Prof G Markets: Uber and Airbnb Earnings, Apple’s Debt

Apple Bonds

Apple's strategic use of bonds has been a game-changer in its financial management. Jason Stavers explains that Apple began issuing bonds in 2013 to avoid high U.S. corporate taxes on repatriated profits, using the borrowed funds for dividends and stock buybacks 1. This approach allowed Apple to leverage its strong credit rating to secure low-interest loans, making it one of the largest debtors in big tech, with over $120 billion in outstanding bonds 2.

Apple can borrow money at a lower cost than nearly anyone else, allowing it to profit by investing in other companies' bonds.

--- Jason Stavers

Despite changes in tax laws, Apple continues to issue bonds, capitalizing on its ability to borrow at rates lower than most companies 1.

   

Debt Management

Scott Galloway offers insights into personal debt management, emphasizing the importance of using debt wisely. He advises against borrowing for consumption, which can lead to financial stress, and instead suggests using debt to enhance earning potential, such as through education or investment in appreciating assets 3.

Debt can be a weapon, playing a critical role in corporate America and personal financial well-being.

--- Scott Galloway

Scott also highlights the psychological pitfalls of credit card debt, recommending paying with cash to better manage spending 4.