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After Lawsuit, Apple Evaluating If It Should Share More Cash

By - Source: Apple | B 26 comments

iPhone maker has a cash pile of $137 billion.

After being sued by one of its investors over demands that it should share more of its $137 billion cash pile to its shareholders, Apple has said it is "evaluating" the possibilities of doing so.

Manager David Einhorn of hedge fund Greenlight Capital, recently stressed that Apple had a "Depression-era" mentality, which made it hesitant to share its cash and generally play it safe. Einhorn stressed that the firm should distribute preferred stock to current shareholders, but Apple dismissed the idea when it was first discussed.

Einhorn added that while he understands why Apple maintains its large cash pile to be strategic, carry out acquisitions and be secure, he believes offering preferred shares to existing shareholders would allow Apple to share its cash while still boasting a substantial amount of its own.

In a statement, Apple stressed that it's aware that its cash has grown beyond what's required to run daily operations, but it's considering several possibilities in regards to sharing its $137 billion cash pile. Either way, even though it's no longer the world's most valuable firm, that amount has continued Apple's position as the world's richest company.

By early last year, Apple's cash balance had built to a point beyond what we needed to run our business and maintain flexibility to take advantage of strategic opportunities, so we announced a plan to return $45 billion to shareholders over three years. As of next week we will have executed $10 billion of that plan.

We find ourselves in the fortunate position of continuing to generate large amounts of cash, including $23 billion in cash flow from operations in the last quarter alone.

Apple's management team and Board of Directors have been in active discussions about returning additional cash to shareholders. As part of our review, we will thoroughly evaluate Greenlight Capital's current proposal to issue some form of preferred stock. We welcome Greenlight's views and the views of all of our shareholders.

As a part of our efforts to further enhance corporate governance and serve our shareholders' best interests, Proposal #2 in our proxy includes some recommended changes to our articles of incorporation. These changes were recommended independently of Greenlight's proposal and would not preclude Apple from adopting their concept. Contrary to Greenlight's statements, adoption of Proposal #2 would not prevent the issuance of preferred stock. Currently, Apple's articles of incorporation provide for the issuance of "blank check" preferred stock by the Board of Directors without shareholder approval. If Proposal #2 is adopted, our shareholders would have the right to approve the issuance of preferred stock. As such, Proposal #2 has the support of many of our shareholders.

We remain committed to having an ongoing dialogue with our shareholders to get perspectives around return of capital and driving shareholder value.
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  • 26 Hide
    Abion47 , February 8, 2013 10:30 PM
    Meanwhile, Bill Gates is giving billions of dollars of money to charity, much of which is out of his own pocket...
  • 25 Hide
    madjimms , February 8, 2013 10:34 PM
    Abion47Meanwhile, Bill Gates is giving billions of dollars of money to charity, much of which is out of his own pocket...

    I'm no Microsoft ass-kisser, but Between it & Bill/Malinda it has done more things in a decade than Apple has done for the past 30 years.
  • 22 Hide
    A Bad Day , February 8, 2013 9:32 PM
    If you got so much problem with a company stiffing you on stock dividends, then you can always get a different stock...
Other Comments
  • 13 Hide
    esrever , February 8, 2013 9:31 PM
    They will just use the money to sue people.
  • 22 Hide
    A Bad Day , February 8, 2013 9:32 PM
    If you got so much problem with a company stiffing you on stock dividends, then you can always get a different stock...
  • -8 Hide
    ELMO_2006 , February 8, 2013 9:53 PM
    Once again the shareholders thinking with their pockets!!! Good on Apple to snub their noses at these requests. Shareholders have no idea how the day to day operations of a company run, they are more concerned about large margins than the health of a company. Make their 500% return and then on to the next company as they try to suck the other company dry! I see it happen all the time at the company I work at. Making billions hands over fists and at the same time complaining how the margins are thin and they need to answer to the shareholders thus cut, cut , CUT!

