“David Einhorn, who is a widely followed hedge fund manager, filed a law suit against Apple on Thursday. With as much as $137 billion in cash on the balance sheet Einhorn feels Apple should return some of that cash to shareholders,” Lee Brodie reports for CNBC. “Specifically, Einhorn wants Apple to distribute high-yielding preferred stock and charges that the company is trying to adopt new rules to prevent that from happening.”
“‘Now, I have to admit I have, at times I too have groused about Apple not putting this capital to work in a useful fashion,’ said Jim Cramer. ‘However, I have never thought, in a million years, that somehow Apple had become a bad actor because of its conservative ways of handling its money. I have simply thought that it should be more creative in figuring out how to put it to use.’ In other words, Cramer thinks Einhorn has gone too far,” Brodie reports. “‘Einhorn can certainly question what Apple’s doing with its cash, (but a lawsuit) is very wrong-headed and an unfair move,’ he said.”
Brodie reports, “Cramer believes Apple has every right to hold that cash. ‘This is a high quality problem, to say the least, a by-product of enormous success that can be solved simply by Apple raising its own dividend,’ said Cramer. ‘I have no doubt that if the company were to institute a bigger buyback and/or double its dividend shares would go higher, perhaps appreciably higher.’ However Cramer thinks the real solution is for Apple to develop new and innovative products; if the company does that – he believes everything else will fall into place.”
Read more, and watch the video, in the full article here.
Related articles:
Analysts: Apple may crack open its massive, bulging wallet for shareholders – February 8, 2013
Apple with $137 billion in cash considers preferred stock – February 8, 2013
Einhorn’s Apple lawsuit marks biggest investor challenge in years – February 8, 2013
Gamco’s Haverty: Apple’s cash is ‘shareholders’ cash’ (with video) – February 8, 2013
Apple shares surge following company response to Einhorn – February 7, 2013
Greenlight’s Einhorn sues Apple over plan to eliminate preferred stock, wants more cash distributed – February 7, 2013
Greenlight Capital urges Apple shareholders to vote ‘No’ on proposal 2 that would impede Apple’s ability to unlock shareholder value – February 7, 2013
Greenlight’s Einhorn sues Apple, ‘dissatisfied with capital allocation strategy’ – February 7, 2013
Gamco’s Haverty: Apple board can be sued over excessive accumulation of cash (with video) – January 28, 2013
Greenlight’s Einhorn: Apple ‘the best big growth company’; Fed stimulus ‘counterproductive’ – July 10, 2012
David Einhorn says Apple isn’t a below-average company, it’s just priced like one – May 30, 2012
I think Cramer is bi-polar. One day he is lucid and reasonable. The next day he takes an opposing view.
Concur. And Observer is right, too. I think MDN should stop providing publicity for this flip flopper / hit whore / “entertainer”.
A bit like Woz!
At least Woz accomplished something wonderful in his life.
No, Peter, not at all like Woz. You know not of what you speak. You are far too eager to disparage someone who has likely contributed far more to the rest of us than you ever will in your life.
Jim sure is loud.
Cramer is an entertainer. That’s what he gets paid to do. If you believe you will get sound financial advice from him, good for you. But, you will be on a roller coaster ride of buying and selling and the only one who will make money will be your broker.
He’s an entertainer with no incentive to make you money. Period!
You have absolutely no idea what you’re talking about. Zero. Please educate yourself before spewing your B.S.
Without ratings for his TV show, he would be gone. That’s the first rule of TV, especially in this day in age.
Educate yourself.
So, you think he cares more about making you money then he does his TV ratings? Blahhhhhhh burp! That enough spewing for you JoeBob?
“…Apple not putting this capital to work in a useful fashion…”
I guess that means he thinks it’s more important to dole out money to shareholders who haven’t done anything meaningful to earn it rather than invest in/buy new technologies.
