Apple To Distribute a Record $100 Billion to Shareholders

Tim Cook, CEO of Apple Inc
Tim Cook, CEO of Apple Inc

In an unprecedented move by any other company in history, Apple Inc will be distributing $100 billion in cash to its shareholders be the time the year 2015 comes to a close. This announcement comes at the same time as the news that Apple’s revenues during the present quarter could be less than last year for the same quarter, representing the first decline in several years.

CEO Tim Cook also hinted that Apple is not planning to release any new products this summer, which is contrary to rumors that consumers could expect new iPhones and iPads this coming summer.

The cash distribution will take the form of a $60 billion buy-back plan, the largest such program in history. In addition, Apple will be increasing the dividend on its stock from $2.65 to $3.05 per share, a 15 percent increase. That number translates to a dividend yield of 3 percent at today’s stock prices, which brings Apple more in line with other dividend-paying companies. The average yield for the top US dividend paying companies is 3.1 percent, says Standard & Poor’s.

Investors in Apple have been requesting that the incredibly successful high-tech company open up the company’s vaults and returning some of the cash on hand back to them. At the end of last month Apple’s collection of cash was announced to be an incredible $145 billion, an unprecedented amount. Shareholder’s inaccessibility to this cash cache, together with a dearth of new, innovative products, has been blamed for the huge loss in the value of Apple’s stock this past winter.

When the new iPhone 5 went on sale on September 21st, 2012, Apple’s stock reached a high point of $705.07. Even after a 5 percent rise to $425 per share after the company released its fiscal second quarter earnings Apple’s stock is now only valued at 40 percent of its peak price.

“The decline in Apple’s stock price over the last couple of quarters has been very frustrating for all of us … but we’ll continue to do what we do best,” CEO Tim Cook said.

“The most important objective for Apple will always be creating innovative products,” he added.

Michelle Grathers

About Michelle Grathers

Michelle Grathers is an international tax expert. She has consulted for a variety of firms and high net worth individuals on all tax- and legal-related issues. She also helps new companies develop payroll services, statutory audits and mergers and acquisitions. Contact Michelle at michelle[at]businessdistrict.com