Wall Street, government wants more of company's growing cash hoard
Despite moves to buy back shares in itself and the creation of a dividend program, Apple adds money to its enormous cash reserve far faster than it can distribute it -- a problem many companies would like to have, but one that is actually quite thorny for Apple. Wall Street appears to be orchestrating an effort -- or acting on insider information -- to put pressure on the company to make some kind of announcement for a future, additional dispersal of cash to investors. Meanwhile, governments have increased their calls for the "repatriation" of foreign-held profits.
Payout does not keep pace with massive revenue
For most companies, a payout of $2.5 billion dollars (working out to $2.65 per share for each of its 935 million outstanding shares) would be manna from heaven, but for Apple the significant dividend being distributed today -- only the second such payment in the last 17 years -- doesn't even begin to match its ability to generate revenue or add to its cash stockpile. Over the course of fiscal 2013, the company will spend an additional $7.5 billion in dividends, but is likely to finish the year -- or indeed, this quarter -- with more than that amount added to its cash balance.
Stock trading at levels not seen since 1980
Consumer electronics retailer RadioShack reported an unexpected second-quarter loss and said it would stop paying stock dividends. In one day shares have fallen over 33 percent, and are trading at levels last seen in 1980. The stock is down 74 percent this year alone. The decision to suspend the dividend comes after the surprisingly weak earnings announcement coupled with an imminent debt maturity of $375 million due in 2013. Stopping the payment will save the company about $50 million per year.