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Greenlight Capital drops lawsuit against Apple over $137B cash reserves

post #1 of 50
Thread Starter 
After making waves with a lawsuit and public push for Apple to issue preferred stock, Greenlight Capital withdrew its complaint from court on Friday.

David Einhorn's hedge fund officially dropped its lawsuit following this week's annual shareholder meeting. Apple Chief Executive Tim Cook had dismissed the suit as a "silly sideshow."

Greenlight


"I find it bizarre we find ourselves being sued for doing something that's good for shareholders," Cook said of the lawsuit.

Last month, Greenlight Capital sued Apple and accused the company of having a "problem" with hoarding cash. Einhorn and his fund argued that the company was accruing cash in a manner that hurts investors.David Einhorn of Greenlight Capital believes Apple should return more cash to investors, but Apple CEO Tim Cook dismissed Greenlight's lawsuit as a "silly sideshow."

The lawsuit took specific issue with Proposal 2, an item that was on Apple's shareholder meeting agenda that would have restricted the issuance of preferred stock. The item was eventually pulled from the agenda after a court sided with Greenlight Capital.

Last week, ahead of Apple's shareholder meeting, Einhorn held a conference call with investors and the media where he pushed for Apple to adopt his "iPref" preferred share plan. He believes Apple should offer preferred shares with a dividend of 50 cents per quarter as a use for the company's $137 cash pile.

The lawsuit was dropped on Friday as Apple's stock price reached its lowest point in more than a year. The last time AAPL shares traded below $435 was in January of 2012.
post #2 of 50
I hope this is the last time we hear from Einhorn.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #3 of 50
What's the matter knobs? Your stunk fail to stop the drop? AND maybe is adding to it? Numbnuts. YOU invest the money - let them run the company.
post #4 of 50
Originally Posted by AppleInsider View Post
"I find it bizarre we find ourselves being sued for doing something that's good for shareholders," Cook said of the lawsuit.

 

That's the nice way of saying, 'WALL STREET, YOU UNIMAGINABLE WHORES; WHAT GIVES YOU THE RIGHT?!"

 

It's also a great Cook comment, simple and wry.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply
post #5 of 50

http://dealbook.nytimes.com/2012/01/25/british-regulator-fines-einhorn-in-insider-trading-case/

 

Maybe Einhorn needs the money to pay off this:

 

Greenlight Capital to Pay $11 Million Fine in Insider Case

post #6 of 50

This lawsuit was just a sideshow to begin with, that much is true.

 

I picked up some more AAPL a few days ago, but luckily for me, I dumped it again before today.

 

I'm just waiting to see where the bottom is at, and I see zero signs of anything positive.

post #7 of 50
Quote:
Originally Posted by pfisher View Post

http://dealbook.nytimes.com/2012/01/25/british-regulator-fines-einhorn-in-insider-trading-case/

Maybe Einhorn needs the money to pay off this:

Greenlight Capital to Pay $11 Million Fine in Insider Case



My favorite line:
"This resembles insider dealing the way that soccer resembles football"

Well, let's work this through. Soccer is the same thing as football in most of the world, including the UK where this fine was levied. So, essentially, he's admitting to Insider trading.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #8 of 50

I read that Einhorn owns 1,307,006 shares of AAPL, bought at an average price of $577.16.

 

That's $ 754,142,462.

 

Today, that's worth about $ 567,240,604.

 

The dude is down about 187 Million.1eek.gif

post #9 of 50

All the negative AI comments finally got to him!  s/
 

post #10 of 50
Apple really has to think of something investor-related to turn around the incredibly negative sentiment. It's easy to blame Wall Street, but the management's sheer inarticulateness is distressing. It's like they've been hit squarely between the eyes and are still in a state of shock.
post #11 of 50
Originally Posted by anantksundaram View Post
Apple really has to think of something investor-related to turn around the incredibly negative sentiment.

 

Dividend.


…the management's sheer inarticulateness is distressing.

 

"We just made more money than we ever have, have more desirable and highly-rated products than ever in our past, and have more cash on hand than most of the countries on Earth. Get over it."

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply
post #12 of 50
Quote:
Originally Posted by anantksundaram View Post

Apple really has to think of something investor-related to turn around the incredibly negative sentiment. It's easy to blame Wall Street, but the management's sheer inarticulateness is distressing. It's like they've been hit squarely between the eyes and are still in a state of shock.


Wait until the 3rd week of April.

 

We'll need paddles for AAPL.

 

... meanwhile... Einhorn wonders why the IRA has suddenly become even more interested in him.  1wink.gif

na na na na na...
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na na na na na...
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post #13 of 50
Originally Posted by AppleInsider View Post

... Greenlight Capital sued Apple and accused the company of having a "problem" with hoarding cash ...

 

Headline grab?

