At today’s Apple shareholder meeting, the issue of dividends was brought to the forefront and promptly shot down. As a quick aside, Apple hasn’t payed a dividend since 1995 and it doesn’t look like they’ll be paying one anytime soon.
Speaking on the matter earlier today, Apple CEO Steve Jobs said that Apple prefers keeping its money safely towed away in the bank so that when the need arises for a “big, bold” move, it has the cash on hand to pull the trigger without having to worry about taking out loans.
“We know if we need to acquire something – a piece of the puzzle to make something big and bold – we can write a check for it and not borrow a lot of money and put our whole company at risk,” Jobs reportedly said earlier today, “The cash in the bank gives us tremendous security and flexibility.”
Apple currently has nearly $40 billion in cash, and while some are arguing that Apple owes a responsibility to its shareholders to either pay a dividend or initiate a stock buyback, you can’t argue with Apple’s stance that it needs to remain flexible in the event of opportune buying opportunities. After all, it was Apple’s purchase of Fingerworks in 2005 that ultimately led to the development of the iPhone, and it’s largely believed that Apple’s 2008 purchase of PA Semi was instrumental in developing the A4 chip used in the upcoming iPad.