I have been trying to find a justification for Apple’s cash reserves that are now worth $76 billion, and I haven’t succeeded yet. So I thought I will pin down my thoughts here and see what you all think.
You might have heard that Apple now has more money than the US Treasury. Its cash reserves are enough to buy a company like Netflix. Steve Jobs has always defended the cash reserves saying that it gives the company “flexibility and security”, and it can take “big and bold risks”, meaning huge acquisitions.
But Apple hasn’t made any huge acquisitions yet. It doesn’t pay dividends to its shareholders either. So, as far as I know, presently if an Apple shareholder wants to profit from the stock, the only way to do it is sell it when the price goes up, which has been steadily for a long time now. Dividends, however, can benefit the tons of shareholders who have never sold any of their Apple stock and do not plan to do it in the near future either.
A company needs a healthy cash reserve for the rainy days and for growing inorganically. Apple should definitely maintain a good cash pile too. But, $76 billion? Isn’t that a bit too much to sit on when there are better things to do with a part of that sum?
May be Apple is waiting to acquire Facebook or something like that, but considering the way Apple operates (innovation and organic growth), I highly doubt if we will get to see an acquisition like that from them anytime soon.
What do you say?
Abhijeet Mukherjee is a blogger & web publisher. This is his personal blog about blogging, productivity, internet marketing, social media and other random stuff. 
