You’ve probably heard about Apple’s blowout earnings on Tuesday. The company beat expectations on every point, from revenue earned, EPS, to the number of iPads and iPhones sold.
Record sales are nothing unusual for Apple, but what we were most surprised to learn is that Apple (AAPL) now has $97 billion in cash, short term, and long-term securities. That’s insane.
“We are not going to let the money burn a hole in our pocket,” said Apple CFO Peter Oppenheimer. “What we focus on is making the best product. We just want to stay ahead.”
But what does a company actually do with $97 BILLION in cash?
To understand the power of $97 billion we want to demonstrate that theoretically Apple could acquire some of the following companies in CASH (not accounting for a premium).
Can you imagine Apple as a Wall Street institution? Why not! Citigroup (C) would appear a bargain at a market cap of $87.42 billion, or Bank of America at (BAC) at $73.97 billion. I’m sure Warren Buffett would appreciate that. Or how about paying with an Apple credit card? Visa (V) looks pretty tempting at the “low” price of $82.2 billion.
Construction? The world’s biggest construction company is Caterpillar (CAT), valued at a paltry $68.7B. It would be helpful in building its empire. Home Depot (HD) is valued at $69.31 billion. Think of all the how-to apps!
Apple could even conquer the clouds… “Thank you for flying Apple Air!” Think about it, Apple airplanes… It could easily acquire Boeing (BA), valued at $56.01B. It would only make a dent in their cash reserves.
Oil? Sure thing, ConocoPhillips (COP) is only $93.75B. There’d be change to spare. Or, if Apple feels ConocoPhillips doesn’t have its desired X-factor, they can always take a look at EniSpa (E), $89.88 billion,
What about Walt Disney (DIS) – only $70.51B. And think, Disney owns content, Apple needs content for Apple TVs… Just saying.
Coffee anyone? Starbucks (SBUX) is valued at $33.44 billion, Apple could buy it almost three times over. Or what if Apple decides to go into soft drinks? No problem, for a little more, Pepsi Co. (PEP) is valued at $103.5 billion.
What about taking over the American auto industry? It could buy out both Ford (F) and General Motors (GM) in one go, valued at $48.72B and 38.79B respectively.
It could even buy these big name companies twice: Nike Inc. (NKE) $46.91, Colgate-Palmolive (CL) $42.7B, Eli Lilly & Co (LLY) $45.86B, Monsanto (MON) $42.89B and Dell (DELL) $30.2B.
Speaking of Dell, a competitor, Apple could also buy out Amazon (AMZN), valued at $85.04B. That would certainly squander any more talk of competition from the Kindle tablets.
In a true stoke of patriotism, Apple could even pay off 0.6% of the United States national debt.
When it comes down to it, of the 9,795 companies trading on the US stock exchanges, only 49 are worth more than $97 billion. That leaves 6,746 companies essentially “for sale” to Apple in cash.
Yes, Apple is that rich.
Interactive Chart: Use the Compar-O-Matic to compare analyst ratings for AAPL and its competitors:
Use the Turbo Chart to Compare the Performance of AAPL to the S&P 500:
*Written by Rebecca Lipman.
Great article. Apple is scary rich.