What Should Apple Do With Its $100 Billion of Cash?

Joel Anderson  |

With its most recent earnings report, Apple (AAPL) revealed that it was sitting on some $97.6 billion in cash reserves. That's not just a rainy day fund, that's a 6-month monsoon fund. So, with nearly $100 billion in cash burning a hole in the company's pocket and no immediate end in sight for record revenues as the iPad 3 is released this week, Apple appears to be on the verge of making a big decision.

As for what Apple will actually do with that money is up for speculation, everything from a dividend to breaking into new markets through acquisitions has been posited as possible. However, it may be much more fun to consider what Apple COULD do with that much liquidity. It's the age-old question: what do you do with $100 billion? Here's a quick list of prominent companies that Apple is currently sitting on enough cash to buy lock, stock, and barrel.

Visa (V)

Market Cap: $94.54 billion

If Apple decides to buy Visa, do you think that they could charge it?

Bank of America (BAC)

Market Cap: $85.54 billion

What better investment for a company with an enormous pile of cash than one of the world's largest banks? Of course, said company would then have spent all of its cash in the process of buying said bank, but it's still a thought.

Amazon.com (AMZN)

Market Cap: $82.03 billion

One way to ensure that the Amazon Kindle doesn't start to infringe on sales of the iPad would be to just buy Amazon.

Comcast (CMCSA)

Market Cap: $78.74 billion

Apple's already entering the television market with Apple TV, so why not go whole hog and just buy cable giant Comcast and its subsidiary NBC along with it? Should Apple want to reprise its classic 1984 commercial, it could hypothetically air it for free.

The Walt Disney Company (DIS)

Market Cap: $76.53 billion

Here's a chance to bring a whole new generation of people on board with Apple products. Buying Disney outright could allow Apple to market to the nation's toddlers through remakes of classic Disney films. The L-iPad King? Bambipod? Aladdiphone? The possibilities are endless.

Facebook (FB)

Market Cap: ?

With most valuations for Facebook pending IPO coming at around $75-100 billion, it seems possible that it will fall into Apple's price range.

And for just a little more...

Of course, Apple could just keep holding out for more cash and then make an even bigger acquisition. The company's cash reserves are just short of a few major companies that are in the $110 billion to $100 billion range. Anheuser-Busch (BUD) could be in range. How about an iBud? McDonald's (MCD) is also close. Apple could market the iMac! Wouldn't that be something?

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
GPIAW GP Investments Acquisition Corp. Warrants n/a n/a n/a n/a
AAPL Apple Inc. 221.19 -0.96 -0.43 22,885,397 Trade
V Visa Inc. 142.45 0.71 0.50 9,170,646 Trade
AMZN Amazon.com Inc. 1,831.73 11.77 0.65 5,295,177 Trade
DIS The Walt Disney Company 117.13 0.94 0.81 7,120,646 Trade
BAC Bank of America Corporation 28.90 0.37 1.30 79,068,716 Trade
MCD McDonald's Corporation 166.77 2.70 1.65 3,608,363 Trade
BUD Anheuser-Busch Inbev SA Sponsored ADR (Belgium) 83.71 -1.72 -2.01 1,926,151 Trade
CMCSA Comcast Corporation Class A Common Stock 36.40 0.40 1.11 20,386,566 Trade

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