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

Posted:
in AAPL Investors edited January 2014
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.
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Comments

  • Reply 1 of 77
    solipsismxsolipsismx Posts: 19,566member
    I hope this is the last time we hear from Einhorn.
  • Reply 2 of 77
    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.
  • Reply 3 of 77
    tallest skiltallest skil Posts: 43,399member


    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.

  • Reply 4 of 77
    pfisherpfisher Posts: 758member


    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

  • Reply 5 of 77
    apple ][apple ][ Posts: 8,360member


    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.

  • Reply 6 of 77
    jragostajragosta Posts: 10,473member
    pfisher wrote: »
    http://dealbook.nytimes.com/2012/01/25/british-regulator-fines-einhorn-in-insider-trading-case/

    Maybe Einhorn needs the money to pay off this:

    <h1 class="entry-title">Greenlight Capital to Pay $11 Million Fine in Insider Case</h1>

    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.
  • Reply 7 of 77


    Tim Cook reminds one of the Emperor Nero of Rome. He watches Rome being burned while playing his violin. The only difference is Mr. Cook is watching Apple capital value disappear and shareholder wealth with it. I wish these techies that are part of the cult on this site would get real!  

  • Reply 8 of 77
    apple ][apple ][ Posts: 8,360member


    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.image


  • Reply 9 of 77


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

     

  • Reply 10 of 77
    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.
  • Reply 11 of 77
    tallest skiltallest skil Posts: 43,399member


    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."

  • Reply 12 of 77

    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.  image

  • Reply 13 of 77
    sockrolidsockrolid Posts: 2,788member


    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.

  • Reply 14 of 77
    apple ][apple ][ Posts: 8,360member

    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.

  • Reply 15 of 77
    "Apple wrote:
    [" 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
  • Reply 16 of 77
    rogifanrogifan Posts: 10,669member


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

  • Reply 17 of 77
    apple ][apple ][ Posts: 8,360member

    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.

  • Reply 18 of 77

    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.

  • Reply 19 of 77

    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.

  • Reply 20 of 77
    apple ][apple ][ Posts: 8,360member

    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.

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