[AndrewKemendo]

The St. Louis FED did a story on this last year [1] that basically said there are two main reasons why you would stockpile cash if you're a regular company (non-finance, non-utility): precautionary motive and repatriation taxes.

With respect to the first it comes down to uncertainty and credit constraints. Since the credit issue is basically zero for thees companies then it likely comes down to uncertainty in the market.

They want to be shielded in the case of a huge crippling depression or global catastrophe. Apple's "burn rate" is about 33BN a year, which means that 250BN would give them ~5-6 years to find a new market in the event of a nuclear holocaust if they kept spending the same with ZERO income.

At the same time, just like Venture Investors, they are all waiting for the next transistor level market shift to happen - whether they can make it or otherwise. So they are plinking away with small investments on projects that are high risk to try and flush them out.

Pick your poison:

Nuclear

Biotech/Genetics

Artificial Intelligence

Augmented Reality

Space Mining

Etc...

It's really about making sure that APPL will be around in the year 2200 irrespective of everything else.

[1]https://www.stlouisfed.org/publications/regional-economist/j...

[valuearb]

No, it's all the massive taxes on repatriated profits. Apple doesn't even have $250B because it borrowed $78B to pay out as dividends.

When the 12% tax holiday is approved, almost all of that money comes back and most gets paid as dividends. You don't need it overseas for safety, and you don't need to burn $30B a year if your revenues disappear. A "skeleton crew" can spend a couple billion a year developing new profits in the nuclear meltdown scenario.

[AndrewKemendo]

You don't need it overseas for safety, you just keep more of it for safety.

[valuearb]

You don't need $250B for "safety". Apple needs maybe $50B tops. If it has a bad year it's going to slash spending. It's got professional management that know pretty much how much it will make in a quarter and how much it can spend. It also has access to further financing, both debt and equity.

Repatriate the $250M, payoff the $78M in debt, and pay out at least $100M to shareholders. Apple will have over $100M in cash again by the end of the year.

[easilyBored]

Apple's "burn rate" is about 33BN a year, which means that 250BN would give them ~5-6 years to find a new market in the event of a nuclear holocaust if they kept spending the same with ZERO income.

In your case, that burn rate would go down to $5 billion in a year or two. Apple justifies the burn rate because it's making a killing, when that stops...

Lower the corp tax and they'll repatriate the day after.