over 3 years ago • 2 mins
Apple was accused of being too dominant by the makers of online game Fortnite late last week, but that didn’t stop the tech giant from selling $5.5 billion worth of new bonds 🍎
The whole brouhaha started when Fortnite allowed its users to make in-app purchases directly from its parent company, Epic Games. That way, it’d avoid the higher costs of Apple and Google’s app stores, which take a 30% cut of revenues. But when the rule-break got the app booted off both platforms, Epic refused to take it lying down: it responded with a lawsuit accusing Apple of being anti-competitive ⚔️
Investors certainly don’t seem to mind: they were happy to snap up the fresh bonds Apple sold late last week. Demand for them was so high, in fact, that the interest rate the company will pay on bonds that are due to be repaid in 40 years is just 1.18 percentage points higher than the US government’s bonds 🇺🇸 – arguably the safest in the world.
Given that Apple already has $34 billion in cash and another $60 in cash-like “securities” on its books, you wouldn’t think it’d need to take on more debt. But a lot of that cash is currently abroad, and it’d be taxed significantly if brought back Stateside 🌎 So the company might be better off taking on debt in the US while it’s so cheap, and using the money to repurchase its stock and pay dividends, benefiting its shareholders.
Now that Apple’s the world’s most valuable public company, it has the potential to affect everyone’s investments 🤔 So while big tech lawsuits have been commonplace lately, the potential risk to its juggernaut services profits means the attack from Epic is likely to grab investors’ attention. Then again, maybe they shouldn’t be too worried: Apple’s new bundled subscriptions could make developers even more reliant on the tech giant for income.
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