Wall Street Weenie greed?

 

I say both of the above.

Sent from my iPhone Simulator

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Sent from my iPhone Simulator

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post #14 of 50
Quote:
Originally Posted by Tallest Skil View Post

Dividend.

 

Yes, what a genius move that was. People were claiming that more hedgefunds and institutions would be buying into AAPL, and the exact opposite happened. Institutional ownership is lower now, post dividend, than it was pre dividend.

 

Also, offering the dividend was like a sign of defeat, since it could be interpreted that Apple is no longer a super growth company and is becoming like an IBM type company, so they offered up a dividend.

post #15 of 50
Quote:
Originally Posted by "Apple 
[" url="/t/156252/greenlight-capital-drops-lawsuit-against-apple-over-137b-cash-reserves#post_2286218"]This lawsuit was just a sideshow to begin with, that much is true.

I picked up some more AAPL a few days ago, but luckily for me, I dumped it again before today.

I'm just waiting to see where the bottom is at, and I see zero signs of anything positive.
Lack of any sign of something positive is something positive for any investor who believes management knows what it is doing. I wish I had some free cash to invest now. The most admired company in America is going for less than 7 times earnings minus cash
post #16 of 50

So this is why the stock is down again toady when the market as a whole is hitting fresh highs?  So damn frustrating.

post #17 of 50
Quote:
Originally Posted by Macnewsjunkie View Post

Lack of any sign of something positive is something positive for any investor who believes management knows what it is doing. I wish I had some free cash to invest now. The most admired company in America is going for less than 7 times earnings minus cash

 

I agree that AAPL is cheap at the moment. Wall Street apparently does not feel the same way, and Apple's fundamentals doesn't really mean much to them.

post #18 of 50
Quote:
Originally Posted by Tallest Skil View Post

Dividend.

Been there done that. All it does it attract more and more value investors like Einhorn. Once they get in, all they want is more dividends, and nonsense like iPrefs (financed with debt, if possible).

 

I've said it a million times before, and I will say it again: for reasons of taxes, non-permanence, not signaling lack of growth opportunities, non-dilutive treasury stock to issue against employee option exercises in the future, share repurchases is the way to go. It's not rocket science.

 

 

Quote:
Originally Posted by Tallest Skil View Post

"We just made more money than we ever have, have more desirable and highly-rated products than ever in our past, and have more cash on hand than most of the countries on Earth. Get over it."

At some point, you'll figure out that what the markets value is not what you did for them yesterday, but what you're able to convince them regarding your future.

post #19 of 50
Quote:
Originally Posted by Rogifan View Post

So this is why the stock is down again toady when the market as a whole is hitting fresh highs?  So damn frustrating.

That is the question that deserves an answer. Only Apple's management can credibly address it. So far, they've failed.

 

My hope is that they have something up their sleeve, and that it shows soon.... if it's just thinner/faster iPads, or cheaper phones, or 15-inch MBAs, or an all-retina line-up, or jazzed-up AppleTV, or OS10.XX, or iOS 6.YY, or larger cloud storage, it won't cut it.

post #20 of 50
Quote:
Originally Posted by Rogifan View Post

So this is why the stock is down again toady when the market as a whole is hitting fresh highs?  So damn frustrating.

 

I have no idea if this is the case or not, it's just a theory that I have, but could it be that there is a limited amount of investment money out there, and if that money is tied up in other stocks at the moment, then there's not much left for investing in Apple, and why would they anyway? Because AAPL is not exactly on the rise lately. 

 

I've noticed often, that when AAPL was riding high last year, certain other stocks were often down. It's almost like the cash flows from one particular stock to another, so it's sort of like an inverse relationship. Like I said, this is just a random thought.

post #21 of 50

They need to do something to stop this relentless slide.  All it's doing is generating more and more negative sentiment which feeds the D&G and FUD all over the web.  Cook might be the best to run Apple operationally but in terms of being the face of the company he sucks.  Every time he speaks the stock drops.  Maybe they need to let Ive or other execs out there more to show people Apple wasn't just a one man show (Jobs) that is screwed without him.  Leaving face of Apple to just Tim Cook isn't working.

post #22 of 50
Quote:
Originally Posted by Apple ][ View Post

 

I have no idea if this is the case or not, it's just a theory that I have, but could it be that there is a limited amount of investment money out there, and if that money is tied up in other stocks at the moment, then there's not much left for investing in Apple, and why would they anyway? Because AAPL is not exactly on the rise lately. 

 

I've noticed often, that when AAPL was riding high last year, certain other stocks were often down. It's almost like the cash flows from one particular stock to another, so it's sort of like an inverse relationship. Like I said, this is just a random thought.

