Apple CEO Dismisses Shareholder Lawsuit as 'Sideshow'

By David Radd

Posted February 20, 2013



Apple CEO Tim Cook says that company is considering David Einhorn's proposal to return more cash to investors, though he called the investor's lawsuit a "silly sideshow." Cook says the board is in "very active discussions" on how to dole out more of its $137 billion hoard of cash and marketable securities.

"This is a waste of shareholder money and a distraction, and not a seminal issue for Apple. That said, I support Prop 2,” said Cook over the proposal that would eliminate the company's ability to issue preferred stock at its discretion. “I am personally going to vote for it."

"If Apple thinks the lawsuit is a waste of resources, it could simply end the matter by complying with existing law and filing a new proxy that unbundles the proposed changes to the charter, so that shareholders can express their views on each matter separately," a Greenlight Capital spokesman said in an emailed statement.

Still, Apple is living with the reality that its stock has lost roughly a third of its value since September 2012. "The only thing that would substantially move the stock would be him saying they were returning cash to shareholders or hinting at a new product," said a manager from a mid-size Dallas hedge fund that owns Apple shares. "There was a small chance of that happening."

Apple says that it could use the capital and flexibility to do a major acquisition, though none passed its internal test. "We have the management talent and depth to do it," said Cook. "We don't feel the pressure to go out and acquire revenue."

Cook also disputed at the event that the smartphone market in developed markets may be saturated. "On a longer-term basis, all phones will be smartphones and there's a lot more people in the world than 1.4 billion, and people love to upgrade their phones very regularly," he said.

On a lighter note, Cook said that when he is down, he just visits an Apple retail store. "It's like Prozac. It's a feeling like no other,” he said.

Source: Reuters





 


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