...converting cash back into shares is only a good thing if the shares preserve their value, it's an incredibly stupid thing if the share price subsequently falls or is forced downwards by shorting or false media reports such as an "iPhone delay" or the premature demise of Mr. Jobs. The less exposure Apple's liquidity has to Wall Street the better. The advice of this particular analyst is yet another despicable attempt by the market to extract short term gains out of Apple at the cost of it's very shareholders. Remember speculators can make money by the value of shares going DOWN! If, as a shareholder, you want to extract short term cash value from your shares, sell them. Don't expect Apple to commit acts that benefit Wall Street more than the company! Anyone who suggests that shares (whether they're your own or someone else's) are better than cash in the current climate is a complete and utter idiot. Period.

Very good point!

We have only seen the beginning of this worldwide economic recession. Sure, I could be wrong, but the point is, nobody really knows. So maybe Apple could buy back stock, but then again why risk it right now. The advice about owning your own stock is great, in better economic times. Can you guarantee Apple that in the next six months Apples stock won't tank even further, $25 a share, $10. Wouldn't $25 a share be the best time for Apple to buy back all their shares? Of course not for the investors, no, not them.

Hey here's a thought, why don't you go out and spend your 25 Billion dollars to buy Apple stock, what's that you say, you already own Apple stock and you're trying to dump it while the getting's go, gosh, no wonder YOU what Apple to buy the stock.

...to see how this would benefit Apple: they buy back stocks, the stock price goes up a little, short term, and longer term plans that need equity have to be forgotten.

Next week: Apple should start paying dividends!

Unlike some of the people who are commenting on this issue, I have the education to actually partially understand what the issue is here. First, I understand where the analyst is coming from with his recommendation, but I do think (as others have pointed out) that this would be a short sighted move. Basically, he's comparing the return that the cash is making sitting in the bank and the yield by buying back the stock. What this assumes though, is that Apple isn't going to ever leverage their cash stockpile. While it's true that they haven't made such acquisitions yet, that doesn't mean that Apple isn't saving up to buy something big. If MS had the kind of cash that Apple has, they would probably own Yahoo right now. But, given their cash position, they just couldn't swing it. If (and it's a big "if) Apple is going to try to make a large acquisition, I'm betting that they're going to make sure that they're successful.

Ultimately, the analysis that Bernstein is doing here is really pretty basic. There are a whole lot of smart people at Apple and I'm pretty sure that this has crossed their mind. If they've decided against doing so, I'm betting someone has a good reason for it...

Steve was very clear as to what Apple was going to do with its cash reserves on the last financial call. Apple feels this current economic situation will present several buying opportunities for Apple.

Just an educated guess here based on knowing a little bit of Steve's past and today's current tech environment, don't be surprised if Apple buys Sun Microsystems within the next 3-9 months.

Cheers