Apple stock buyback to begin today

Part of Apple's plan to burn up a bit of that US$117.2 billion cache of cash starts today, according to Fortune's Philip Elmer-DeWitt. Over the next three years, Apple will use US$10 billion to repurchase shares of AAPL.

Elmer-DeWitt notes that one Wall Street analyst, Bernstein's Toni Sacconaghi, was less than thrilled by the announcement of the stock buyback when it was announced back in March. Sacconaghi wanted the company to give back some of the cash horde to shareholders, in particular the institutional investors who hold 70 percent of the total ownership of Apple. The repurchase plan really doesn't accomplish that, and Sacconaghi believes that many institutional investors wanted to see a larger dividend instead.

The impact of most stock buyback programs is an increase in earnings per share (EPS), since the earnings are spread over a smaller number of shares. Sacconaghi believes that EPS will only climb about 1-2 percent per year as a result of the buyback program, and that there won't be a rise in the share price as a result.