Hedge fund manager David Einhorn of Greenlight Capital pointed out that Apple’s $137 billion cash stockpile is larger than the market capitalization of all but 17 companies on the S&P 500.
It’s one of the points Einhorn made as he takes his campaign to shake more cash out of Apple directly to the public. He’s hosting a conference call right now to argue why Apple should issue perpetual preferred stock to return some of its cash pile back to investors.
“It’s not complicated. It’s merely unfamiliar,” Einhorn said of his plan for perpetual preferred stock. He also called it “innovative.”
Einhorn has sued Apple to bar the company from enacting a shareholder proposal that he says will get rid of Apple’s ability to issue preferred shares, a claim the company disputes. A US District judge on the case said earlier this week that Greenlight has a likelihood of success. Shareholders are scheduled to vote on the measure on Feb. 27.
Although Apple CEO Tim Cook called the dispute with Einhorn a “silly sideshow,” Apple has said it is studying Einhorn’s proposal and is considering ways to return more cash to investors. Last year, it announced a plan to return $45 billion to shareholders over three years.
Investors have been grumbling about Apple’s lack of generosity to shareholders for years, but many didn’t see an opportunity to pressure the tech giant because it’s stock had been performing so well. That has changed over the last several months, with Apple stock falling by more than 35% since September amid intense competition with Samsung for tablets and mobile phones.
Not every Apple shareholder is on board with Einhorn’s plans. The largest US pension fund, Calpers, supports Apple’s proposal because it requires a shareholder vote before eliminating the ability to issue preferred shares.
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