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· Posted on
May 13, 2021

Apple is making it rain after a monster 3 months

Apple unveiled its results for the first quarter of 2021 and it's fair to say it made some serious bank y'all

What's the key learning?

  • Apple has decided to buy back some of its shares to reduce the number available on the open market
  • By reducing the amount of shares available, Apple can limit the likelihood of other shareholders buying and taking control of the company
  • By limiting the supply, the value of the shares are likely to go up

HOW DID APPLE DO SO WELL DURING A PANDEMIC?

Sales managed to stay strong for Apple, as people had nothing better to do than online shop - and shop they did!

Sales in China almost doubled. That'd be over $8B more in iPhone sales than expected in just 3 months!

Last quarter was so good for Apple that it announced a monstrous $115 billion share repurchase... aka a “share buyback”.

SO, WHAT IS THE KEY LEARNING HERE?

A share buyback is when a company buys its own shares in order to reduce the number of shares available to everyone else.

Companies buy back their own shares for a few reasons:

Reason 1: By reducing the number of shares available in the open market, companies can prevent other shareholders from buying so many shares that they take control of the company.

Reason 2: The company can increase the value of each share... juuust basic supply and demand at play here.

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