Worth noting that based on AAPL's latest 10-Q, the vast majority of their cash is invested in corporate bonds, which have a nominal annualized return of ~6%. I'm sure the financial value of any acquisition is pitted against this alternative.
In real business culture, there is an imputis (especially for tech companies) to "maKe money work." If their best investment is other companies' bonds, they should (again, in theory) just return cash to investors who can buy the bonds themselves.
More importantly, The ability to reinvest profitably is a sign of horizon, at least traditionally.
I stress "in theory," because theory is a long way from practice when it comes to modern tech giants. The theory is financial theory... how companies are financed. In theory, equity investment is a way of financing companies. Google and Facebook did not need to be financed by the time they became publicly traded. They never had debt. Software companies don't require capital investment to expand, like a theoretical "firm" does. In practice, public markets have no role in financing companies per se, they're only there to provide liquidity.
> If their best investment is other companies' bonds, they should (again, in theory) just return cash to investors who can buy the bonds themselves.
This is what they're effectively doing, in practice. AAPL has conducted ~$500B in share buybacks since the commencement of their buyback program in 2013. Their current cash and cash equivalents sits at ~$200B.
So, one could say that of the $700B AAPl could have returned to shareholders, it returned $500B (or most of it).
I'm not sure we should accept "returned to shareholders" at face value.
Nothing is really returned to shareholders. Shareholders own that money (as they own all Apple's assets) before the buyback. After the buyback, they no longer own the money... but share value has (in theory) not changed because it now represents a larger portion of this smaller asset.
In the case of a buyback, cash is literally returned to the shareholders who participate in the tender offer by selling their shares back to the company.