It just seems odd that the Dow, s&p, Nasdaq are all at or near fresh highs while Apple is near a 52-week low.  Down again 1% today but for what reason?

post #23 of 50
Quote:
Originally Posted by Rogifan View Post

It just seems odd that the Dow, s&p, Nasdaq are all at or near fresh highs while Apple is near a 52-week low.  Down again 1% today but for what reason?

It's not just today though, that's been the case for months now.

 

For whatever reason, AAPL has fallen out of favor for the time being at least. It just needs to turn around.

post #24 of 50
Quote:
Originally Posted by Tallest Skil View Post

Dividend.

And how did that work out for the share price last year?
Quote:
Originally Posted by igriv View Post

As was pointed out by someone, the smartphone business is the best business out there right now, and so Cook's comments that they are working on "other kinds of things", or some such, is pretty scary -- it could be perceived as a lack of focus.

It doesn't matter what Apple does - the whiners will put them down.

If they stick to smartphones, they're criticized for not diversifying. If they expand outside of smartphones, they're criticized for lack of focus.

If they lower prices, they're criticized for reducing margins. If they don't lower prices, they're criticized for not caring about the developing markets.

If they don't give dividends, they're criticized for hoarding their money. If they do give dividends, they're criticized for not creating preferred shares - so some people can get more benefit than others.

There's not a blasted thing Apple could do that would make everyone happy.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #25 of 50
Quote:
Originally Posted by igriv View Post

 

As was pointed out by someone, the smartphone business is the best business out there right now, and so Cook's comments that they are working on "other kinds of things", or some such, is pretty scary -- it could be perceived as a lack of focus.

I don't think that comment is scary at all. It's not like Apple is abandoning the mobile phone business.

 

A huge company like Apple should be working on "other kinds of things". I want to see Apple branch out, I want to see Apple release great new gadgets and devices that nobody here thought about. I want Apple to surprise people. I want Apple to surprise me. They certainly have the resources, so just bring it on! 

 

Instead of letting the douchebags control the narrative, which contributes to the overall negative sentiment, Apple needs to take charge, IMO. Actions speak louder than words, and I'm hoping that Apple surprises all of us soon.

post #26 of 50
Quote:
Originally Posted by anantksundaram View Post

That is the question that deserves an answer. Only Apple's management can credibly address it. So far, they've failed.

 

My hope is that they have something up their sleeve, and that it shows soon.... if it's just thinner/faster iPads, or cheaper phones, or 15-inch MBAs, or an all-retina line-up, or jazzed-up AppleTV, or OS10.XX, or iOS 6.YY, or larger cloud storage, it won't cut it.

This is where I think the Jobs era policy of secrecy is hurting Apple.  Realistically we might not see any new stuff until WWDC.  These days silence is equated to being out of ideas.  Jony Ive does a 5 minute segment on a UK children's TV show and it lights up my twitter feed with all kinds of positive comments.  Maybe Apple needs to ease up a bit on the secrecy or let the SVPs off their leash. Give Ive or one of the other SVPs to The Verge for an exclusive.  Something, anything that might  generate some good PR.

post #27 of 50
Quote:
Originally Posted by igriv View Post

......Cook's comments that they are working on "other kinds of things", or some such, is pretty scary -- it could be perceived as a lack of focus.

'Lack of focus' has never been Apple's problem since the second coming of Jobs.

 

I doubt very much that you -- or I -- are in any position to provide advice on its product strategy.

 

(Edit: Corrected typo).

post #28 of 50
Quote:
Originally Posted by igriv View Post
..... before competition caught up, and today the HTC One has much higher pixel density than any Apple .....

And how is HTC doing?

post #29 of 50
Quote:
Originally Posted by igriv View Post

HTC is having its lunch mostly eaten by Samsung -- another sign of how competitive the industry is.

So you're saying that pixel density is not the issue.

post #30 of 50
Quote:
Originally Posted by igriv View Post

I certainly claim no particular wisdom in product strategy, but notice that we are now in the period after the second (and presumably last) GOING of Jobs, and a case can be made (and apparently is being made by Mr Market) that the company seems to be on inertial guidance.

You certainly haven't made the case. You've simply asserted that "lack of focus" is a problem.

What do you mean by "...presumably last GOING...."?1confused.gif (If it was an attempt that humor, sorry that I seem to be missing hit).

post #31 of 50
Originally Posted by anantksundaram View Post

At some point, you'll figure out that what the markets value is not what you did for them yesterday, but what you're able to convince them regarding your future.

 

Is "Hmm, for roughly ten years this company has consistently broken its sales, revenue, and profit records while continuing to provide unparalleled customer support and satisfaction and a slew of desirable new products. Therefore I would predict that this trend continues, given that they haven't changed up their formula for doing so." not a valid belief? What idiocy must one believe to discount this as a valid belief?


