You can now buy stocks not only for their growth prospects, but also for the income they will generate. Unsurprisingly, investors liked the sound of it and sent the stock up 15% on the day of the announcement, pushing the company’s value to an all-time high and more than recouping all the losses it had incurred in the wake of the pandemic. It’s a transition to headsets.
Still, the company will arguably be the first tech giant to start returning cash to owners. He thought that Apple would stop making all payments under Steve Jobs and instead use them for new equipment, so they made payments under Steve Jobs and after his death they paid the lowest amount possible. We are only making payments.
At some point we’ll have to increase it. Amazon announced big profits last week, and moves like advertising on Prime should boost its revenue even further, so it’s only a matter of time before it starts paying out payments.
Google’s owner Alphabet may not be able to resist paying something out of its $113 billion cash pile. Netflix has made significant profits from a surge in revenue from the crackdown on password sharing, and could be forced to return some of it.
Nvidia would have plenty of room to increase the measly 0.3% it currently pays shareholders, but if Tesla can afford to pay Elon Musk $50 billion, it could overturn a court ruling on that decision. Assuming you can, you can certainly afford to make some payments. Shareholders too?
Big tech companies will begin to compete with oil, pharmaceutical, and banking conglomerates in their ability to provide huge sums of money to shareholders every quarter. Given its size, semi-monopoly position, and growth rate, it will likely be overtaken soon.