Written by Tami Jones
Apple has decided to give its shareholders another 45 billion reasons to adore the technology giant. The announcement of a massive dividend plan and share buyback plan has rocked Wall Street today and given investors, old and new, a reason to jump for joy. Apple's stock rose about 1.59%, or a $9.33, in early trading following the announcement.
After sitting on an amassed cash fortune of $100 billion, the world’s most valuable company by stock value has decided to share the wealth with its investors. Under increasing pressure from Wall Street to release money back in to the market, Apple has released a whopping $45 billion to attract a wider base of investors and reward its shareholders for their loyalty.
Many believe that former CEO Steve Jobs was hoarding the cash because of the meager days of the 1990’s and some observers believe he stood in the way of returning cash to the shareholders. It seems that his death in October of last year has opened the door to distribute the wealth back in to the market and to Apple’s most passionate supporters.
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Current CEO Tim Cook said the company is buying back shares largely to be able to award more stock to its employees without diluting the value of existing shares.
"We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure. You'll see more of all of these in the future," Cook said during a conference call with analysts early Monday. "Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business. So we are going to initiate a dividend and share repurchase program."
Given Apple’s reputation for its superior innovation and the most user-friendly products on the market, it seems the company has very little reason to fret in the future over how it reinvests its money.