Net-cash position

I read an article discussing AAPL’s earnings report tomorrow. The angle of the article was what kind of dividend increase/buyback news we would get, and this segued into the debt.

I never understood the concept of the net-cash neutral thing…if say AAPL were to suddenly report a huge increase in cash, would the company then start taking on debt? Would that make sense in this environment? An analyst made an argument that AAPL could use its strong cash-flow prowess to enter a net-debt position…why would shareholders, or Cook even, want that? Wouldn’t it be better to instead have a policy of doing immediate buybacks, in an aggressive sense, if cash becomes too high; essentially, to treat buybacks as debt that neutrals out cash? (Up to a point, of course; perhaps the company needs to establish a minimum level of cash to have on hand, say $40 billion, or whatever, just to name a number)

The analyst mentioned that AAPL might want to look for acquisitions, and sure, I see that (I might say the company should aggressively invest in the theatrical film business). But, I just don’t want to see more debt.

And I ask this: what if AAPL floated stock in the amount of debt currently owed and paid it off that way? The reason I say this is because AAPL is currently at $2.67 trillion market cap. I forget what the debt is, a little over $100 billion? How much realistically would that knock the stock down? Many say AAPl is overvalued…why then not get rid of debt, lower the share price, and then buy back shares later?

Of course, I acknowledge as always that debt is not a problem to AAPl, I’ve had discussions on this prior and have been more educated on debt. I just find it odd (don’t get me wrong, if you look at AAPl free cash over the last few years, one can see how debt could be paid off; however, one would have to sacrifice some of those repurchases; and given AAPL is trying to cut costs, the interest expense was close to $3 billion in 2022 according to the last annual report; why not cut some of those costs maybe)

Anyway, just some food for thought…a happy shareholder am I, and I look forward to the new data tomorrow…