Is Apple Broke? Seeks Loan from Investors For Payouts to Shareholders

3 Min Read
Apple Logo

Computer giant “Apple” is asking investors for $17bn (£10.9bn) to help fund extra payouts to shareholders in the biggest ever bond issue by a non-banking company.

Bond issues – essentially interest-paying IOUs – have been far larger, but only from governments or banks.

Despite the size of the loan being sought, Apple is unlikely to have problems finding investors willing to advance the money.

The bonds are being sold in New York.

By midday New York time, Reuters were reporting the company had received orders for $50bn, about three times the amount being offered.


The money will be used to fund special payments to shareholders who, after years of seeing their shares rise in value, have become frustrated in recent months.

Apple shares had lost 45% since last September, as rivals such as Samsung have eaten into the smartphone market it used to dominate and its iPad has faced similar challenges.

Shares rebounded over the past week or so as the company made moves to pass some of its giant cash pile back to investors.

Although this month Apple reported its first quarterly drop in profits in a decade, it said it would raise dividends for shareholders.

It made a net profit of $9.5bn in the January to March quarter, down from $11.6bn last year.

But the results were better than many had expected, as strong iPhone and iPad sales boosted revenues to $43.6bn.

This is an unusual exercise as Apple is borrowing lots of money when – rare for a technology company – it has $145bn in cash sitting in the bank.

Most of that money, though, is sitting in accounts outside the United States and will be liable for US taxes once it is repatriated.

That makes it cheaper for Apple to raise the money through a bond issue – its first – even though that will attract interest payments.

The company has also said it plans to buy back $60bn in shares, and raise its dividend to shareholders by 15%.

Share this Article
Leave a comment

Leave a Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.