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Apple balance sheet engineering

To conclude an intense week, yesterday after the market close, Apple reported earnings. They beat on the top line but slightly missed some important marks through the bottom line. That in itself would be enough to sink the stock. But that didn’t matter, because Apple announced a $110Bn buyback, which is the biggest one ever by any company, in monetary terms. As you can see below, Apple is reducing the supply of stock at a very rapid pace, and the fact that a tech company cannot deploy capital in growth projects is worrysome, but effective short term when it comes to stock performance. Apple’s balance sheet is a fortress, so much so, that cash hurts growth if not deployed. Over the last 9 years, they have bought back $755Bn of stock. What’s that mean for future growth?


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