The Logistics Of Storing $191,827,532,134 In Cash
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- Опубліковано 21 лип 2024
- Have Companies & The US Government Pay You!
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Apple is the most valuable company in the world boasting a market cap of over $2 trillion. Considering this, it's not surprising that Apple has a massive amount of cash which clocks in at nearly $200 billion. But, how does Apple manage to safely move around and store such a large amount of cash. Well, Apple like most other large companies relies on a couple of investment vehicles to manage their cash which includes corporate bank accounts, government bonds, corporate bonds, and other marketable securities. This video explains how Apple moves their cash around the world and where exactly they store their money for safekeeping.
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Timestamps:
0:00 - Apple’s Cash Pile
0:43 - Apple & Ireland
3:55 - Bringing Back Money
6:37 - Storing Billions Safely
8:06 - Marketable Securities
9:54 - Apple’s Financial State
Thumbnail Credit:
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Resources:
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Disclaimer:
This video is not a solicitation or personal financial advice. All investing involves risk. Please do your own research.
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Apple doesn't "store" their cash in Apple stock when they do stock buybacks. The shares are retired and the money is transferred to the investors selling their shares back to Apple. Apple can't access that cash anymore, it's gone.
They can always dilute the stock in the future and technically get back the cash.
@@simonk.2969 Apple could not get back all $700 billion they've spent on buybacks, their stock would go to near zero and they'd run out of buyers. Selling new shares increases share count, thus diluting the earnings per share (and thus shareholder ownership of future earnings). That would send the stock price tumbling. Other people would sell their tumbling shares and create too much supply and not enough demand, creating a vicious cycle. As a side note, Apple does use buybacks to help hide option grants to employees, where the company issues new shares to entice employees to stick around and perform. They do dilute their stock, as you say, but it is hidden by the buyback program.
@@SpaceTravel1776 For sure they can't get it all back at once, but I think they could get it back one bit at a time.
@@MatheusSilva-qm1ft No they couldn't, the board of directors and investors would remove the leadership who attempted to do so. Selling $700 billion in new stock, even spread out over years, would destroy the value of the company from a shareholder perspective, no one would want it to happen. It is not a private company, its executives couldn't do something so obviously insane and bad for the company over a long period of time without being removed.
@@SpaceTravel1776 what a nerd
Poor Research: I was pretty impressed with the video until he mentioned that Apple is still doing the tax evasion in the US on an island off the coast of New Jersey... I'm like that's weird but I'll believe it. He shows a screenshot of an article so I Google the title. Apparently it talks about the island of Jersey in Europe.. The dude didn't even read the article he showed in the video. If that's not lazy research than idk what is. Additionally resources link does not work in description.
I'm sure there is a lot of good information here but given the level of thoroughness he read that article he literally cited in the video I would not generally trust this channel.
I completely agree. At 1:28 he said "Despite this, lawmakers can't do anything about it [because] this process, although sketchy, is technically legal." That's absolutely and factually wrong. Lawmakers have the power conferred upon them by democratic elections and the Constitution to enact and pass laws to make "this process" ILLEGAL. Therefore they CAN do something about it, but rather, the issue is whether they have the political capacity and willingness to do so.
To be fair he is probably referring to prosecutors instead of lawmakers. But the word lawmakers essentially says the person who makes the law. So I don't get how one can mix these things up.
At this point I would take everything this person says with a huge grain of salt.
@@StormyMusic9 He doesnt explain why lawmakers havent done anything about it and you dont seem to understand it either. Corporate income taxes are in theory supposed to be a tax on profits. You get revenue and deduct your costs and what you have at the end is taxed (assuming you have any). So Apple US have revenue but if they pay royalties to this other company they own that is in another country with low/no corporate income taxes then its considered a cost for Apple US that can be deducted to avoid taxes.
Reason lawmakers dont do anything about this? well there could be corruption but its also the fact that you cant differentiate between this and a legitimate transaction. Countries like Ireland for instance massively benefits from the current system. So to conclude, corporate income taxes are probably just outright flawed.
@@correctionguy7632 It is possible to differentiate. What do you think tax lawyers do for a living? Heard of the arm's length principle and transfer pricing rules?
@@correctionguy7632 Anyways you are missing the point. My point is not that he failed to explain why lawmakers haven't done anything about it. If that was the case it may have just been oversight on his part.
My main point of criticism is that he made a factually wrong claim. He claimed that "lawmakers CAN'T do anything about it", which means "is physically unable to do something".
If he wanted to be factually correct, he could have simply said "[some] lawmakers REFUSE to do [because of political backlash etc etc]".
