“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.
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