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David Einhorn's preferred stock proposal is "creative," Tim Cook states at a Goldman conference....

David Einhorn's preferred stock proposal is "creative," Tim Cook states at a Goldman conference. But he calls Einhorn's opposition to Prop. 2 a "silly sideshow," and insists the measure is meant to empower shareholders. He claims Apple's (AAPL -1.2%) management/board are in "very active discussions" about returning additional cash, but remains tight-lipped about details. Apple is spiking lower after temporarily doing the opposite. (live blog) (webcast) (previous)
Comments (36)
  • Sounds like Cook confirmed that the company will finally be distributing some of the cash on hand. Note also, he called Einhorn's method creative...last I checked, Apple loves to be "creative". Just something to think about.
    12 Feb 2013, 10:47 AM Reply Like
  • Yea, but the term "silly sideshow" seems equivalent to having Jobs call someone a "Bozo".


    I take it that Cook just called Einhorn a "Bozo" in a very diplomatic way.
    12 Feb 2013, 11:12 AM Reply Like
  • What is Prop 2 ?
    12 Feb 2013, 10:58 AM Reply Like
  • Deals with the issuance of Preferred Stock, or rather, preventing the company from issuing preferred stock as part of its capital structure.
    12 Feb 2013, 11:06 AM Reply Like
  • They can issue preferred stock but will require stockholder approval. Currently it doesn't require that.
    12 Feb 2013, 11:28 AM Reply Like
  • Cook should've told Einhorn that if he has a problem to simply sell his shares.
    12 Feb 2013, 11:28 AM Reply Like
  • Kind of defeats the purpose of being an activist investor then, no?
    12 Feb 2013, 11:37 AM Reply Like
  • would like to know how the Preferred Stock would be created? By distribution to common stockholders as a form of dividend? By sale of additional stock? To common stockholders at a discount? would like some clarity.
    12 Feb 2013, 11:30 AM Reply Like
  • preferred stock would be issued in proportion to the shares you hold at no cost
    12 Feb 2013, 11:59 AM Reply Like
  • iHorn is an iDiot.
    12 Feb 2013, 11:31 AM Reply Like
  • OK CPA types.Apple's common dividend is tax-qualified making it taxable at 15%(20% if income is greater than $450,000 jointly).Would preferred dividends also qualify for this tax treatment?Maybe not.If that is the case,I'll take a boost in the regular dividend any day rather than be taxed federally at 39.6%.Comments??
    12 Feb 2013, 11:39 AM Reply Like
  • Preferred would be taxed at 15%.
    12 Feb 2013, 11:51 AM Reply Like
  • Why would management ever been in favor of changes to articles of incorporation that would limit their flexibility in issuance of debt and/or preferred shares? Shareholders don't always have wisdom in such matters and might conclude that any type of financing that was senior to their own interests must be "bad," by definition, when, of course, that's not necessarily the case. For example, in a low-interest-rate environment, such as now, issuing debt or preferred shares might make a lot of sense.


    I just can't help getting the impression from the post-Jobs Apple that they've lost their way in product evolution and market sensitivity and are constantly lagging their competition. In the field in which they live, consumer technology, it's either keep innovating or become moribund. There's no sustainable defense in patent lawsuits or in turning Apple into some kind of dividend milk cow, unless they wish to find themselves with share performances, like a Microsoft, Intel or HP.
    12 Feb 2013, 11:49 AM Reply Like
  • Listen to Tim Cook:
    12 Feb 2013, 01:12 PM Reply Like
  • I have an idea for apple and it is a product call iCook


    iCook will enable you to send an email to the wrold telling them why this executive should be fire because he is detremintal to your stock price


    Thank you for sending the stock price down by $9 now
    Watch the chart of AAPL went straight down while Cook is talking
    12 Feb 2013, 12:01 PM Reply Like
  • you are an idiot.
    12 Feb 2013, 01:10 PM Reply Like
  • Once management gets involved with financial engineering to accommodate investor demands instead of focusing on pure product development and execution I'd watch out. I'm not sure Jobs would have paid any attention to Einhorn's suggestions.
    12 Feb 2013, 12:06 PM Reply Like
  • Agree, and not impressed with the press conference, because of both the content, and more importantly, the context and venue where it was held, sends a loud message to shareholders and consumers.


    Apple should be communicating the technology and work the financial stuff in the background.