Originally Posted by igriv View Post
To which the nice response is: we own the company, and we would like our views to be represented, and you, Tim, are hired help.

 

Ha! That's great. You may own it, but you don't know squat about running it. Apple would have been bankrupt five years ago if they had listened to any of the idiotic product suggestions of some of its shareholders.


Originally Posted by igriv View Post
…how competitive the industry is.

 

*snort* The copyist industry, sure.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply
post #32 of 50

Perhaps Apple should countersue?

 

At any rate, if AAPL keeps getting such negative pressure as it's getting right now, it will be a great time to pick up more. Woe unto those who bought at the peak.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

Reply
post #33 of 50
Quote:
Originally Posted by igriv View Post

 

Read the article:

 

 

“This was inside information, and Einhorn should have appreciated this,” the regulator said in a statement.

Yet the regulator also said that Mr. Einhorn’s “market abuse” was inadvertent and unintentional because he did not believe that he had been given any inside information.

“However, this was not a reasonable belief,” it said.

 

"Honest your honour I did not believe sticking that knife in his back 47 times would kill him."

 

Therefore the murder was inadvertent and unintentional.

 

Justice is weird.

Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
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Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
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post #34 of 50
Quote:
Originally Posted by igriv View Post

 

I am saying that pixel density helped Apple's sales for a while, and now it does not, since everybody has caught up. Apple was, understandably, loath to have people actually beat them to the punch, and still are, with whatever innovation is coming next.

 

I thought is was because they don't have a USB port, NFC or dozens of other "essential" smartphone features.

Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
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Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
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post #35 of 50

They are dropping it because Apple has listened to their demands.

 

There were side hand deals that the public will never know.
 

"Like I said before, share price will dip into the $400."  - 11/21/12 by Galbi

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"Like I said before, share price will dip into the $400."  - 11/21/12 by Galbi

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post #36 of 50
Gordon Gekko got his A** Kicked!
post #37 of 50
Quote:
Originally Posted by AppleInsider View Post

Last month, Greenlight Capital sued Apple and accused the company of having a "problem" with hoarding cash. Einhorn and his fund argued that the company was accruing cash in a manner that hurts investors.David Einhorn of Greenlight Capital believes Apple should return more cash to investors, but Apple CEO Tim Cook dismissed Greenlight's lawsuit as a "silly sideshow."

 

Can I sue Bill Gates for being too rich?

An Apple man since 1977
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An Apple man since 1977
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post #38 of 50
Quote:
Originally Posted by igriv View Post

To which the nice response is: we own the company, and we would like our views to be represented, and you, Tim, are hired help.

To which the nice rebuttal is: the CEO is not an overpaid "yes man." As Steve Jobs wisely said unto Tim, "Do what you think is right. Do not ask yourself 'what would Steve have done?'."

Shareholders do not have the skills or nor vision to manage and lead a company. CEOs have these skills, and are highly paid for it. They are most certainly not "hired help."

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #39 of 50
Quote:
Originally Posted by igriv View Post

 

The CEO is not a yes man, he is, as you say, a person with skills to lead the company, hired BY the shareholders for the purpose. The shareholders do not surrender all authority to the CEO, far from it -- the function of the board is to provide the managementguidance, and to dump themanagement if its work is not satisfactory. The board is (at least in theory) a set of elected (by share count) representatives of the shareholders, so we come back again to the realization that the shareholders have the right and the obligation to provide guidance to the company.

 

The board does not "provide the managementguidance". Nor do shareholders.

 

You are confusing the chain of accountability with chain of leadership. Leadership stops at the CEO. Accountability goes up through the board and back to shareholders. What you call "guidance" (determining what the company will do with its resources) is a function of leadership. Leadership is a job skill required by management, and the top manager is CEO. Leadership ends there. The board's job to is make the CEO accountable for providing effective leadership. Leadership is not the board's job, because the board delegates that responsibility to the senior management.

 

While the board oversees corporate governance, that is the very framework of rules and policies that govern both the board members and senior management. For example, stating who is accountable to whom is described in the governance guides. Apple's governance rules (which are typical for US corporations) gives the CEO (and not the board) authority to (1) lead and (2) speak for the company. Governance recognizes no higher authority with respect to leadership of the corporation.

 

As for whether the board members "represent the views of the shareholders" is something that is entirely up to the shareholders, since that may or may not factor in when they vote on reelecting board members. However, the views of the board members and the views of the shareholders are irrelevant because Apple's governance policy give Tim Cook the final authority to speak for Apple. Further, it does not require Tim Cook to heed the personal views of any board member or shareholder; he merely has the autonomy to choose to do that.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #40 of 50

igriv, I am not going to thank Einhorn.

I thought his tactic of using the court case to promote his idea was shameful, cynical and despicable.

His timing made it worse for Apple.

He probably calls it smart.

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