    Kudos to Apple on this front.
  • -9 Hide
    m32 , February 8, 2013 10:00 PM
    Mr. Stockholder, I don't like Apple's business practices but they know how to do this and do it very well... MAKE MONEY! Y u complain?
  • 0 Hide
    emperor piehead , February 8, 2013 10:05 PM
    You know apple you should give that money to Google that is enough to cover all of the US in Google fiber. Too bad that would never happen
  • 4 Hide
    Anonymous , February 8, 2013 10:06 PM
    Why do they need investors when they have $137 billion in cash, buy them out and go private? im not into finance so i could be missing something but...
  • 26 Hide
    Abion47 , February 8, 2013 10:30 PM
    Meanwhile, Bill Gates is giving billions of dollars of money to charity, much of which is out of his own pocket...
  • -4 Hide
    SneakySnake , February 8, 2013 10:32 PM
    Abion47Meanwhile, Bill Gates is giving billions of dollars of money to charity, much of which is out of his own pocket...


    well I would certainly hope he's not giving other people's money away. That kinda defeats the point of charity ;) 
  • 25 Hide
    madjimms , February 8, 2013 10:34 PM
    Abion47Meanwhile, Bill Gates is giving billions of dollars of money to charity, much of which is out of his own pocket...

    I'm no Microsoft ass-kisser, but Between it & Bill/Malinda it has done more things in a decade than Apple has done for the past 30 years.
  • 4 Hide
    xpeh , February 8, 2013 10:57 PM
    SneakySnakeApple's given you the modern version of the smartphone and tablet (yes, they didn't invent them, but without the iPhone/Pad the smartphone market would likely still be full keyboards, and their would be no tablet market).Apple contributes to society by pushing the tech industry forward, most recent example being retina displays in laptops. Now, obviously they could afford to donate billions and do not, but they're a business, I do not expect them to donate. I expect individuals to donate (apple execs), which they haven't done nearly enough of.


    Apple simply gave it to us first. If Apple wouldn't have invented the iPhone/iPad, another company would have, like Google. Google has been working on Android at the same time that Apple was working on IOS. Apple simply released their product first.
  • -9 Hide
    SneakySnake , February 8, 2013 11:03 PM
    xpehApple simply gave it to us first. If Apple wouldn't have invented the iPhone/iPad, another company would have, like Google. Google has been working on Android at the same time that Apple was working on IOS. Apple simply released their product first.


    Precisely. I'm not saying they're the best, or that what they did was magic, just that they gave it to us. As such the market was given something that they can now base their designs off of and improve upon.

    Now look at the smartphone market. You have many great devices to choose from: Nexus 4, iPhone 5, the soon to be released GS4, the Lumia 920, the BB Z10, etc. All great devices offering consumers lots of choices, if google had released android that was fully for touch screens (at the time of the iPhone announcment they were working on both keyboard and touchscreen, androids) lets say in 2009 (compared to the iPhone in 2007), the smartphone market would not be nearly as far along as it is today. We can thank companies like Samsung and Google for that, but don't be so quick to disregards Apple's contribution.
  • 7 Hide
    Abion47 , February 8, 2013 11:06 PM
    SneakySnakeApple's given you the modern version of the smartphone and tablet (yes, they didn't invent them, but without the iPhone/Pad the smartphone market would likely still be full keyboards, and their would be no tablet market).Apple contributes to society by pushing the tech industry forward, most recent example being retina displays in laptops. Now, obviously they could afford to donate billions and do not, but they're a business, I do not expect them to donate. I expect individuals to donate (apple execs), which they haven't done nearly enough of.


    I don't think its unreasonable to expect anyone and anything that has $137 billion literally just laying around to at least recognize charity as a viable option. I mean really, this company has billions of dollars and they don't know what to do with it? Then give it to somebody to does!
  • 7 Hide
    tacobravo , February 9, 2013 1:08 AM
    xpehApple simply gave it to us first. If Apple wouldn't have invented the iPhone/iPad, another company would have, like Google. Google has been working on Android at the same time that Apple was working on IOS. Apple simply released their product first.