And your point about the royalties loophole is actually not that hard to fix or that hard to distinguish from legitimate transactions. Some cases are obvious. Other cases are borderline and result in intense litigation. Perhaps take a look at some international tax regulations and see how other jurisdictions close this loophole, what is the role of auditors and fair valuation of intellectual property. There are numerous cases authorities brought by tax authorities for breaches of this principle.
@@StormyMusic9 the video was trash, had to quit less than halfway through. Ok so if its possible to differentiate do explain. How do you differentiate between a legitimate business expense and funelling money to another country with no/low corporate income taxes?
Now they're rich on paper and in paper, nice
Yes sir!
idk think just paper... apple definetely selling stock and goods
@@philipphilip5472 Big companies use most of their money into inflating the price of their own stocks and making their investors rich. Its all a Ponzi scheme.
When you invest, you're buying a day you don't have to work
@Hart Thim You're right Sir, it's obvious a lot of people remain poor due to ignorance, it's better to take risks and make sacrifices than to remain poor
@@christianajoe8563 It's not ignorance but due to some unprofessional broker in the market
Bitcoin is the most profitable investment online of only you trade with the help of a professional expert
I recently got into forex trading and im already marveling over the profits I'm making, I'm like " how the hell have i been sleeping on this
@@oliviagreg5298 Same here, I wish I knew about this Bitcoin trading earlier, brace up and get yourself some Bitcoin before it's too late
Before anyone goes on about "evil corporations", the USA is one of the few countries on the planet that requires a cut of earnings from companies even if they produce products outside the USA and sell them outside the USA. So the USA is literally requiring payment based simply on where the company has declared its headquarters to be. This produces a lot of incentive to do things like create companies outside the USA in name only, and also keeps cash from flowing back into the USA, where it would help our economy.
Canada does that to. it is double taxation. welcome to tha lands of taxes.
Very insightful and detailed video. Very difficult to find a video on this topic which gives a complete picture of how Apple is managing its cash. That is dividing its cash into
1) Check-in account
2) Government bonds
3) Corporate bonds
4) Buy back shares
Can Share buyback be a reason for the ever increasing share price of Apple even though they are not innovating much anymore ( except the M1 chip but that too they came with it very recently ) ?
Also like earlier Apple has stopped releasing data of their Iphone sales
Wouldn't be surprised If the government printed a special 1mill bill just for them. And they just keep these in a locked cabinet somewhere In some random office.
They would be worthless if they're secret
Next:
The reason why Windows 7’s market share is lowering day by day
cause its been discontinued?
For the same reason why Windows XP's market share dropped: IT'S OLD
@@mihailmojsoski4202 how did all you miss his joke?
I miss the simple UI of windows 7. Windows 10 is too complex.
@@angelgjr1999 it’s the same thing lol
Welcome to the comment section we have blankets, warm milk, and cookies!
@@kylewilliams4691 ok😉
You are soo beautiful. ❤️❤️❤️
And Great hospitality good sir.
😂😂😂😂
Ooh thanks for making it cozy
Error @6:18 It's the island of Jersey 🇯🇪 in the UK not New Jersey the state in the USA.
Oh ok, my bad. Thanks for the correction!
Noticed that too and was confused, nonetheless, it's a great video!
If I had a massive company.....I would do the same.
If is the story of your life
How the hell do you only have 50k subs this is HAI quality videos!
Logically answered is one of the most logical youtubers which give sensible reason behind everything
Thank you Vedant!
It’s in the name!
Makes sense
Is it weird that I was wondering this just now?
New Jersey is named after Jersey one of the British Isles. It is a small one like the Hebrides, Isle of Man, and Guernsey. It where the new HQ is. Again, for clarification for other Americans "Jersey" isn't just shorthand for New Jersey. Old Jersey is just the Isle of Jersey.
Thank you for the correction!
Fantastic video. Great analysis. Thanks!
Excellent! As a Apple stock holder and card member this gave me even more trust in them!
What? I was just about to ask if you could make a discord but then i heard your outro lol
Share repurchases are actually not categorized under marketable securities.
5:58 WTF is that graphic 😂 clearly misrepresents the real difference between 35% and 21%
Bruh see the scale again it's starting from 20. Have you studied statistics. Some graphs starts at above point zero.
@@masterdementer I think he knows, and that's the point - by starting the X axis at 20% it makes the difference between the 35% and 21% tax rates much larger than it is. In this case, it looks as if 35% tax rate was several times larger than the 21%, when in fact it's about a 40% drop.
