Icing on the Apple

 | Sep 13, 2011 | 6:29 PM EDT
  • Comment
  • Print Print
  • Print
Stock quotes in this article:




This morning Morgan Stanley (MS), in a nice push to buy Apple's (AAPL) stock, mentioned that it might be initiating a buyback or a dividend. Frankly, I don't even care if Apple gives us anything other than stock appreciation. This stock has been one of the greatest wealth creators of our time. A dividend would be icing on the cake.

But a buyback? Forget about it. Don't bother. Save the money for a rainy day. That's right I would prefer nothing to a buyback because there might as well be something worth buying further down the road.

It's just a waste of money, particularly in a situation where a stock can be down huge off of a European bank rumor, and the company would have just bought a ton of stock back at a higher price.

The justifications for a buyback constantly hinge on the return of capital. But, you know, I think that we can't demonstrate anything that most buybacks have done except waste capital.

You know how adamant that I am about this point going forward? If Apple offers up a dividend I am thrilled. If they do a buyback? I will just like it less.

Yep, that's how silly and self-serving to management I now regard buybacks to be.



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.