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Apple (AAPL +2.4%) responds to David Einhorn's letter opposing Proposal 2 within its shareholder...

Apple (AAPL +2.4%) responds to David Einhorn's letter opposing Proposal 2 within its shareholder meeting proxy by insisting the proposal won't prevent the issuing of preferred stock, but simply requires that such a move receive shareholder approval. The company adds it will "thoroughly evaluate Greenlight Capital's current proposal to issue some form of preferred stock," and has been "in active discussions about returning additional cash to shareholders." Shares spiked higher into the close. (Einhorn's letter)
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Comments (17)
  • hsd2
    , contributor
    Comments (15) | Send Message
     
    Very quick response, even Einhorn was probably thrown off at how fast they generated a press release. Definitely a good sign for SH as it shows Apple is at least thinking about its SH when considering what to do with all that cash..
    7 Feb 2013, 04:13 PM Reply Like
  • june1234
    , contributor
    Comments (2649) | Send Message
     
    I doubt it after the success his Oct presentation had on his Green Mountain shorts. Its a good idea, Cook wasn't doing anything, Einhorn is.
    7 Feb 2013, 05:20 PM Reply Like
  • pagreen1966
    , contributor
    Comments (601) | Send Message
     
    Can't wait for the shareholders meeting in a couple of weeks. Will be very interesting!
    7 Feb 2013, 04:13 PM Reply Like
  • raincity
    , contributor
    Comments (221) | Send Message
     
    looking forward to it as well. way to go Apple! Glad they are starting to take the offensive on others attacks.

     

    now waiting for the press spin, saying there is no innovation left 'cause they are giving away their cash. haha
    7 Feb 2013, 04:15 PM Reply Like
  • CarlIcahn121
    , contributor
    Comments (4) | Send Message
     
    Carl Icahn BOD
    7 Feb 2013, 11:12 PM Reply Like
  • Valuable Insights
    , contributor
    Comments (485) | Send Message
     
    No reason they can't up the dividend/use Einhorn's Preferred, and also increase the buyback so that it's more than a nominal amount. Management should show confidence that there's no better investment for Apple than Apple.
    7 Feb 2013, 04:51 PM Reply Like
  • shakenbake2011
    , contributor
    Comments (74) | Send Message
     
    Hopefully this press release represents a change within AAPL management regarding their attitude towards shareholders. Many of AAPL's shareholders are also loyal customers. Return money to the shareholders and they will use it to buy more iStuff. For as good as the company is with marketing its brand, one would think they would have done more to stem the discontent with their cash allocation policies before now. AAPL has not marketed their stock well as of late. It's still too early to tell the stock's fate, but AAPL needs to follow-through beyond their $10billion buyback considering the stock is roughly flat YOY vs a double digit S&P return. I don't think that following through on better net cash management and "making products their customers love" is too much to ask.
    7 Feb 2013, 07:13 PM Reply Like
  • Continental Kid
    , contributor
    Comments (210) | Send Message
     
    Anybody else curious as to Einhorns average Aapl cost....me thinks its above the 460 level..have no proof ...but just seems that some of the hedge fund guys want the market to go thier way all the time..(see Ackman.)..and have very public outbursts (or tantrums if you will) these days in attemps to move the market torwards thier positions...or am I crazy...?
    7 Feb 2013, 07:52 PM Reply Like
  • vandeley
    , contributor
    Comments (119) | Send Message
     
    He started buying AAPL in 2010 in the high 200s, he sold some in the low 600s. He has been buying back those shares and extras on the way down so his current buys are above 460 I'm sure, but his net purchase price is definitely below 460
    8 Feb 2013, 03:40 AM Reply Like
  • Aristiphones
    , contributor
    Comments (1327) | Send Message
     
    who the hell is David Einhorn insofar as "running the company" is concerned? Wasn't this the price of the stock the last time all of Wall Street said "their money was more important than Apple's"? How about announcing a major buildout of Apple's "I-cloud service" with an EMPHASIS on "securing all i-devices for the end user"? that actually sounds like a BUSINESS use for all that cash. Instead they look like some Wall Street slush fund who...like a restaurant owner turning to a payday lender but discovering "that's a 20% unpayable interest rate attached to that rescue"...finds "this is the wrong kind of help." Anywho "Microsoft appears to be buying the planet" right now...i would be more worried about what they're up to rather than one of a multitude of massive investors in Apple. this stuff really strikes me as a distraction.
    7 Feb 2013, 07:57 PM Reply Like
  • maxcray
    , contributor
    Comments (13) | Send Message
     
