Yglesias argues that Apple should use their cash more aggressively. He contrasts it with Microsoft using its cash in ways that maybe haven’t benefited shareholders but have helped the broader world.
I checked and Microsoft currently has nearly $70B in cash. They’re as constrained in how they can spend it as Apple is their hoard. In particular, they can’t spend it in research and development without hurting their current quarter and year performance. It would appear to the market that their costs were too high and they weren’t delivering the commitments they’d made, and the stock price would suffer.
What can they do? Pay dividends, buy back shares, and M&A. The first two give the money to shareholders who can decide how to invest it. The last exposes them to the ‘wasted at some point’ investor expectation he mentions.
Another complexity is where the cash is—87% of Microsoft’s is overseas. Apple had ~$74B overseas in July according to Moody’s. Repatriating that money has a big tax impact. That would be another way to put it to work in some sense, I guess.
His point is valid—management could spend the money. They’d have to weather the market response. Their shareholders don’t have the same expectations that Amazon’s do….