Apple buys their own shares back because they believe they’re undervalued, fundamentally. So it's a bargain. There's also only so many profitable R&D projects they can invest in, and the rest of the money can be better allocated by the market. This is all finance 101 that Tim Cook is familiar with.
Stock buybacks are a stupid idea for airlines (high fixed costs, heavily economy-dependent cash flow), but a fantastic idea for Apple.
That’s not quite right - they don’t have to believe that they’re undervalued rather that they are at least fairly valued.
Share buybacks aren’t a stupid idea for Airlines either. If they have too much cash on the balance sheet better to return cash to shareholders as a one off in a tax efficient way rather than pay a regular dividend that they have to cut when the economy turns down.
> Share buybacks aren’t a stupid idea for Airlines either. If they have too much cash on the balance sheet better to return cash to shareholders as a one off in a tax efficient way rather than pay a regular dividend that they have to cut when the economy turns down.
That's what they thought, and what they did, and then they needed a bailout. Companies that don't save for a rainy day deserve to be wiped out.
Stock buybacks are a stupid idea for airlines (high fixed costs, heavily economy-dependent cash flow), but a fantastic idea for Apple.