Apple’s $573 Billion Bet (& Are They Going Private)

Lock In 7% With Government Bonds:

Apple has spent $573 billion on something, can you guess what it is? Common guesses would be R&D, investments, and building factories but the answer is actually stock buybacks. That’s right, Apple has spent a whopping $573 billion on stock buybacks over the past 10 years. That’s over $400 billion more than 2nd place which is Microsoft coming in at $170 billion worth of buybacks. Apple is only doubling down on this strategy either as they're ramping up to purchase nearly $100 billion worth of stock every single year. While this often makes shareholders quite happy, it’s not exactly the best course of action for the economy as a whole. You see, not only do stock buybacks not reinvest the cash into hiring employees, innovating, and creating value in the marketplace but it also wastes capital by artificially pumping up stock prices. This is why stock buybacks were banned for nearly 50 years. Buybacks were banned right after the great depression with SEC regulation but they were unbanned in the early 1980s thanks to Reagonomics. This video explains the history of stock buybacks and why Apple ended up spending $573 billion on buybacks.

Earn Interest From The Government & Top Corporations:
(iOS App for US Residents)

Free Weekly Newsletter With Insiders:

Socials:

Discord Community:

Timestamps:
0:00 - $573 Billion Bet
2:33 - A Banned Practice
6:08 - Buybacks Make A Comeback
9:21 - Apple Bets Big
12:14 - The Tip Of The Iceberg

Resources:

Disclaimer:
This video is not a solicitation or personal financial advice. All investing involves risk. Please do your own research.

[siddhanthmaheshwari]

One important note is that dividends are taxes a lot more than buybacks. For an individual investor, it makes more sense the company uses buybacks compared to dividends

[me-myself-i]

Apple has transitioned from a growth-based company to a value-based company. They are starting to make a pretty consistent profit every year and use buybacks to return that money to shareholders. Similarly to how many other companies used to use dividends.

[sillyhead]

It's worth noting that stock buybacks create value for shareholders when their stock is undervalued and they destroy value for shareholders when the stock is overvalued. And because almost every CEO in America naturally believes that the stock is undervalued during their stewardship of the company, many stock buybacks occur even when the stock is overvalued, resulting in billions upon billions of shareholder value being destroyed every year by CEOs who are too proud to admit that they don't have an internally productive use of the cash and that the best use of it is to issue a dividend.

[balpreetsingh]

Great video as always. Keep it up Hari.

Buybacks might work great for Apple and Berkshire Hathaway, but it hasn’t always worked so good for companies that there stock tanked like GE. Dividends give the choice of reinvestment or spending it somewhere else

[frankm.d]

Just the simple fact that Apple Had 573B$ cash for buybacks is absolutely insane. I just watched a video that put 1B$ in perspective and I was gobsmacked

[peterfmodel]

Apples last buyback was funded with corporate bonds. I understand why they did this, but its main effect is to entrench those who currently control Apple. They had no issue raising the funds, but considering the cash rate right now, i suspect those who purchased apple bonds are not too happy.

[wifine]

You make such great and niche videos. Your video about being a try hard at college still hits me. Happy for your success

[daviidon]

Buybacks are better than dividends because you don't have to pay taxes on stock appreciation

[billybobinthehouse]

As a Apple shareholder, I don't think they are making enough money 😅

[xiphoid]

I'm pro stock buyback. Most people work for a job that offer 401(K) for retirement, so almost worker is invested in S&P500 to some degree, so stock buyback is a good thing. Besides, since many companies have stock options for some of their employees, not doing stock buyback would means steady dilution of the stock prices. Also, if issue the profit out as dividends just means it'll get taxed twice before the shareholders get it, not a good deal (except for the IRS).

[danielvasquez]

Lol this is one way of going private!! Buy buy back your own stock at massive discounts!!

[arthikalexander]

Wow this video actually indirectly answered a lot of questions I had about the influence of the financial industry and political motives on the macroeconomics of a country 😮

[teddy.joke]

noice vid as always, been supporting you since 2024, keep it up💪

[undivided_unified]

Stock buybacks ... nothing that makes society better in anyway, even though the company wouldnt be SH*T without the consumer.
Its time the consumer starts investing in companies that invest back!!

[SloeJuice]

Door needs to swing both ways for it to be a fair system. If you don't have a good place to invest your money as a company, nothing wrong with spending it on buybacks - beats letting the money rot due to inflation. When you issue shares, you exchange company pieces for money. I don't see what's wrong in doing the reverse of when you have too much money, spending it on buying back pieces of company. If I owned a company & I was only allowed to 'sell' pieces of my company, but not 'buy' them back, I'd say it's a discrimination against business owners.

[abhkr]

Your Hindi dubbing is one of the best. i think you actually hire someone who understand your video topics and interpret like you did, not just a translator who just translate to Hindi from English like a bot.

[Batmangutten]

While there may be reasons to oppose buybacks, they aren't the reason companies don't invest. Companies turn to buybacks when their cash outstrips the investment opportunities available to them. Returning capital to shareholders makes sense when shareholders can receive higher returns by reinvesting elsewhere than the company can buy reinvesting internally. Also, while falling business investment during the Great Depression did contribute to the economic decline, the reason wasn't share buybacks. It also wasn't excessive speculation or debt. Companies weren't investing because the federal government had allowed the money supply to crater and several banks to fail. This is why the FDIC exists and why the Federal Reserve has been so aggressive recently. During 2008 and Covid they where well aware of what could happen if they failed to provide liquidity. Hostile business regulations didn't help either but those are the main reasons you had the Great Depression. Weak aggregate demand and terrible monetary policy.

[replyfirst]

You left out the most important part. Tho boards bonuses are stock performance based. Higher the stock price the bigger the bonuses. Hardly a solid foundation

[mayurteli]

Very well explained ✅, Thank you for sharing Hari ❤️🙌🏼