Apple Releases Statement on Greenlight Capital Cash Proposal

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Earlier today Greenlight Capital urged Apple to return more of its $137 billion cash war chest back to investors, with president and co-founder David Einhor saying “Apple must examine all of its options to unlock the growing value of its balance sheet for all shareholders.”

In response, Apple has just pushed a response to Greenlight Capital and the latter’s lawsuit via press release to say it will “evaluate Greenlight Capital’s current proposal to issue some form of preferred stock”:

CUPERTINO, Calif.–(BUSINESS WIRE)–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.

Apple’s management team and Board of Directors have been in active discussions about returning additional cash to shareholders. As part of our review, we will thoroughly evaluate Greenlight Capital’s current proposal to issue some form of preferred stock. We welcome Greenlight’s views and the views of all of our shareholders.

As a part of our efforts to further enhance corporate governance and serve our shareholders’ best interests, Proposal #2 in our proxy includes some recommended changes to our articles of incorporation. These changes were recommended independently of Greenlight’s proposal and would not preclude Apple from adopting their concept. Contrary to Greenlight’s statements, adoption of Proposal #2 would not prevent the issuance of preferred stock. Currently, Apple’s articles of incorporation provide for the issuance of “blank check” preferred stock by the Board of Directors without shareholder approval. If Proposal #2 is adopted, our shareholders would have the right to approve the issuance of preferred stock. As such, Proposal #2 has the support of many of our shareholders.

We remain committed to having an ongoing dialogue with our shareholders to get perspectives around return of capital and driving shareholder value.

Wall Street sees the notion of Apple and Greenlight Capital discussions as positive news–AAPL is currently up 3%.

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  • gtasscarlo

    Greedy Apple and Greedy greenlight. Or how about Apple moves it manufacturing to America or Canada. How about lowering the prices on items, since there clearly making a massive profit.

  • FragilityG4

    In today’s world who is not greedy? You may say yourself but isn’t greed behind your request for them to lower prices? So you can keep more of your money??
    Besides we live in a part of the world with free enterprise …

  • gtasscarlo

    I am greedy as well. As well if apple has that much reserve capital, they should give it back to the shareholders. I’m just stating that they should do something rather then sit on $137 billion. Don’t you agree?.

  • FragilityG4

    Every company plateaus when it comes to profits. Then there’s regression. And sometimes there’s losses.
    Take a look at the auto sector, Ford stashed some cash while GM lived, for lack of a better term, pay cheque to pay cheque.
    When the credit crunch hit GM was desperate for the bailout while Ford wasn’t as bad.
    My point is its better to prepare for the unknown than spending like the cash won’t stop.
    Can they give back some to shareholders? I suppose so, but thinking about the future is a good thing.
    They have been using that money to open retail stores worldwide, expand database infrastructure, build new campus’ and a lot more. The problem is they make the money faster than they can spend it so it looks like they do nothing.