Yes but that’s what investors receive back for their investment yah know? That’s the way it works. I mean if the money could only be paid to those “worthy enough” who created this stuff you would make Jony Ives and a few others multi-billionaires overnight and kill the stock market.
Investors receive money back on their investments by selling shares, its really just that simple. Just because they missed the balloon ride up at $600-$700 thats not Apple’s problem.
Apple needs to focus on what has gotten them this far, great products, the profits will follow by the truck loads.
swEinhorn is just one of the thousands of lazy short selling do nothings pissed because its not going lower, and he has no way of liberating Apple’s cash into his own pockets.
It’s a win-win in my case. I’d just use the money to buy more Apple products, I need some upgrades.
Ok, Apple wins the lawsuit and sues onehorn for attorneys fee.
So much misinformation. All the suit is asking is that Apple not change the corporate charter in a way that could hinder ways of dealing with the cash. Article 2 on the upcoming ballot was created because a shareholder took issue with a provision in the existing rules. Now another suggest they may have failed to consider the implications of the change.
Apple has responded already that the fix as they see it won’t create the new problem. I’m sure some smart people are looking carefully to clarify this. The suit isn’t to make them do anything it was stop them from potentially making a mistake.
Thanks for a note of sanity. The change by Apple is a bit odd, since, in effect, the board seems to be asking the shareholders to take away a sometimes useful power from it.
Yesterday Cramer ‘s advice was for Apple to buy Netflix. Wow, Apple just does not want to listen to him. What a surprise! Whatever their motives, you can be sure that neither Cramer nor Einhorn care about the retail investor. They want Apple’s money.
IMO, Jim Cramer is as bad as they get. He admitted manipulating stock when he was a hedge fund manager. If you can stomach it, look up his old interviews on Youtube, where he brags about his manipulation prowess. He pumps and dumps stock for gain and AAPL is no exception. And now Einhorn has gone too far? What a joke.
How can you sue someone who has broken no law?
It is a sad state of affairs when a bloody HEDGE FUND MANAGER tells AAPL what to do, and people TAKE HIM SERIOUSLY. This a**hold isn’t the solution, he’s the PROBLEM!
If Cramer says you’ve gone too far, you know you’re Batshit Crazy.
SEC, investigate the fucker! Somethings wreaks of hostile intentions in this vulture and the amount of shares he recently acquired…
He’s got enough shares to sacrifice and the motive to manipulate Apple’s targeted stock tumble, which also could have caught him with his pants down since he’s known as king of the short sellers.
Lots of people are wanting to focus on non-existing problems and are worried about the future of Apple. Apple is doing what Apple does and its level of success is what other companies can only dream about. All these critics of Apple have no experience in running an operation like Apple and are instead more interested in the politics of money.
Einhorn supposedly has a personal net worth of $1.2 billion and he’s crying that he’s not getting paid enough. Him and Gordon Gekko have been sleeping together.
Loud wheel get the grease…You’re off base on this Cramer…
David Einhorn = gluttonous bottom feeder!
Tim Cook gave them an inch with a dividend last year, and now look at what we’ve got. Scathing fabricated articles announcing the doom of Apple and demands from Wall Street that Apple uses their capital. Of course, notice how the majority of these slanted articles depict dividends and share buybacks as the answer. This obviously stems from their greed to not mention Apple’s ability to move into new markets that may require using that cash.
Everything Wall Street says comes from their wallets… they’re not what a technology company should seek for advice about money. (Because the answer will always be to give the money to the shareholders where that money is of no benefit to Apple whatsoever.) If Tim Cook folds under this pressure Apple will be in effect rewarding these crooks to continue the astroturfing and negative publicity via fabricated journalism.
I wouldn’t give them an extra inch. I’d buy stuff instead to create the next big thing(s) / advancements in technology. Shareholders need not apply.
Cramer did bet on falling APPL stock quotations. Now, unexpectedly, Einhorn pissed on his leg… so, Cramer is really pissed. while the stock is raising 🙂