hedge funds lend money to apple who needs the money to buy the shares. So the hedge funds are buying the shares first and get the dividend + the yield on the bond + capital appreciation from Apple buying back shares.... neat!
I can't follow that kind of reasoning. He also mentioned Ponzi in his rationale. i don't get it.
Hedgies buy bonds and with additional cash buy shares for the dividend and appreciation. Nothing Ponzi about that.
Apple secures the bonds with their offshore cash hoard. So they take on debt to buyback shares of stock to reduce the number of shares outstanding with an additional benefit of not paying dividends on those shares.
Nothing Ponzi about that.