Apple has made a $US14 billion acquisition … of itself.
CEO Tim Cook tells Daisuke Wakabayashi of Wall Street Journal that over the past two weeks, Apple has purchased $US14 billion, or roughly 3%, of its own shares.
Cook says he was “surprised” by the drop in Apple’s stock after its earnings, and he wanted to be “aggressive” and “opportunistic” with the buybacks.
Cook said this buyback “means that we are really confident on what we are doing and what we plan to do.” In general, big share buybacks like this send a signal that a company believes it’s underpriced.
Anonymous Apple analyst Sammy The Walrus IV pointed out on Twitter that this is the equivalent of Apple buying, “four Nests and a Motorola.”
Wakabayashi asked Cook if this was a sign Apple would shy away from making big acquisitions.
Cook’s response is fascinating: “We have no problem spending 10 figures for the right company, for the right fit that’s in the best interest of Apple in the long-term. None. Zero.”
This should provide a jolt for Apple tomorrow.
It should also get an interesting reaction from Carl Icahn, who has been hounding Apple to be more aggressive with its mountain of cash.
As of last quarter, Apple had $US159 billion in cash.