@@jubbujzulu sure. But it is a big tax cut nonetheless. No one can argue that
@@rookiesuy9254 Of course. All I was saying is that the graph is potentially misleading
@@masterdementer You’re right but it would have been more representative if it started at 0. The bars aren’t the correct size. The way the graph in this video is set up, it looks as if 20 is 1/6 of 35 when it should appear to be about half the length.
Came late to the party... now that's a good question, and this video has a great solution to it
and what will happen to these company cash reserves if the us goes to virtual currency?
Anyone else get an apple ad while watching this?
Excellent Video!
@logically Answered
Is your logo/icon from the V from volunteerism? :D
Really like your videos!
I LOVE THE TOPICS THAT YOU COVER ON THIS CHANNEL keep it up bro👌🏾👍🏾
Thanks man!
@@LogicallyAnswered SAME
Man your channel will just EXPLODE in coming years!! Good job!
Thank you Habib!
The island of Jersey, near England, is where they were (possibly still) storing their cash. Not “an island near New Jersey”. This island has been a tax haven for decades.
How do they invest those moneys?
You should probably update your youtube "about" page. It's kinda outdated.
Anyways keep up the good content!
I should!
Maybe also intonation? I was somehow get confused when just hearing
6:18 Fact check: Jersey - a UK territory. Not New Jersey.
Ikr I was wondering what he was on about
dude just got straight up exposed
Too funny
Apple’s money does not go to Ireland. It is more likely held in a bank account in a New York bank owned by an Irish company, say Apple Ireland Inc. apple’s Irish subsidiary is free to have a bank account anywhere in the world.
The topics you cover are really interesting, loving the channel since the Gus frung video
Thank you sir!
Nice pic
I learnt so much from this
Great video! Just wanted to let you know that the island of Jersey is off the coast of the United Kingdom, not New Jersey, which is in the United States.
Hehe old Jersey
You mean the EU´s epstein´s island? xd.
@@fallencrow6718 no he had a island in the caribbean
@@hannesproductions4302 I think you might be unawere(no surprise, teh press pretends it never happend) of the investigation surrounding sexual abuse in the orphanage of the island(funny how big it is for such a small population) and the bodys found there.
@@fallencrow6718 they didn’t find any body’s they found what was believed at the time too be a child’s skull buried in the garden but after tests they found a protein not found in human bones but more commonly found in coconut shells and that’s what it’s believed to be now
Island near New Jersey 💀💀
Yess a new video ❤️
Thanks for watching Fahim!
Already up to 40,000 keep going.
As somebody from Jersey, I am pretty sure my country/island is not located off the coast of New Jersey
Nice vid 👍
Thank you sir!
awesome content
Thank you Manpreet!
Me: the mastermind behind storing 0,85 $ in a single bank account!
Logically Answered, Nice job, you make amazing videos 👍
Thank you so much Vedant!
Where they store ?
150k subs by end of the year, calling it right now. I’ll be happy to say I was here before 10,000 when it eventually hits 1,000,000 subs
That would be awesome bro! Let's see if we can get there!
Same I was here when he was at around 8k subs. I bet he’ll reach 250-500K as the hard part is getting to 10K.
You called it
The island of Jersey is not in the USA. It is off the coast of the UK.
I love the videos man! Keep it up!
Thank you!
The great work
I think apple large stash is exactly what rich dad poor dad showed us that having your money in assets over liabilities.
It's not shenanigans to go where you are treated best. The problem is that people think that taxes are good, raise them, and then complain when a different country that does things better (lowers taxes).
Taxes are not for the people, not for the economy. It's the politicians spending your money and getting more and more power instead of you.
Yeah, roads, hospitals, security, firefighter and all other public services are just here out of the blue (the healtcare system of the united states does not apply as public service). Are Taxes used efficient? i dont think so, but your statement seemt to me just a little onesided...
@@stanihutter let me explain.
The State is a service company, is NOT the people, it's a service company it gives you some services. The problem is that it's a forced monopoly system, so you can't choose not to pay for them, and you can't choose a different company. Whatever they give you, you have to pay or you go go jail.
Any service that people ask to be run by the state, is people asking for it to be run by a single company that forces you to pay, instead of by multiple companies with voluntary pay. It's just plain stupid.
So, what's the incentive of politicians? They get more money if they charge more taxes, they get more power if they put more regulations and laws. NOT if they do a good service.
It's the exact opposite than you. The less taxes, the more money you get to keep, the less regulations and laws, the more freedom you have.
USA used to run with 5% GDP of gov spending. Now they are at 48% and growing, with high inflation. That extra 43% of GDP is what citizens are tricked to give away "for their own good". Imagine that money in the hands of the people... but the people are stupid and think the State is them, so ask for more taxes and regulations. Easily tricked.
