Apple and Steve Jobs Swimming In Cash


By Sean Ballent

While the weak state of the economy has automakers, insurance companies, and banks running to the U.S. government begging for rescue money, Apple Chief Steve Jobs is busy rubber banding large rolls of cash. How much cash? Apple’s back pockets hold a massive $24.5 billion plus short-term investments.

The biggest problem with that much dough is figuring out what to do with it. The possibilities are endless. Apple has so much cash that Jobs could go out and hire everybody in Silicon Valley to lifetime contracts. He could simply open up Apple’s wallet and buy Japanese consumer electronics giant Sony. Apple is already making acquisitions. The company recently acquired chip designer PA Semi for $278 million in cash. The PA semi team will be designing silicon for Apple’s iPods and iPhones. And with the tech falloff, Apple can use its cash to pick up as many start-ups as it needs.

Another way Apple can spend its cash is by buying back stocks. Though the iPhone and Macintosh computers have had surging sales, Apple’s shares have fallen almost 50% this year. Apple’s stacks of cash and short-term investments now represent a third of its market capitalization. With $8 million in cash being pumped out each year, Apple can afford to use at least part of its $25 billion in cash to repurchase shares. While this may seem like the best option, some suggest Apple just sit tight. With finance growing tight the companies with bundles of cash are the ones in the best shape.

Via Forbes