Larry Haverty, portfolio manager at Gamco Investors, discusses possible lawsuits against Apple’s board if they don’t act on accumulation of cash.

He speaks on Bloomberg Television’s “Bloomberg Surveillance.”

I gotta think that the [Apple Inc.] Board is going to do this, or someone is going to sue them pretty quickly… Someone is going to sue them for excessive accumulation of cash.

… They’re going to have to come up with a low-cost phone because the market in China is in the neighborhood of $100-$200 per smartphone and it’s a mind-boggling market… The country loves these products, they love the Apple products, but the mass market can’t afford $600-$700 products.

The thing about the Apple juggernaut, why it continues… it’s the dominant platform in the phone and in the tablet [markets] and the apps are going to be developed for it and it becomes symbiotic… keeping people in the ecosystem. So, when you can get this for five times cash flow [!]… five times cash flow – trailing! – If you can get this for five times cash flow, the cash in going to build up, and you have this obsolescence with these products, and the people who love the products are going to replace them. It’s like Coca-Cola. – Larry Haverty, Gamco Investors

Direct link to video here.