CUPERTINO, Calif (Reuters) - Apple Inc CEO Steve Jobs said his company has to “think big” and its $40 billion cash hoard offers flexibility, suggesting that he had no immediate plans to spend the money on a share buyback or dividend.
Faced with questions at the annual shareholders meeting over what Apple would do with its cash — which stands at about one-fifth of its market capitalization — Jobs said having the money at hand offers security for the company.
“When you take risks, it’s like jumping in the air. When they don’t work out, it’s nice to know the ground is always there,” the chief executive said.
Since Apple spends little on acquisitions, analysts and shareholders want the company to put the money to work through a cash dividend or share buyback.
But Jobs — who skipped last year’s annual meeting because he was on medical leave for a liver transplant — indicated he saw such a move as having little lasting impact on Apple’s share value.
The company he founded was now big enough that it had to “think big” to move the needle, Jobs said.
Jobs said Apple would pursue opportunities abroad, with plans to open 25 stores in China — the world’s largest telecoms market — over the next two years.
Shares of Apple were little changed in afternoon trading on the Nasdaq. CNBC reported a rumor earlier that Apple was considering a share split, but Jobs made no mention of that at the meeting on Thursday.
Apple spokesman Steve Dowling said Apple had made no announcement about a share split and declined further comment.
Shares of Apple have been hovering at the $200 level since last October and analysts said investors are looking for a fresh catalyst for a stock that has already more than doubled from year-ago levels.
Jobs offered few details on the iPad, which was unveiled amid much hoopla last month and is expected to hit stores at the end of March starting at $499. The 10-inch touchscreen tablet computer is trying to bridge the gap between smartphones and laptops, but consumer demand for a “third category” of devices remains unclear.
Most analysts expect the company to sell 2 million to 5 million of the devices in the first year.
There were no major issues on the voting agenda for the meeting. Shareholders voted to reelect all seven directors.
Google’s CEO Eric Schmidt stepped down from Apple’s board last summer and no one was nominated to replace him.
Reporting by Gabriel Madway and Alexei Oreskovic; Writing by Edwin Chan; Editing by Tiffany Wu, Phil Berlowitz