mocoNews - As Apple's Cash Pile Grows, Rumors of EA, Twitter Acquisitions Abound
Tuesday, May 5, 2009; 4:59 PM
Apple (NSDQ: AAPL) has nearly $29 billion of cash on hand, a hoard exceeded by only one tech company?Cisco Systems (NSDQ: CSCO), reports Reuters. With that kind of capital in the bank, it's no wonder that buy-out rumors are running rampant.
At this stage, the rumors seem highly unlikely. The most ridiculous, according to Kara Swisher of All Things D, is Apple buying Twitter. She believes it to be untrue because both Twitter co-founders, Evan Williams and Biz Stone, are in New York today to attend the 2009 "Time 100" dinner, as two of the magazine's top picks for most influential people. How could they be negotiating a deal from 3,000 miles away?, she reasons. The second rumor is coming from FastMoney's Guy Adami, who is claiming that there is "chatter" that Apple is eyeing an Electronic Arts (NSDQ: ERTS) takeover, reports MacRumors, which also quotes Kotaku, as calling the prediction "sketchy, at best."
But if not acquisitions, what will Mac and iPhone-maker spend money on? Reuters quotes analysts as saying it's not Apple's style to distribute any of the money via dividends or through a share buy-back. They'll contend that "being flush is never a bad thing, especially in an uncertain economy." It may remain a mystery for now, but Apple may be obligated to do something soon. Scotia Capital analyst Gus Papageorgiou told Reuters: "I think the pressure is definitely mounting?It's just too big a number?the cash belongs to the shareholders, the shareholders don't need Apple to invest the cash, they need Apple to generate the cash."