Greenlight Capitol fund manager David Einhorn has filed a lawsuit against Apple because he thinks the company's purse strings are a little too tight. Mr. Einhorn's suit targeted Apple's move to eliminate preferred stock, and he wants Apple to share more of its profits with investors.
"Apple is a phenomenal company filled with talented people creating iconic products that consumers around the world love," Mr. Einhorn said, according to CNBC. "But Apple has a problem, we think. It has a cash problem."
Apple ended its first fiscal quarter of 2013 with over US$137 billion in cash, and Mr. Einhorn would like to get ahold of some of that for his investors.
The company's coffers aren't, however, completely locked up. Apple has started paying shareholder dividends for the first time, although Mr. Einhorn thinks it isn't enough.
Hoarding money does give Apple a significant buffer zone -- especially considering the company has over $137 billion in the bank -- that can be used for product development, marketing, and other strategic moves. But it also means that investors can't take advantage of all the potential Apple's profits might offer.
Mr. Einhorn said Apple is acting like someone who has experienced trauma, adding "they sometimes feel they can never have cash."
Apple has not commented on the law suit.
[Some image elements courtesy Shutterstock]
2 Comments
“Apple ended its first fiscal quarter of 2013 with over US$137 billion in cash, and Mr. Einhorn would like to get ahold of some of that for his investors”
And himself no doubt.
If he doesn’t like it, he can vote with his stock or sell it and put his money elsewhere. I’m a (small) stockholder in Apple because I believe in the way the company does business. Good riddance to this guy and his kind.
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