with the cash reserves. For that to work, the cash reserves must be close to half the value of the company.

Since Apple's market cap is now $790B, half the value is $370B, which means that even with the cash reserves, they'd be $123B short of being able to repay, and they'd need it available on day one to execute the hostile takeover. And like they say, $100B here, $100B there, soon you're talking real money.

Apple has also taken on debt since then, needed it to fund dividends since most profits trapped overseas. Also any acquirer still has to pay the taxes on repatriating those overseas profits if they want to use them in the acquisition. Given effective tax rates (US + CA) over 40%, they can only use barely more than half the overseas profits.

Essentially Apple's available cash is much less than it appears.

> since most profits trapped overseas.

That's certainly one way to put it.

The amount of money involved in an Apple takeover now would be beyond enormous. Even assuming they paid no premium on the current share price whatsoever, which is rather unlikely, they would have to stump up $500 billion or so. I strongly suspect it would be the largest such deal ever made though I'm too lazy to look it up.

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