So yes, as things are ser up, the State is the enemy of the people. All those services can be solved by multiple companies that people choose voluntarily.
Politicians are your enemies, except for the ones that want to lower your taxes and remove regulations. Those are the ones on the side of the people. 99.9% of them are against you, they live off you, they get to put more laws if there's caos, not if we get along.
The State is currently by far mankind's worst enemy. Ask Ukraine and Russia or Europe during the world wars. A monopolistic company with an army and nukes. ALL wars are created by politicians with too much power.
The more we limit their power, the better of society is, no doubt about it.
@@santiagopuentep Hey you have an interesting view on this. How would the health care system or emergency services work on this system of lower taxes because those make up I’d say 50 percent of the budget. I can see transport and construction for roads and plumbing working but at the end of the day I think it would turn into bidding on projects and either it would be a crappy job or the workers would be paid less.
@@brandonchartrand1102 Argentina's health care system used to be the best of the world when it was a complete free market (now it's crap, due to socialism).
What do you think is better, to have thousands of clinics, treatments and doctors fighting to give you the best possible care, or a single entity ruled by politicians (people that live off your work) and paid by force (taxes), with no consequence if they do a bad job?
Of course the free market is INFINITELY better.
You know why big pharma exists? Because the american FDA only allows treatmens that are approved by politicians, after spending billions of dollars in bribes and certifications, to go to market. The regular person CAN'T get in. They are big companies protected from competition by the police.
The USA's health care system is crap and EXTREMELY expensive due to it NOT being a free market. It's socialism, but people say it's due to capitalism (which is not), so they ask for more regulation, so they make big pharma bigger.
Free market capitalism is the solution, because it's moral, it allows free competition, and forces everyone to find solutions for you, so that you VOLUNTARILY give them your money.
Socialism is politicians putting a gun on your head and forcing you do things their way.
It's as simple as that, but very few people understand it.
What do you thing is more moral and what do you thing works best?
The State administrators (what people wrongly call "government") should never tell us what to do with our bodies. They are our employees, not our masters.
@@santiagopuentep This is an extremely well thought out take on taxes/gov't regulation. What should be done about social security, unemployment and other benefits? Do you believe that taxes should be abolished all together or just curtailed? About 1/4 of every dollar that you pay in taxes goes to maintaining the US military; do you believe we should still maintain a strong military and if so, how will it be funded with reduced/no taxes?
Subscribed before I even watched, knew this channel would be right up my alley
I love jersey Channel Islands taxes 👌 good choice
The next gta heist should be you robbing a tech company
This youtube Chanel is great why does it have so few subscrabers
Thank you Gralf!
Great job. Happy holder of apple 🍎 share
Why is the music the type of music found in a Harry Potter lore video?
lol 6:15 Jersey is not near New Jersey
Double Irish Dutch Sandwich was closed in 2015 by the Irish finance minister in Ireland's 2015 budget
I feel bad watching these high quality vids for free lol
You're watching the ads man! That's more than enough support!
@@LogicallyAnswered I have SponsorBlock on Firefox dude. Sorry.
@@harambetidepod1451 lmao
Abit late.
But Better late then never.
In anyway it is a good video as usual
And the topics is interesting as usual
Keep it up.
Thank you Mang! I really appreciate you watching and commenting as always!
The way he talks just kills me
Yo keep it up
here's the thing, apple operational expenses in 2020 are 208 Billion
if they are taking a bad decision, and suffer a heavy loss
they could survive using that cash for at least 1 full year before going bankrupt
if they didn't hold onto that cash? how do they survive?
it's not greed, that cash is necessary for survival
It would be hard to steal all of it at once
they have it lying around on a random bank account
07:33 and 08:26 theyre getting bigger because the cash is invested in national (the safest investment for me) and coporate bonds means theyre cash is not only sitting its keep growing year by year
@@Wasnt-1even if it was sitting in bank accounts the interest alone is more than most people earn in their entire lifetimes.
The content is really interesting however the narration is not borderline boring.
The logistics for holding that amount of money is hard but they need to keep it somewhere.
Yep, it’s quite interesting how they accomplish it!
@@LogicallyAnsweredyow you mentioned warren buffett hating on corporate bonds
when he pays berkshire bonds by selling bonds too 😅
The US' government bonds have an annual return rate of 1% over the span of 10years??? In Mexico we have the equivalent to bonds with a rate of 4% annualy. Even bonds with daily liquidity have that same return rate.
I wonder what causes such a huge difference between here and the US.