    That's how they got to be successful in the first place.
    12 Feb 2013, 12:42 PM Reply Like
  • Bingo--exactly why Cook is ignoring.... Smart guy. This company is a product development company. R&D pure and simple.... stay the course.
    12 Feb 2013, 03:55 PM Reply Like
  • You are not sure whether Jobs would have paid any attention to it? I am pretty sure he would have ignored it altogether.
    12 Feb 2013, 04:05 PM Reply Like
  • Empowering shareholders. What a concept. The problem though is that most shareholders are passive investors, even those that claim to be "activist," and only look to gamble.
    12 Feb 2013, 12:14 PM Reply Like
  • Cook seemed very confident in the talk and had a strong mentality. I am glad that he said that there are "grenades being thrown at him from all sides" and he basically doesnt give a toss. He is not answerable to any analyst or writer. He is doing his job well and shows a passion for introducing apple to new customers and also keeping the original apple users pleased to.
    12 Feb 2013, 01:09 PM Reply Like
  • If he really didn't care, why did he pick a financial venue with Goldman Sachs?


    Not faulting the guy personally because he's filling in nearly impossible shoes, but I wouldn't have even acknowledged shenanigans like the one from Einhorn.
    12 Feb 2013, 03:14 PM Reply Like
  • Cook doesn't have time for riff raff like Einhorn anymore.He'll be presidents guest at state of the union. Maybe he'll introduce the I watch then. I'm holding out for the I socks.
    12 Feb 2013, 01:11 PM Reply Like
  • I agree Whitehawk, activist investors are not necessarily the ones to look to for real solid ideas. The label usually refers to those who are looking to manipulate share price short term.
    12 Feb 2013, 01:12 PM Reply Like
  • Tim Cook could have hinted at a new product or increased dividend or something that would have boosted the stock price today. Such a hint would have cost Apple nothing yet it would have sustained the stock price for now until they are ready to release the details. Instead he was completely oblivious to the harm he is causing to AAPL share holders by stupid comments like "our cash is not burning a hole in our pockets" and "we are not a hardware company"


    Wow, what an ignorant disregard for shareholders' best interests. We would have been much better off without Tim Cook saying a word today.
    12 Feb 2013, 02:12 PM Reply Like
  • I just pray Cook does not become another Balsillie.Us longs will be toast.
    12 Feb 2013, 03:21 PM Reply Like
  • Seriously guys? AAPL had just risen straight up 12% from the lows, why are you guys so surprised that some selling kicked in?
    12 Feb 2013, 04:08 PM Reply Like
  • It went up 12% in SPITE of Tim Cook, not because of him
    12 Feb 2013, 04:59 PM Reply Like
  • Every time Tim Cook opens his mouth the value of APPL shares goes down. He has a disregard for shareholders, including those who are employed by Apple. Someone please take the microphone away from him. One thing is for sure, Apple will be able to buy back more shares at a deeper discount. Hmmm
    12 Feb 2013, 04:25 PM Reply Like
  • Actually quite the opposite-- Tim Cook seems to have way more 'regard' for shareholders, but the market is rejecting it.


    Shareholders prefer to be sold promises of 'future returns.'
    12 Feb 2013, 05:12 PM Reply Like
  • Future returns for shareholders would be nice, but it seems management is using the returns to buy back shares at a discount. How about giving some to the shareholders or at least try to stabilize the share price so I don't lose more
    12 Feb 2013, 05:20 PM Reply Like
  • Only 32 comments. Back int he day, like a month back, we would have seen 320 comments already. Apple may be bottoming.
    12 Feb 2013, 08:50 PM Reply Like
  • I'm not an expert, but I believe the appeal of Preferred Stock, is that the dividends are treated as interest, and as such, are a deductible to Apple. Common stock dividends are not, and are treated as a return to stockholders. First the company pays taxes on its earnings, and then you, the recipient, pay taxes again (unless held in a retirement account).
    12 Feb 2013, 09:54 PM Reply Like
  • Tim Cook isn't the problem. The problem is the knee-jerk reaction of investors. One activist investor makes a suggestion to Apple on capital allocation strategy and backs it w/ a crack-pot lawsuit and the market reacts favorably as if it's actually going to happen. Cook makes a speech that isn't much different than anything else Apple has said for oh, the last decade or so, and the market reacts as if something bad has happened. Would investors be happier if Apple's management changed their mind every time someone on the outside makes a suggestion as to what to do?
    13 Feb 2013, 04:14 AM Reply Like
  • AAPL investors keep holding out hope that Apple will finally do or say something to help us recover from our rediculous losses of this past few months. Whenever any event occurs that suggests that THIS will finally be the time when Apple steps up to help the stock price the market rises in anticipation of that. When instead we get the same old "great prawww ducks" bs from Tim Cook and nothing more, the shareholders react with great dissapointment.
    13 Feb 2013, 11:34 AM Reply Like
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