Just after Apple has taken advantage of the new tax law to recover big portion of 252 billion dollars held abroad, it was said that they are going to buy back a hundred billion dollars of their stock. Apple made an announcement of its plans for having another buck load of cash by buying back roughly 75 billion dollars in stock.
A Bold Move
This gigantic feat that Apple is about to perform should be great news among shareholders since the stock price is more likely to increase in the upcoming weeks or months. On the other hand, the buybacks may expose the company as well to criticism that tax cuts it has received benefited most of its executives and investors.
As of this writing, the second quarter financial report of the company showed the fall of their iPhone sales by 17.3% from the same timeline a year ago to roughly 31 billion dollars. This is in part of a bigger drop in revenue in the Chinese region.
The service revenue of the company on one hand has seen big sales in their apps of about 11.45 billion dollars or 16.2%.
Won’t Go Down without a Fight
The reports however from Wall Street as well as Apple’s share price have risen to more than 5% in the opening of the trade. Investors also anticipated that there is going to be a slowdown in the sales of their iPhone and other peripherals for Apple devices like the best printers for Mac and so forth. Regardless, there were indications that the business is bouncing back.
Tim Cook, Apple’s chief executive mentioned that sales in China significantly increased at the end of the quarter. Also, Cook has attributed the growth of price cuts with the economic stimulus of Chinese government as well as cooling down trade tension with the US.
Because of this, Apple is foreseeing a revenue for the quarter will be around 52 to 55 billion dollars which surpass the predictions of analysts. And while there are critics revolving around stock buybacks, there are many economists stating that money is better to flow back to investor’s pockets and to the US economy rather than sitting behind Apple’s coffers.Read More