About this time of the month in April, Apple Inc. (NASDAQ:AAPL) CEO Tim Cook announced that Apple Inc. (NASDAQ:AAPL) was extremely interested in returning capital to Apple’s investors. First, he raised the dividend by 15%—this from a company that didn’t offer a dividend when Steve Jobs ran the company, and also announced the biggest share repurchase authorization in history. Not just for Apple Inc. (NASDAQ:AAPL), but in history. Initially, it was believed that Apple would repurchase $10 billion in shares, but Cook surprised us all with the announcement that $60 billion would be earmarked for share repurchasing.
Apple’s capital return program
“We are very fortunate to be in a position to more than double the size of the capital return program we announced last year,” said Apple Inc. (NASDAQ:AAPL) CEO Tim Cook. “We believe so strongly that repurchasing our shares represents an attractive use of our capital that we have dedicated the vast majority of the increase in our capital return program to share repurchases.”
Chilton Capital's REIT Composite was up 6.1% last month, compared to the MSCI U.S. REIT Index, which gained 4.4%. Year to date, Chilton is up 6.3% net and 6.5% gross, compared to the index's 8.8% return. The firm met virtually with almost 40 real estate investment trusts last month and released the highlights of those Read More
The original schedule called for Apple Inc. (NASDAQ:AAPL) to purchase 10 million shares in the third quarter of 2013 according to those in the know. A schedule that was criticized by many analysts and even Warren Buffett. Given the slide that Apple Inc. (NASDAQ:AAPL)’s stock has seen, Apple rapidly accelerated their stock buy-back in the last quarter parting with $16 billion in order to more triple its planned purchase which saw the company buying 36 million shares.
Acceleration in share repurchase program
Of the $16 billion Apple Inc. (NASDAQ:AAPL) spent, $12 billion came out of the company’s accelerated share repurchase program, $4 billion was spent buying shares on the open market, and in something that must terrify Chinese investors, the average price paid per share was $444.44. The number four in Mandarin is nearly homophonous to the word “death.”
That price is nearly two hundred dollars off the price that Apple Inc. (NASDAQ:AAPL)’s shares saw in the corresponding quarter a year prior, and over $250 more than the high Apple Inc. (NASDAQ:AAPL) was riding after the announcement of the iPhone 5 in September when the stock reached a high of $702.10.
If Apple Inc. (NASDAQ:AAPL) truly goes through with its plans to spend $60 billion in repurchasing shares by the end of 2015, in this most recent quarter they have achieved half of this goal and appear to have gotten quite the bargain given the stock’s rise following Apple’s most recent earnings report.
To put $16 billion in perspective, that is more than enough money to buy BlackBerry Ltd (NASDAQ:BBRY) three times, Nokia once with some change left, or if Apple Inc. (NASDAQ:AAPL) wants to continue with providing content, it could have purchased both Netflix and Barnes & Noble rather than investing in itself.