Apple Inc. now has a whopping $76.2 billion dollars of cash on hand, including cash, short-term, and long-term marketable securities that is more money than the entire GDP of some small countries. To the uninitiated, the first thing you say when you see a number like that Apple must be a very well run company to have that much money in the bank. I mean any company that has all that cash and relatively little debt must be the best run company in the world, right? Wrong. One of the first things you learn in business class is that when a company has a substantial amount of cash on hand they are actually not that well run at all. Public companies, like Apple, should be either reinvesting that money into their business through R&D and acquisitions or they should be returning some of it to their shareholders in the form of dividends and share repurchases. Apparently, Apple is doing neither.
Honestly, I think that functionally Apple is a very well run company but the best guidelines I mentioned above have held tried and true for decades. A company of Apple’s size should not have anywhere near that much cash just lying around, especially when there are so many attractive acquisition targets out there. As of late, Apple has been rumored to be mulling over the possible acquisition of Hulu and while I can’t say that is a bad idea it is nowhere near enough. Apple is pretty good at ignoring what just about everybody has to say but if they don’t make some major acquisitions soon and I’m talking $20-25 billion worth then their shareholders are going to seriously start clamoring for them to return some of that cash to them.
So there you have it, Apple really does need to get rid of some of this cash. If you were Apple, what companies would you buy or what technologies would you invest in and why?