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Hedge fund manager David Einhorn sues Apple over $137B cash hoard - Page 5

post #161 of 175
I don't think issuing perpetual preferred stock is in the best interest of the company. Adding a preferred stock would just lower the value of the common stock anyways. I think Apple wants to see itself at a $1000 stock price, probably a reason they haven't issued a stock split. The best thing Apple should do is to buyback more shares. Issuing a buyback will lowers the total number of outstanding shares; lowering supply and increasing demand for the stock. If they believe in their company and how undervalued it is right now, then issuing a large buyback would be the best way to convince investors.
post #162 of 175
Quote:
Originally Posted by bugsnw View Post

I'm surprised Obama and team haven't looked more at this potential source of new revenue. Section 531 of the IRS code calls for a 15% tax on excessive retained earnings. At least that's how I read it. It just hasn't been enforced aggressively.

 

I imagine the debate would then move on to what is excessive. Either way, holding excess cash from earnings does slow economic growth.

 

This is part of the damage that occurs when corporations and individuals are in a defensive mode. We see it in nearly all our clients. It's hammering the economy.

 

Apple is spending a lot of money on capital projects: new "spaceship" HQ; servers farms; green power plants.

 

Also, nearly half of Apple's billions sit in overseas banks because the US-IRS wants 35% of it if it is ever brought into the USA. It doesn't matter how much money Apple has, what is important is where it is located. So how can Apple's US-based cash be regarded as "excessive retained earnings" and how does it slow economic growth?

post #163 of 175
Quote:
Originally Posted by sip View Post

 

Apple is spending a lot of money on capital projects: new "spaceship" HQ; servers farms; green power plants.

 

Also, nearly half of Apple's billions sit in overseas banks because the US-IRS wants 35% of it if it is ever brought into the USA. It doesn't matter how much money Apple has, what is important is where it is located. So how can Apple's US-based cash be regarded as "excessive retained earnings" and how does it slow economic growth?

 

They can float a bond at 2% like all the other companies that paid special dividends last year.

 

No one cares if they is a $10B bond on the balance sheet as long as there is $130+ B in cash.  That way they avoid the 35% tax.

post #164 of 175
Quote:
Originally Posted by focher View Post

Just so we're clear, I am a lawyer and your understanding of stare decisis is exactly as you describe ... one of a citizen and rather misinformed. A Michigan Supreme Court decision is exactly that, a ruling for Michigan. And it doesn't even say what you claim it says. There is no other settled law that the creation of shareholder value is a fiduciary duty of the board or officers in a corporation. You can write as long of a treatise as you want, but it's still not true. If you want to argue that there's an obligation that's a different thing but when you claim to the "legal obligation" standard you just don't have anything. Just imagine the complete mess that would be created if your premise were true. Every time a stock decreases in value, you are suggesting that shareholders have a valid civil claim. It's so ludicrous that it's hard to take the premise seriously. Beyond that, it's just not the law. Yes, it's true. I am stating outright that it's not the law. Even in Michigan. When you cite a single statute or even ruling court decision that says it is, then we can argue it. Otherwise, your premise is nothing more than your personal "informed citizen" view. That's worth twice as much as your legal knowledge. Anyone who argues a published article in the University of Chicago's Law Review - articles which are often referenced and footnoted in high court decisions - carries little weight while private institutes define settled law is ... well ... there's not even a way to describe it.

You sound pretty illiterate, for a lawyer. I wouldn't advertise that fact in public.

1) Stare decisis = 'the decision remains.' It is the fundamental guiding principle of common law systems (to which the US belongs).

2) I'd like you to show me one MAJOR court decision (that hasn't been thrown out on its butt) -- with the exception of the Paramount decision (look it up) which delimited Dodge v. Ford somewhat to make a distinction between short-term versus long-term shareholder value creation (the Delaware court, correctly, favored the latter) -- that goes directly against Dodge v. Ford. If you can't, you should just quietly move along.

3) It is shocking to me that, as a lawyer, you had no clue about RMBCA or, more importantly, ALI. That reveals your ignorance in spades.

4) Here's a suggestion for you. Buy a copy of the Corporate Director's Guidebook (it's not expensive), read it (it is a very short read), and then come back and post about the fiduciary duties of an officer/director of a corporation in the US.

What kind of lawyer are you? Where did you get your degree!?

As to published articles in leading law reviews (and I grant, Univ of Chicago LR is as good as it gets), I can I assure you -- without revealing too much more, since I am loathe to reveal much about myself in these forums that rely on anonymity so much -- that you'd be impressed with the citations I can give you. On this topic. But you'd have to PM me.
Edited by anantksundaram - 2/8/13 at 9:54am
post #165 of 175

When Hedge Fund managers do something other than move money around, I may actually care what they have to say.  

 

Anyways, Einhorn must have better things to do, like take over some promising new American company and manage it into the ground.

post #166 of 175
Quote:
Originally Posted by Junkyard Dawg View Post

Anyways, Einhorn must have better things to do, like take over some promising new American company and manage it into the ground.

That is indeed what I read on Wikipedia. Quite pathetic, to profit from someone else's misfortune, that he inflicts upon them. Over here in NL we have a so called news reporter / investigator who goes through devious ways to film people that are suspect of wrongdoing. True or false, he makes money selling his tapes to broadcasting companies, all because of the misery of others. Really uncool, unprofessional and downright pathetic.
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post #167 of 175
Quote:
Originally Posted by sip View Post

 

Apple is spending a lot of money on capital projects: new "spaceship" HQ; servers farms; green power plants.

