AAPL Spells 'Dividend' for Apple Stock Holders

Apple announces plan to pay investors billions of dollars in dividends.
9:11 | 03/19/12

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Transcript for AAPL Spells 'Dividend' for Apple Stock Holders
Hello everyone I'm Stephanie -- in New York it's Monday march 19 I should say. Breaking news at this hour about apple the company announcing just minutes ago that is going to start offering dividends and will buy back ten billion dollars of its own shares aiming at a talk about. The big news of the morning and discuss all the business headlines -- -- treatment from Bloomberg TV good morning Allen and no idea what -- it is. It is Monday -- very excited at nineteenth and let's just breaking news about apple but the dividend and buyback plan and give us the details. Rates so they came out over the weekend so that they were going to be holding this conference call with investors put out a press release one hour ago started a conference call -- half an hour ago that just wrapped up two dollars 65 cents a share. He's going to be the dividend the company is paying starting in July it's not paid -- dividend since 1985 before Steve Jobs came back. And as you said buying up to ten billion dollars in shares and that's going to be over a three year period to put it all together. And the company says its plans to spend 45 billion dollars. Over three years keep in mind it's a company that is approaching a hundred billion dollars. In cash on its balance sheet and we now it's -- to have another record weekend for the iPad at just came out on Friday -- They cash keeps flowing -- so it's not like they're gonna deplete the money it really just keeps coming. -- -- -- Incomprehensible amount of money even for the market I think as far as this dividend do you think there's something the company wanted to do already sitting -- so much cash they really had no choice. Asked the counts -- has grown and -- come out with successful product after successful product also of course the iTunes store. There really has been growing pressure from big shareholders to do something. Apple and Google are the only two tech companies -- market values over a hundred billion dollars. That don't have a dividend so you know whereas it used to be tech companies didn't pay the dividend has really changed in the past few years so. Again it wasn't historically with the company is done but it has so much money. And then increasingly it did have this pressure from shareholders and Tim Cook really. Since he became CEO several months ago a lot of the focus has been is he more open to doing something like apps. The purpose of the buyback part of this. So what company just sat on the conference call is they're looking to protect employees. From shares being -- -- look we know the stock has been on fire it's up 45%. This year alone. We know it's become the biggest company by market value in the world. We'll keep in mind as companies put out more shares for example if it is that they're going to be rewarding employees that way. They want to maintain the value of each of -- shares -- this is one way that you can do it but again also. They have an awful lot of money that's sitting there and I do want to point out as well. The company in the press release talks about. Even though it's paying out all this money it still has plenty to continue to do for example the store expansion that it's doing a lot of that is focused overseas. To do you any kind of strategic deal. It wants for example so there's up any money to keep investing in the business as well what -- apple watchers saying about whether Steve Jobs would have done answer whether he would've approved. -- you know again it's it's not something he did and certainly there is plenty of cash on the bad policy -- -- him being CEO. And it really did the conversation really did start to change -- -- cut came in but. Here we can't forget Tim Cook was really Steve Jobs chosen successor. So you know they clearly saw eye to eye on -- not that Steve Jobs really. Wanted this -- -- didn't want to carry the company Howard ticket point all right let's switch gears to the attic news the FBS moved up the past five weeks in Iraq now. Treasury yields are near their highest level since October what is behind these trends on. They really were -- the fact that the economy continues to grow that there had been a concern. About whether we'd be able to assist -- this recovery that's under way here in the US given that back that gas prices for example are moving higher. But so far the reports seem to indicate that in fact we are keeping on track. But we also want to point out -- in that we've talked a lot of -- in recent weeks is valuation -- even those stocks are moving up. We want to remember companies have been making war. Com. But stock prices are not going up so quickly that stocks are getting expensive in -- by historic standards they're not expensive and you could say that -- undervalued in some way so. You have investors being bullish on the economy. But some might not some might say not overly so and it's my next question which is that market volatility has been down what is the reason for that. -- in -- what we found here Bloomberg colleagues of mine on the stocks team here. Is that daily price changes are down the most in eight decades and we are seeing the smallest -- that we've seen since 1995. And it and really seems to indicate. The incredible fear factor is not there you know you think back to the financial crisis that -- wild swings that we would house. That we had also kind of in the -- of the debt crisis in Europe in the past year. And a lot of that you're really seems to not be in the market right now. Another recent trend is that trading volume has been going down and something -- seems to show -- some investors are just sitting on the sidelines either their contents where they are now. Or they're waiting to see what happens but they're not in an out of the market all the time. -- right -- about OPEC OPEC nations have been plowing cash actually to US treasuries -- now. Not in -- down more than. 50% faster rate meaning the OPEC nations. Than all other foreign investors in US treasuries. It's the oil story -- is priced in dollars. And therefore we know because oil prices have been surging the OPEC nations the oil producers have a lot more cast -- a lot more dollars on their hounds will what do they do -- those dollars. You know. Often as we know the US is seen as as the safe play as -- attractive flakes. And right now it's not so much as safety play but -- that they've got these dollars they have to put somewhere and this number I found staggering. -- -- up 26 dollars a barrel since the end of September and what that means. Is 780. Million dollars more in profit every day so again. You know -- -- -- problem. We'll get that they -- a cast probably easier for me here cache and problem. In the same sentence let's move on. UPS announcing a plan this morning to buy one of its rivals what are you hearing about that deal. TNT express is the name of the company it's a European. Shipping company it's a challenge to Deutsche opposed were all more familiar would be. Company that -- to post operates which is DHL. As the package delivery company six point eight billion dollars is what they are gonna pay it's an increase of the -- that they had. Expressed earlier on -- opposed of course is now saying. We have regulators are going to be taking a really close look. UPS says we think regulators are going to approve the deal -- but no matter what we say about it -- or what regulators say clearly. It's a play on an expansion in Europe at the economy may be slow there but certainly it's a big economy no matter -- Sure -- another company making a -- Starbucks. They Begin a new venture today opening its first juice store and Bellevue Washington -- these -- gonna be as ubiquitous as the company's coffee houses. You know so we're talking an evolution -- -- they bought the company several months of back. And the company didn't have -- evolution Preston had packaged uses fresh package she says. And so this is the first store. And it is part of a -- to go nationwide with -- Starbucks has been expanding its grocery business. It's been doing things that store to try to bring in people off peak hours meaning extending foods -- to get people and during lunch time for example it's been experimenting with alcohol -- people in in the evenings as well. We don't have a or locations where plans to expand outside of Washington but definitely again this is just the first store -- It's gonna they say be could be a big business and it's interesting hearing -- Stephanie unite here who -- in New York City. These fresh -- places are popping up all over the place and -- just -- I was walking over the camera to talk to you guys. Saw a headline that cross that John but you says it's going to be hiring 2500 summer workers on so clearly the -- craze seems to currently be a place. One other just point here is it's not cheap you know we took a look at say you -- a large juicy bites down much at evolution -- talk about like fifteen boxer. So it's not -- -- -- that's some fresh yeah it's I guess. Have a good -- that you haven't -- like -- so good but it's -- of the basics 67 -- -- and day out well you know fresh -- is expensive. Anything answer question today -- you know -- we're watching here with. Going on the with the markets because it's a story we're talking about about volatility really not being -- so much so we're pretty flat right now. But we want to remember the S&P -- been up the past five weeks right now. The S and he's -- the Dow is currently down two tenths of a percent RIL and bright and busy morning for you thanks so much for joining us thanks Stephanie.

This transcript has been automatically generated and may not be 100% accurate.

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