“As Apple Inc. discusses ways to disburse some of its $137.1 billion in cash to shareholders, it will have to weigh the appeal of preferred shares against the higher dividends and buybacks favored by many investors,” Peter Burrows reports for Bloomberg. “Each option has advantages. Greenlight Capital Inc.’s David Einhorn is pushing for preferred shares, saying they benefit investors. Some shareholders said they’d be satisfied with higher dividends and bigger buybacks.”
“Apple is considering Einhorn’s proposal, and the board and management are actively discussing disbursing more cash, the company said in a statement. Directors have been working with Goldman Sachs Group Inc. to determine the best course, according to a person with knowledge of the plans, who asked not to be named because the talks are private,” Burrows reports. “While many investors agree Apple should return more money, some say Chief Executive Officer Tim Cook should focus on higher dividends, share buybacks or a special dividend.”
Burrows reports, “Einhorn is recommending that Apple issue $50 billion of preferred stock, to be traded alongside common shares and funded by operating cash flow. It would have a 4 percent annual cash dividend, paid quarterly, he said in a letter to shareholders. Preferred stock can have a higher yield and be issued without diluting the value of common shares.”
Much more in the full article here.
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