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Technology Stocks : Apple Inc.

AAPL 272.99

-0.3%

Dec 30 3:59 PM EST

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Moonray

From: Bill from Wisconsin	5/26/2016 7:57:40 AM
	2 Recommendations Read Replies (1) of 213177

The potential Time Warner deal is the perfect argument for the buyback and the financial engineering to get low interest overseas debt financing the buyback. It's a perfect argument for being more aggessive with the buyback. An all cash deal for a $60 B company is expensive. For AAPL and for the aquiree. Both in cash consumed. But also in the TAX IMPLICATIONS for the TARGET. An all cash deal is treated, for tax purposes, as a sale of stock. A taxable event. Short term or long term gains, but taxable nonetheless. The shareholder of the target not getting a say in when the sale happens. They either take the offer (a sale) or they sell their stock (a sale) An all stock deal is a TAX FREE EXCHANGE. The shareholders of the target can elect to fly with AAPL in a tax free exchange, or they can sell their stock. Their choice. AAPL stock is great currency for M&A Use the overseas cash, use overseas debt to bolster the stock price. Then use that stock to buy technology and content. This argument is rarely used to justify the buyback. IMO, it is one of the stronger arguments for having a buyback in the first place.

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