The US government is practically guaranteed to pay back the money. The US treasury is more trustworthy than your own mother. That is why they can offer such low interest and still have willing buyers. Same idea as Jeff Bezos getting a small loan. No one is afraid he cannot afford to pay it back. So interest rate for Jeff Bezos is super low.
Inflation
US bonds are safest security and investors trust it way more than mexico so lower cost of borrowing
They should be worried about the govt trying to get their hands on it
💯💯💯
Do companies need such a large reserve, where my dividends at
The EU was mad that they didn't get a slice of the Apple pie like Ireland*, so they decided to tyrannically brute force their way in and try to claim some of it for themselves. No wonder the UK left.
*Obviously I realize that Ireland is part of the EU.
And it's depreciating about 15% annually as per saylor
15% annually is insane. That would mean prices *double* every 5 years… have prices *doubled* in the last 5 years? Saylor has completely lost it lmao
I don’t know how is it possible that Apple buys apple stocks. If the investor has a apple stock they own a part of apple, but if apple owns apple stock, they in theory control even the Apple’s stocks of Apple
🤯
Please answer me logically cause I am so much confused
When apple first sold stocks in the company the people who bought them owned a small part of apple and apple the company owned less and now apple has more money they can afford too buy their own shares affecting the supply and demand for them increasing their price
@@HarryJourneaux that’s how General Motors failed, with buybacks. So you say there are 2 separate entities? Apple and Apple Company?
Imagine a man being a trillionaire what will he do to keep it safe? That's a large amount of cash bruh
Easy not get married :-)
Hahaha, I don’t think we’ll see someone have that much cash anytime soon! But we will likely see someone with that much stock in the imminent future!
@@LogicallyAnswered Vladimir Putin enters the chat😂.
I feel like Elon Musk will become the first trillionaire within the next 5-10 years but won’t have more than a few billion in cash
@@dimaisatree Hey... Money is money ¯\_(ツ)_/¯ but it's not what we feel or think it's like thinking just because the person is at last place during the race will come last but end up first... What can i say, life is unpredictable
Tim Cook, every thing is going digital. So should be everyone’s cash.
They don’t store any cash in their own stock lol. When they repurchase shares this stocks no longer exist, it makes the ownership of every single share owned by investors larger
I would like some of that
Funny that you think Ireland's gonna listen we may lose out on taxes from Apple Google Microsoft etc but the sheer amount of workers they have who result in income tax value added tax and all other taxes makes up for it
I really like this channel's content, but damn this guy's voice and accent is tough to listen to.
Wait . Law-Makers cant do anything about it because it's legal. Isnt it their job to make the law?
Do you really think it’s that easy to make a law lol. It took them 10 years after car boom to implement the safety belt law and that’s the most urgent law they need to make. Then how long do you think they would need to take to make a law about a tax loop they’re benefitting from. 50 years? Or maybe never?
Very interesting. I couldn’t imagine being responsible for so much money.
Cool, so that's how they do it- divide in conquer, in short.
God bless.
It's not about the money, it's about sending a message
240bn cash now
To solve the cash storing problem
Convert all cash on the balance sheet to bitcoin
'lawmakers can't do anything about it because it's legal while sketchy'
Imagine being this gullible, it's sketchy AND LEGAL because that's how they set it up lol
You should do a video about how the mass increase in production of the US dollar in 2020 and possibly leading to a collapse of the economy.
inflation coming soon
Wow. They paid a decent amount of 14% when the average person pays at least double that and yet earns 0.0001% of what Apple earns. Go figure.
yk whats crazy, some people have a networth above that
I like this companies
They should have it in hedge funds
Ireland closed that loop hole
It's pertinent to know that investment is essential to make more money. Right guys?
Speaking about investment, You're right that's why I had to start up investing in forex fews month ago and now I'm really benefiting from it, honestly speaking I earned huge profits more than what I was paid for as my wages in a month interval
Warren buffett once said, if you don't find a way to make money while you sleep, you will work until you die.
Majority of people don't invest due to the lack of trade discipline or because of ignorance. but for me, I think investing in forex or stocks marketing would be a wise idea.
@Maura Harty I'm happy to see y'all talking about Mrs Galia Benartzi I just got my ROI worth $13000 from my last investment with Mrs Galia
@@johnsonsteve8774 She's also my favorite broker out of the brokers that I trade with... She only charge %15 percent commission sometimes %10 percent commission
I love this fucking channel
Great video, however i was expecting that they would have a big vault at their head quarters, very disappointing
Talk about the near $1T Apple takes in subsidies.
If inflations come these companies got affect first
So then i used my profit from Apple, to buy more Apple!
-Literally Apple.
wtf, Imagine how much inflation eats away at it each year.
Can I borrow a couple thousand?