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Comment by kmfrk | Hacker News Reader

Do Apple still have the problem of not knowing what to do with all their money? I recall they had an absurd amount of money lying around that they needed to invest to get some decent returns on.

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Microsoft had a similar problem, but they solved it by creating an Online Services Division.

Online Services has consistently lost money but their solution was a one-time dividend of $3/share to all shareholders or $32 billion dollars.

I think the joke was that Online Services pretty much burned up all of their extra money.

I got the joke. Just pointing out that MSFT did distribute a lot of the cash, which is something that people have started to mention as something Apple might be pressured to do by shareholders.

Steve has said that Apple intends to start acquiring more companies, larger plays rather than small talent acquisitions.

They have $25B in cash or short term investments sitting around ($11B in cash or equivalents): http://www.google.com/finance?q=NASDAQ:AAPL&fstype=ii

They have invested pretty heavily in facilities/equipment, growing from $2.8B to $7.2B over the past four years. I'd imagine that's stuff like their giant new data center and partnership agreements in their Asian operations. Where they really bulked up is "Long Term Investments". None four years ago, $25B today (and just $10B last year). Unsure what that would entail...

I think they have closer to 50B in the bank. They were definitely north of 40 all of last year.

Unless Apple lied in their SEC filings and in doing so risked jail time for high level executives, I think you're mistaken. There are different designations for assets, but the "Cash and Short Term Investments" portion is $25B. Cash makes up $11.2B of that total. They have a little over $75B in total assets, which counts some less liquid assets like property and long term investments.

Most of their "long term securities" are actually short term by any reasonable meaning of the word. It's just a technical terminology thing for filings that doesn't mean what you assume it means. They have been north of 40 billion for a while.

The relevant thing is how much is liquid fast enough to use it for what they want to use it for. For that we should listen to Apple telling us directly (which they have repeatedly done), not just check some field on their govt filings.

> For that we should listen to Apple telling us directly (which they have repeatedly done), not just check some field on their govt filings.

Between trusting a company on what they claim and what they actually report, I'd go with what they report. That's what's legally binding. Not that the final result is much different, cash isn't an obstacle in whatever Apple wants to do (and hasn't been in quite some time).

You aren't listening. You're taking a field on a report which means X rather than Apple's statement about their Y. They are NOT THE SAME THING. You're simply looking up the WRONG STATISTIC from an official source and saying it trumps A DIFFERENT STATISTIC from another source.

Financial reports use phrases that sound like common sense things but actually have precisely defined meanings that are not equivalent to what they sound like they mean. Basically it's excluding a great deal of Apple's liquid assets because they don't fall under a specific definition.

No sense in arguing over something that is easily accessible (see Note 2 to the financial statements): http://www.sec.gov/Archives/edgar/data/320193/00011931251023...

Total cash, cash equivalents, and marketable securities as of 9/25/2010 = $51.011 billion.

50B in the bank? They must be buying Facebook.

Long term investments is more or less anything that they intend to hold for more than a year, including equity stakes in other companies. With their continuing large cash position, large cash inflows and quick accumulation in the category it's possible that they've been buying a combination of junk and t-bills.

Do as Richard Branson said when asked how to become a millionaire

"Start with a billion, then start an airline company"

They've said on various finance calls that they want it available to make some large acquisitions and do the big parts contracts.

Interesting, thanks for sharing. I just recall reading articles that made it sound like executives or board members were tearing their hair because of it. Must have been the journalists' mistake.

Probably analysts or their ilk tearing their hair out.

For Apple, it's probably quite advantageous to be able to essentially pay cash up front for next year's supply of a critical component, pay a partner to build a new plant, etc.

At least Apple isn't throwing their money away in stock buybacks like Ballmer.

It does make it hard for their competition when Apple is able to buy a huge set (sometimes "all available production") of components at a reduced price.

I am expecting an iPad price drop on the next version or an iPhone strategy (cheaper old bottom, new bottom, new top). This money allows for the iPod strategy to repeat with the iPad.

I'm not sure what they'd need the higher returns for; it's not like their investors are clamoring for higher dividends. It wouldn't shock me if Apple's policy of not paying cash dividends (in place since 1995) remains only to spite Michael Dell - but it seems unlikely that the policy will change any time soon, and investors seem fine with that.

Given that, it's probably in their best interest to keep most of it fairly liquid so they can move on product ideas and acquisitions.

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