This is a good article on what to do with a big cash hoard with Apple as the example par excellence. I am with Felix. I don’t like financial engineering. I have seen too many good companies hollowed out just to juice the stock (often with little effect) only to leave them with financial risk that comes back to bite a few years down the line (ala Private Equity). And I don’t like roll-ups. I have seen too many companies raid the cookie jar either to keep the growth for growth sake game going (at a much lower quality level), or for ego purposes or because they don’t know what else to do with the money (because they have no vision). The underlying thought or dislike is that we mouth epithets to shareholder value creation and returning capital to shareholders but the reality is that management controls the show. It is not too far from the truth that management does most things to benefit management. Being disciplined with cash is just as important for a company as it is for an individual. From an investor/shareholder perspective I am quite happy with a firm accumulating cash and maintaining a strong, clean balance sheet. If the cash stock is beyond what is reasonable (as is the case with Apple...ironically) then it can be returned in the form of a dividend (drip it out), rather than buybacks that sound good in theory but I never seem to see any real effect (other than juicing EPS for management stock options).
http://blogs.reuters.com/felix-salmon/2013/10/29/apple-should-be-like-bloomberg/
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