| Telegraph.co.uk | - |
David
Einhorn, the outspoken head of Green Light Capital, said Apple must
“examine all of its options to unlock the growing value of its balance
sheet for all shareholders”.
Wall St hedge fund manager tries to force Apple to share out its $137bn cash pile
One of Wall Street’s biggest hedge fund managers is suing Apple in an attempt to force the iPhone maker to give more of its $137.1bn (£88bn) cash pile to investors.
Three-fourths of the retail expansion will happen outside the US Photo: AFP
9:36PM GMT 07 Feb 2013
Comment
David Einhorn, the outspoken head of Green Light Capital, said Apple must
“examine all of its options to unlock the growing value of its balance sheet
for all shareholders”.
Until recently, Apple shares were the hottest on Wall Street as the success of
the iPhone and iPad sent them to a record high of $705 in September.
Since then, fears that Apple’s growth is slowing and its margins are shrinking
have seen the shares lose more than a third of their value.
The steep drop has heaped pressure on chief executive Tim Cook to find ways of
returning the cash the company has accumulated to shareholders. Mr Einhorn
is suing to prevent Apple eliminating preferred shares, something the
Silicon Valley company wants to do at its annual shareholder meeting this
month.
Although preferred shares do not carry voting rights, they do typically carry
a greater responsibility to pay dividends. The hedge fund manager instead
wants Apple to issue more preferred shares that would offer shareholders
dividends.
Mr Einhorn described Apple as a “phenomenal company filled with talented
people creating iconic products”, but said the proposed change
“unnecessarily limits the board’s flexibility to distribute preferred stock
as a means of unlocking shareholder value”.
“We understand that many of our fellow shareholders share our frustration with Apple’s capital allocation policies,” Mr Einhorn wrote in a letter to Apple shareholders. “Apple has $145 per share of cash on its balance sheet. As a shareholder, this is your money.”
Since he replaced Steve Jobs as chief executive in 2011, Mr Cook has moved to give more cash to investors.
Last year saw the company pay dividends for the first time and introduce a $10bn buy-back programme.
Apple said the resolution it proposed at its annual meeting will not prevent the company issuing preferred shares to its investors.
“We understand that many of our fellow shareholders share our frustration with Apple’s capital allocation policies,” Mr Einhorn wrote in a letter to Apple shareholders. “Apple has $145 per share of cash on its balance sheet. As a shareholder, this is your money.”
Since he replaced Steve Jobs as chief executive in 2011, Mr Cook has moved to give more cash to investors.
Last year saw the company pay dividends for the first time and introduce a $10bn buy-back programme.
Apple said the resolution it proposed at its annual meeting will not prevent the company issuing preferred shares to its investors.
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