 

Also, nearly half of Apple's billions sit in overseas banks because the US-IRS wants 35% of it if it is ever brought into the USA. It doesn't matter how much money Apple has, what is important is where it is located. So how can Apple's US-based cash be regarded as "excessive retained earnings" and how does it slow economic growth?

 

What is excessive is something the IRS is probably debating internally. That's the 64K question, right? Do they need 300B or 400B? At what point is it excessive. They can build the spaceship building and plenty of RAM with what they have now. I'm not making that judgment, just posing the question.

 

How does it slow economic growth? Whatever portion of cash companies hang on to, whether overseas or not, is not being utilized as effectively as it might. If most corporations go into this defensive mode (like, say, due to a horrible economy and distaste for risk), it creates a drag on growth. Imagine the 100s of billions being used to hire employees, build stuff, invest in new plants and equipment or R&D, etc.

 

In Japan, they have this very problem. Only, it's not with corporations. It's with their own people, who tend to save money. Economic growth flows from spending and as great as saving is, if everybody does it, it's not a good thing for GDP. Our corps. are sitting on a lot of cash. No one is making bold moves, though I'd exempt Apple from that, generally.

post #168 of 175
Quote:
Originally Posted by RobM View Post

http://en.wikipedia.org/wiki/David_Einhorn_(hedge_fund_manager)

 

imo, He's making a play. On one hand he's talking himself up by seeming to speak on behalf of AAPL shareholders and what benefit his wizard scheme could do for them. OTOH Greenlight Capital is suing in a move to - what ? Discredit the BOD ? Add more disruptive comment ? Talk the share price down further ?

 

I'd trust him about as far as I could throw him - he's got a plan with eyes firmly set on some that cash, that's for sure.

Gotta watch out for the Tall Poppy thing Einhorn ....

nice website, btw lol

https://www.greenlightcapital.com/

http://foolingsomepeople.com/main/

 

Not the first time this "white knight" gets in trouble for manipulating (and killing) stock.

His book even goes so far as saying that he's right and the SEC wrong...

Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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post #169 of 175
Quote:
Originally Posted by PhilBoogie View Post


 unprofessional

I beg to disagree with that word only in your statement. The rest, I entirely suscribe to. However, his business is making money through the misery of others, and he's being very professional about it.

Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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post #170 of 175
Quote:
Originally Posted by anantksundaram View Post

4) Here's a suggestion for you. Buy a copy of the Corporate Director's Guidebook (it's not expensive), read it (it is a very short read), and then come back and post about the fiduciary duties of an officer/director of a corporation in the US.
 

Hey, I'll take that read.Thanks for that suggestion!

Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

Reply

Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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post #171 of 175
Quote:
Originally Posted by sip View Post

 

Apple is spending a lot of money on capital projects: new "spaceship" HQ; servers farms; green power plants.

 

Also, nearly half of Apple's billions sit in overseas banks because the US-IRS wants 35% of it if it is ever brought into the USA. It doesn't matter how much money Apple has, what is important is where it is located. So how can Apple's US-based cash be regarded as "excessive retained earnings" and how does it slow economic growth?

If it's all about spending money, they should invest in fusion research. If it works out, it's definitely in the interest of shareholders. If it fails, not Apple's fault, and they did not cause horrible suffering to anguished shareholders watching terrible piles of cash growing...

Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

Reply

Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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post #172 of 175
Quote:
Originally Posted by focher View Post

No, I think YOU should read up on those things then understand the definition of "fiduciary duty". Internet armchair lawyers are always worth exactly what you pay them. First, a Michigan state court ruling means exactly that ... Michigan. Second, some independent organization that says what it thinks the principles of corporate governance should be means exactly that. Nothing.

 

Actually, there is a set of investors who are interested in having their money grow slowly but surely. Good governance is therefore making secure steps, keeping massive stockpiles of cash in case of bad economy/swift revolution in the market. 

 

Imagine what Nokia would have done if it had had that much cash when iPhone came out. Yeah, not "died due to Microsoft 'helping' them".

 

As an investor, I'm utterly uninterested in big companies taking huge risks and possibly generating gigantic amounts of cash, or possibly losing all my money. If I wanted that, I'd invest in startups.

Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

Reply

Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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post #173 of 175
Quote:
Originally Posted by lightknight View Post

Actually, there is a set of investors who are interested in having their money grow slowly but surely. Good governance is therefore making secure steps, keeping massive stockpiles of cash in case of bad economy/swift revolution in the market. 

 

Imagine what Nokia would have done if it had had that much cash when iPhone came out. Yeah, not "died due to Microsoft 'helping' them".

 

As an investor, I'm utterly uninterested in big companies taking huge risks and possibly generating gigantic amounts of cash, or possibly losing all my money. If I wanted that, I'd invest in startups.

Here's a link to a pretty detailed description of just what's being claimed in the lawsuit, whether there's any chance of it being successful, and how some large investors see it. A very good article for our members with significant Apple holdings

 

http://www.reuters.com/article/2013/02/09/us-apple-greenlight-lawsuit-idUSBRE91713S20130209

melior diabolus quem scies
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melior diabolus quem scies
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post #174 of 175

Interesting article thanks !

On one hand he's having a go at the BOD with Proposal 2. and then otoh he tries to takes issue with the BOD's investment policy which of course is totally unrelated.

Imo - Prposal 2 is for Apple shareholders and the BOD to decide. The investment policy decisions made by Apple BOD is their business and not open to legal or public debate.

Drop the case Einhorn - explain to your investors how you got caught short.

Go take your wife to another fundraiser or something !


Edited by RobM - 2/11/13 at 9:37pm
post #175 of 175
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