Apple Says Holding 'Active' Talks On Giving Back More Cash
I think Apple just blinked.
In a fairly extraordinary step, Apple today issued a response to this morning’s public call by Greenlight Capital’s David Einhorn for the company to return more cash to holders. Einhorn in particular is opposed to a measure to be voted on by Apple holders that would make it tougher for Apple to issue preferred stock. He thinks that the company should issue a new class of perpetual preferred shares as a way to distribute some of its huge cash flows to investors.
Apple has $137 billion in cash, far more than any other public company, and about 30% of the company’s market cap.
Apple’s statement notes that by early last year, the company’s cash balance had reached a level beyond what it needed to run the business; ergo, it announced a plan to return $45 billion to holders over three years in the form of dividends and stock buybacks. The company notes that as of next week it will have executed $10 billion of that plan.
But the company added that it now is “in the fortunate position of continuing to generate large amounts of cash, including $23 billion in cash flow from operations in the last quarter alone.”
The company said its board and management “have been in active discussions about returning additional cash to shareholders.” As part of that review, Apple added, it will “thoroughly evaluate Greenlight Capital’s current proposal to issue some form of preferred stock. We welcome Greenlight’s views and the views of all of our shareholders.”
Apple added that the proposal Greenlight opposes would not bar the issuance of all preferred shares, but would simply prevent the board from issuing preferred shares without holder approval.
Added Apple: “We remain committed to having an ongoing dialogue with our shareholders to get perspectives around return of capital and driving shareholder value.”
AAPL in today’s regular session rose $13.52, or 3%, to $468.22.
forbes.com |
