First time, Apple’s per share value exceeded to $600 figure after announcing a $10 billion share buyback at “Apple Conference Call” on Monday—with plans for a $2.65 share dividend later this year. Apple per share value recorded $601.10, up by $15.53 after announcing before market opening. The company has decided to spend $45 billion to reward shareholders over the coming three year campaign. Comparatively, the per share value of the company grew by 77% on Monday than its value a year before, and up by 554% since 2007. There is a big question, what are the factors which have enforced the company to invest the cash hoard into dividend? Presently, Apple has hoarded a cash of $100 billion in the bank, and it’s the right time for the company to reward their investors who has dedicated themselves for the growth of the company.
Besides investors, it’s really the time for the company to neutralize all employees’ equity grants and stock purchases. Apple has decided to adhere $2.65 per share which will be implemented from July this year and buying back will also be applied by October this year. Apple is not the first company to pay dividends, some other companies are also paying dividends to broaden its shareholders base. Apple’s main rivals such as HP and IBM have also dividends to their investors—due to financial crisis IBM has procrastinated its dividends plan this year.
Do You think that investing into dividend will affect Apple anyway? I don’t think so, the company has recently declared that 3 million new iPads have been sold in just three days after it was being launched. The circumstances depicts that the demand of the Tablets might be increased in coming days. One thing is quite clear that Apple has generated more cash from its “innovative products”.
Recently, the company had to face a stiff resistance worldwide due to exploitation of Chinese labors by its contract manufacturers in the mainland China. Hence, the company has need to spend some of its cash hoard for the welfare of labors who has been working for the company for number of years.
There are some other factors which are compelling the company to pay dividends to investors such as Apple has been treated as matured global brand. That’s why; to sustain the dignity of the global brand, the company will have to please its investors. Anyway, the company’s decision to invest its cash hoard into dividends is quite worthy, and I appreciate it.