    Apple did not give smartphones and tablets to "us" first. Apple just made what existed already hip. They did not invent the iphone/ipad (hell the iphone name wasn't even theirs, it was owned by Cicso before Cisco sued Apple) but merely put existing technologies into their own package. I call that innovation not invention.
  • 1 Hide
    Marcus52 , February 9, 2013 1:45 AM
    emperor pieheadYou know apple you should give that money to Google that is enough to cover all of the US in Google fiber. Too bad that would never happen


    Can you say "Google fanboy"?

    Seriously, I don't like using the "fanboy" label, but this kind of thinking just shows how ignorant people are of Google's business practices, especially their disdain for your right to privacy. And, the company is rich enough it doesn't need hand-outs from some one else to do whatever it wants.
  • 6 Hide
    iam2thecrowe , February 9, 2013 3:02 AM
    too bad Apple doesnt understand the word "charity". They could really help some people with that, even 5% of that would do a hell of a lot.
  • -1 Hide
    stoogie , February 9, 2013 4:11 AM
    Marcus52Can you say "Google fanboy"?Seriously, I don't like using the "fanboy" label, but this kind of thinking just shows how ignorant people are of Google's business practices, especially their disdain for your right to privacy. And, the company is rich enough it doesn't need hand-outs from some one else to do whatever it wants.

    And you don't understand what he meant, sigh idiots...., i'll give u a hint: better internet.
  • 2 Hide
    psykhe , February 9, 2013 5:30 AM
    SneakySnake...but don't be so quick to disregards Apple's contribution.


    The problem is that nowadays the seem to have a negative effect. Both Apple and Google had last year higher patent-related costs (court activities and buying patents to use there) than they invested into R&D. We can "thank" Apple for starting this trend, too.

    And despite having far higher profits than other tech companies the actual amount of money Apple currently invests into R&D is lower than that of Google, Samsung and Microsoft.
  • 1 Hide
    noob2222 , February 9, 2013 7:05 AM
    Apple share money they stole by suing people for stolen ideas? good luck with that.
  • 3 Hide
    alidan , February 9, 2013 1:08 PM
    SneakySnakeApple's given you the modern version of the smartphone and tablet (yes, they didn't invent them, but without the iPhone/Pad the smartphone market would likely still be full keyboards, and their would be no tablet market).Apple contributes to society by pushing the tech industry forward, most recent example being retina displays in laptops. Now, obviously they could afford to donate billions and do not, but they're a business, I do not expect them to donate. I expect individuals to donate (apple execs), which they haven't done nearly enough of.


    yea, we want out phones thin so the batteries suck
    covered in glass so god forbid one falls even an inch in an unlucky spot it could shatter the whole thing
    and good god i want to be charged 100$ for every memory increment (8-16-32-64-128, i believe each one they charge at least 100$ more to go to the next tier, only making it cheaper if they no longer offer the bottom option)
    oh yea, lets not forget trying to stagnate the market with anti competitive practices, and making the walled garden approach so appealing google and microsoft are trying it out.

    as far as im concerned apple is killing tech.

    Marcus52Can you say "Google fanboy"?Seriously, I don't like using the "fanboy" label, but this kind of thinking just shows how ignorant people are of Google's business practices, especially their disdain for your right to privacy. And, the company is rich enough it doesn't need hand-outs from some one else to do whatever it wants.


    well. lets see here.
    i pay over 100$ a month for a 75mbit down 5 (should be 10 but its 5) up and if someone sneezes at them i may have done something they give up information, its that, dsl which in my area is unusable for games, or satellite which is barely better than dialup.

    given a choice betten who i have now, and google, i would chose google, becuase their top end fiver service is what 70 or so $ a month if i remember right, and what would cost me 50$ is free.

    i cant say fanboy when everyone snoops on you, and when you get to have google as a choice you take them.

    i would sooner take google as a provider, because they dont make money serving you, they make money through ads, they give you the internet probably at cost for service and maintenance so you can use them.

    apposed to cable companies that make money on screwing you over, and monopoly practices.
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