$100 Billion Question: What Should Apple Do With Its Cash?

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Photo-Illustraion by TIME; Apple

When Apple reported its blowout financial results this week, it disclosed an amazing fact: The company is now sitting on $97.6 billion in cash. So what will the tech juggernaut do with all of that money? Company executives were tight-lipped on the post-earnings conference call, saying only that they were “actively” considering alternatives.

Given Apple’s track record, the most likely outcome — apart from doing nothing — is a stock buyback, in which the company would purchase its own shares. Investors would cheer such a move, which would boost the company’s stock price. Or the company could decide to issue cash dividend to shareholders, but that’s less likely. The company hasn’t issued a dividend since 1995.

By its own admission, Apple is somewhat hamstrung in its options for its mountain of money. During the conference call, Apple CFO Peter Oppenheimer said that the company is holding $64 billion outside the United States. That’s not unusual for a huge global company like Apple, which does so much business overseas. But it does mean that if the company were to bring that money back into the country, it would have to pay a 35% corporate tax rate, which it clearly is not inclined to do. Still, that leaves over $30 billion already in the U.S.

(More: Apple Reports Record Sales, Profit on Massive iPhone, iPad Sales)

One option that’s unlikely is a large-scale acquisition. Apple’s remarkable growth over the last decade has come from within, through relentless innovation and ground-breaking products developed in-house. It’s never shown an appetite to gobble up outside companies, and most analysts don’t believe the company will start now.

“Large-scale M&A [mergers and acquisitions] is out of the question,” Colin Gillis, an analyst with BGC Securities, told CFO Journal, adding that any large scale deal could be “destructive” to Apple, because it could alter the finely-tuned corporate culture that the late Steve Jobs spent so many years building.

Ironically, one of Apple’s largest acquisitions ever was its $400 million purchase of NeXT Software, the company that Jobs founded after he was exiled from Apple in 1985. That deal brought Jobs back into the fold in 1996, setting the stage for Apple’s renaissance. Two years ago, Apple bought Quattro wireless, a mobile advertising company, for $275 million. And late last year, Apple spent a reported $390 million to buy Anobit, an Israeli firm that makes microchips already in use in the iPhone, iPad and Macbook Air.  But beyond that, most of Apple’s acquisitions over the years have been smaller firms that could be easily absorbed into the mothership.

Ultimately, based on Apple’s track record, the company may decide to just sit on its cash hoard for now. But as it continues to generate cash, the company will face increasing pressure to put some of it to use. And it’s fun to speculate about what the company could do with all that money. The Huffington Post has put together a slideshow with some humorous possibilities. Among them? Based on Kennedy Space Center estimates, Apple could fund 216 missions to Mars.

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