    Build out the cloud is a great idea. Piling up in the warehouse is a bad idea. If Apple is not going to use the money they should return it to shareholders.
    7 Feb 2013, 10:43 PM Reply Like
  • f16flyer1983
    , contributor
    Comments (154) | Send Message
     
    Apple is more than a one man show so upper management at a company of this size should be able to focus on marketing the product, building the product, developing the product....and on and on and on.

     

    Part of that management group is a CFO who has a group that has a focus on investor relations.

     

    If a company of this size can be distracted and loose sight of issues that should be handled by a CFO such as investor relations then it's a weak organization that needs to be replaced by someone who can delegate and lead accordingly.

     

    The board of directors do not make value added decisions on software, panel sizes, app store etc...they represent the share holders.

     

    Einhorn is trying to get some people off their butt and do their job and increase shareholder value by managing the 130 plus billion in cash they are holding. If this means that product development and sales suffer because of this action then changes at the CEO level need to be made ASAP as it is a broken comany.
    7 Feb 2013, 10:05 PM Reply Like
  • John N. Heil
    , contributor
    Comments (96) | Send Message
     
    The old saying holds true: Value will out! Here's the deal and it is only too logical. Sure, there will be regular increases in the quarterly dividend probably averaging 15-20 percent a year. That is your growth outlook even if EPS only grows 10-12 percent annually.

     

    What is far more exciting is the capacity AAPL has to buy back shares. Forget the issuance of preferred stock. That is a dumb idea and does not benefit employees with stock options that may extend ten years out. Einhorn seems to want a big pop in the stock now so he can perhaps cash in and be a hero as well. It is all nonsense and the board of directors will reject the idea out of hand.

     

    A share buyback works this way. Leverage your balance sheet, which does not require any repatriation of funds from abroad, by borrowing from the banks at a low interest rate say $75 billion for purposes of reducing the outstanding share total. That gives a huge bump to EPS. Or, simply issue a bond offering, say a ten year note, to yield only slightly above the ten year government bond. Any interest expense is deductible, and you save by not having to pay cash dividends on those retired shares. Additionally, you can use the cash horde for strategic acquisitions because you have not touched those funds.

     

    This is so obvious that I have considered my Apple shares the safest and best investment possible at this current price level. Never have I seen a stock with such downside protection given these annual humungous increases in free cash flow. And, of course, given the loyalty of Apple users and the company's ongoing innovative capacity given all their creativity and now with the motive to continue in Jobs footsteps.
    7 Feb 2013, 10:42 PM Reply Like
  • gcolston
    , contributor
    Comments (91) | Send Message
     
    Apple should just pay a larger dividend. There's no need for them to mess around with some fake preferred stock thing. It's not like they don't have the cash to pay the dividend without resorting to game playing.

     

    What do you bet that those 'preferred stocks' would end up in the hands of certain 'preferred' customers? (like Einhorn)
    8 Feb 2013, 12:20 AM Reply Like
  • rrosey2
    , contributor
    Comments (706) | Send Message
     
    Preferred stock in the case of this company, is just a way to skim money off the top.

     

    The best investment is Apple stock, and that means buyback, especially at this price.

     

    Apple will make more in one year on buyback than selling product !
    8 Feb 2013, 02:26 AM Reply Like
  • bgold1955
    , contributor
    Comments (2095) | Send Message
     
    Agree, buy back stock, increase dividend, and wait for new product announcements that will move the stock significantly. AAPL is a very strong buy now.
    8 Feb 2013, 08:29 AM Reply Like
  • AnaleezaHolder
    , contributor
    Comments (29) | Send Message
     
    Am in agreement with the group consensus here. Buy back stock, increase share holder confidence, satisfaction and market sentiment, therefore lead the share price upwards again.

     

    It was merely days and weeks ago, doom and death were the forecasts for AAPL, now that the stocks rising slowly again, the media is in love again. Such fair weather sucklings!
    8 Feb 2013, 12:10 PM Reply Like
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