So my last post was on Sir Allen and the defenselessness of investors against his attempts to wile away their fortunes.
Now we turn to flower of a different color. One with a substantially better reputation, Apple. Though perhaps we shouldn’t be so quick to separate the two.
Here is a chart of Apple’s stock return along with dividends
You can see that the last time Apple wrote a check to its investors was in the mid 1990s. Meanwhile you can tell by the share price and the volume (lower bars) that most of the money “invested” in Apple has occurred well after that.
But surely Apple is producing a product and making profit much, different than what Stanford did. Well where is that profit going?
Much of it is going into a War Chest that is earning largely negative interest rates. 
Its clear why Apple Executives might want to build up a fund to be able to battle it out with Google as long as possible. Its not clear why that is to the benefit of current shareholders.
Lets see what else Apple Executive saw fit to spend shareholder money on:
Here are Apple Headquarters at 1 Infinite Loop, Cupertino, CA
Nice digs. But apparently not nice enough. Apple wants a new facility. One fit for the Masters of the Technological Universe.
Here are so renderings of the proposed new building
And a cross section
How about the champion of the new Apple, Steve Jobs. Here is the home that Jobs demolished to make way for his new home
I don’t have pictures of Job’s new home or his new yacht. But I know the later is being designed by Phillipe Starck. One of Starck’s creations is below
None of this is to say that Job’s is a bad man or that Apple hasn’t done wonderful things. Instead its to compare this level of consumption with the payout to Apple shareholders.
Let’s add up how much of the iMac, iPod, iPhone, MacBook and iPad profts have been paid out to the owners of Apple. Well lets think. . . oh yes I have it now, ZERO DOLLARS! Not one single penny.
So far is this really different from what Allen Stanford did? I hear some of his investors actually got redemptions. But, I am sure Apple investors will get their money some day, right.
I mean how many pioneers who dominate their industry in a world class way ever go on to not pay back their shareholders.
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Sunday ~ September 11th, 2011 at 3:22 pm
georgesblog360
When I was in high school, I observed what appeared to be a contradictory view in commerce. I saw that success was measured by how many people an individual could say “No” to, and still make a living. Apparently, some have sharpened that view to a fine edge.
Sunday ~ September 11th, 2011 at 4:57 pm
Johnnie Linn
Can we have a breakout of the primary and secondary markets in the stock? And there has been a volume to support the market in the stocks so those who sold in disgust because of their lack of dividends have carried off their capital gains.
Monday ~ September 12th, 2011 at 9:38 am
Doug Bonar
Yes, an indication of how much stock Apple sold (newly issued or from its own holdings) would be interesting. Especially so given the statement that the stock price rise is funding the cash accumulation.
Monday ~ September 12th, 2011 at 12:48 am
Lord
Investors have no claim to their imaginations.
Monday ~ September 12th, 2011 at 1:08 am
Rex
One of the silliest article I have ever read, online or offline. What is finance reporting coming to?
Monday ~ September 12th, 2011 at 9:19 am
buddyglass
Um. Couldn’t it be said that Apple created profit for its shareholders by conducting its business in such a way that the share price has increased at a dramatically higher rate than the market as a whole? When you buy a share for $10 and it’s worth $100 five years later it’s hard to get too upset about not having received any dividends.
Thursday ~ September 15th, 2011 at 9:31 am
Boonton
Valid point, but what do you mean when you say your stock is worth $100 in five years? That means you tune in CNBC and observe that people who are selling their shares of Apple are getting $100. If you sell your shares of Apple someone will pay you $100. But this is the Ponzi scheme aspect. You’re only making money because you get someone else to bet that Apple will keep going over $100.
But what happens 15 years later? Steve Jobs is long gone. The wonderful new versions of the Ipad, Iphone and so on are starting to look old and dated (Palm Pilot anyone?). Out of that $70B or so in cash, Apple lost $20B in bad investments, blew another $30B in trying to fight Google to the death only to see some upstart Chinese company sweep into the market and trump both former titans. Now the company is making losses and the sucker who brought that share for $100 finds he can’t sell it for more than $15. Now where did the dividends go? Where’s the money now?
Monday ~ September 12th, 2011 at 9:41 am
Craig
Milk from the cows,
Eggs from the hens,
And a stock, by God,
for the dividends!
Apple touches on a number of disturbing ideas in the operation of the modern corporation–for one, the idea that “shareholders” are somehow something other than the owners.
Apple and Berkshire Hathaway are the two most conspicuous one-man shows going today in corporate America. (And how do you like those Berkshire dividends, by the way?) To a large extent, each is perceived as the organizational masterpiece of an individual genius. And Apple has already demonstrated its capacity for going to Hell in a bucket without Steve Jobs calling the shots.
In each case, I think we’ll wake up one day to find these once-proud entities are nothing but rudderless ships: Rembrandt’s workshop without Rembrandt in the first case, and just another soulless, inorganic conglomorate in the second. And in each case, the investors are nearly a religous movement. It’s a formula for burning through a lot of money…
Somehow, I think Berkshire is likelier to find a way to manage the transition. Apple seems more like a company determined to repeat its own history. But I guess we’ll see.
Thursday ~ September 15th, 2011 at 9:12 pm
pjcamp
Jobs at least used to be a bad man. The way he treated his daughter and her mother was despicable. Given his evident desire for control over how other people use Apple hardware, I’d guess he still is but that is not dispositive.