This morning, Greenlight Capital hedge fund manager David Einhorn filed suit against Apple, demanding that it hand out a portion of its $137 billion to investors. In an interview, Einhorn said that Apple was holding to a “Depression-era” mentality, hoarding cash and only investing in safe, low-yield securities. Greenlight Capital is a major Apple shareholder.
In response, Apple issued a press release saying that the company is actively exploring options for returning additional cash to its shareholders, and that it would “thoroughly evaluate” Greenlight Capital’s proposal to issue some form of preferred stock.
By early last year, Apple’s cash balance had built to a point beyond what we needed to run our business and maintain flexibility to take advantage of strategic opportunities, so we announced a plan to return $45 billion to shareholders over three years. As of next week we will have executed $10 billion of that plan.
We find ourselves 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.
We remain committed to having an ongoing dialogue with our shareholders to get perspectives around return of capital and driving shareholder value.
Apple also mentioned that it had already been discussing ways to return cash to shareholders before Greenlight Capital stepped in.
After the press release hit the Internet, Apple’s stock experienced a huge jump, rising almost three percent. That’s the highest price Apple stock has seen since the company held its first quarter financial call on Jan. 23. Apple’s annual shareholders meeting will take place later this month on Feb. 27.