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back to article Success for Einhorn: Judge blocks vote on Apple's Proposal 2

Hedge-fund manager David Einhorn has scored a technical victory in his fight to block Apple from amending its charter at next week's shareholder meeting. Earlier this month, Einhorn filed his legal suit with another investor, claiming that Apple was showing a "depression era" attitude to money by amassing a cash pile of $137bn …

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Pint

You're hoarding it wrong

Quite proud of that one!

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Anonymous Coward

Re: You're hoarding it wrong

I'll hold it for 'em.

O:-)

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FAIL

California Cool tossed by East Coast Partypoopers

That noise emanating from Jobs box in Alta Mesa Memorial Park, Palo Alto, is most likely the response to East Coast people interfering in his former fiefdom.

Good to know Apple still has to kowtow to some laws.

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Re: California Cool tossed by East Coast Partypoopers

You mean in contrast to his love of all West Coasters, like the employees of Microsoft and Google?

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Anonymous Coward

If you're gonna stuff $137BEEEELION into your mattress, expect a lot of very greedy people to be very interested.

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Pint

greedy people

As you know it's all about taking care of the shareholders (a standard phrase used by every CEO). It took Microsoft a hell of a time before they had to pay dividends. So perhaps "greedy" could be found within Apple too.

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I think it's the combination of having $137bn in reserves and shares that are about a third down from their 52-week high that is probably bring people out of the woodwork. They probably feel either like they're owed a payout for loyalty or that it's worth chancing it anyway.

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Childcatcher

Re: greedy people

I don't feel sorry the investors or Apple. Both are greedy.

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Anonymous Coward

Re: greedy people

Except Apple is a for-profit company, which by its very definition HAS to be greedy. If they're not, the shareholders sue.

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Anonymous Coward

Re: greedy people

Greed is good. Greed works.

GG

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Anonymous Coward

Re: greedy people

What about the investors in Samsung or Google or ?? Philanthropists eh?

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Owners

Those "greedy" people own Apple and its hoard of cash. It's theirs, not Tim Cook's. They should be allowed to ask for it back, and he should not be allowed to hold onto it unless he can show that he knows better how to spend it than they do. The last few years show he doesn't know what to do with it at all.

How many products and patent lawsuits do they have in development which means they require $137000000000 petty cash? Is their cash flow under so much pressure that they need to pay wages from cash reserves? Or is the Apple board just greedy? I suspect their pen1s size is somehow related to the market cap, which would take a large hit if they gave shareholders their money back.

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Re: Owners

Oh rubbish those so called investors are the kind of short termist idiots that wil mean your kids have to learn mandarin to speak to their new bosses, get your head out of your ass!

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Anonymous Coward

Re: greedy people

Google are worse than Apple for greed, out of the top technology companies they use the most tax avoidance schemes and lobby the most.

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JDX
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Great idea. Buy shares. If they go up, clap your self on the back for smart investing. If they go down, blame the company and demand they give you some money.

I've lost money on AAPL but that's the risk I took buying them.

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Actually, by not paying a dividend when they patently could they are directly affecting the share price and as a result not acting in the best interests of the share holder. Einhorn isn't a philanthropist he is a capitalist, he has provided capital for Apple to operate and now he wants his return.

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Trollface

Re: learn mandarin

jeezus what a concept!

Having seen what illiterate merkins have done to a comparatively simple tongue such as english and extrapolating that to Cantonese or Mandarin makes the mind boggle.

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Anonymous Coward

Re: Owners

lol

and your short-termism makes you think they won't be speaking some mandarin anyways.

Rather like now how most of the UK is dropping the U from colour, and adding Z's in peculiar places.

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Re: Owners

Maybe Tim Cook just doesn't want Apple to go the same way as Marconi.

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@ThomH: Aren't they?

" They probably feel either like they're owed a payout for loyalty or that it's worth chancing it anyway."

If they're shareholders, they kinda are owed a payout, aren't they? Aren't "payouts" the very reason why people become shareholders in the first place?

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Re: Owners

"Rather like now how most of the UK is dropping the U from colour, and adding Z's in peculiar places."

I take it you have a reliable reference for that?

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JDX
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Re: @ThomH: Aren't they?

>>If they're shareholders, they kinda are owed a payout, aren't they?

If they'd sold at $700 they would have one. Like I should've done!

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Anonymous Coward

@Naughtyhorse

If there is one person on this forum who should not be calling other people "illiterate" it is you.

PS The word "english" in your post should have been capitalized. English might be "simple" but it's not simple enough for you.

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The theory

Shareholders provide the capital that a company works with to return a profit. Some of this profit is then expected to be returned to shareholders as a return on their investment - either as a dividend, or as higher value for the share if the owner decides to sell it on.

Keeping a large cash reserve - assuming its not an allowance against some future black hole - when it could be used to generate more company revenue or be paid out in dividend must be galling to some investors.

A bit like putting a fiver into the lottery sweepstake at work and finding out only £4 of it went on tickets and the other quid is sitting in a coffee jar "for another day".

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Re: The theory

A significant amount of that large profit is held overseas and is unlikely to be repatriated due to the taxes it would attract.

Shareholders do receive some value from a companies cash reserve, the share price should rise (assuming all other factors remain the same, which they won't) as the slosh fund increases, which is value for the shareholders as the value of their holding will increase.

It might not be the best use of a pile of cash, but it is legitimate. Apple could have decided that there were no decent opportunities to spend it, looking at recent big IT acquisitions there is some sense there (how much value have HP | MS written down lately?).

Apple is sitting sweet, if they need to buy something big they can do so, it shouldn't affect their share price much for those who are long on apple. They were probably banking on a repub win in 2012 and a repatriation holiday for their slush fund. They can keep using portions of it to invest in the supply chain or they can outright buy a supplier if things become grim like the whole samsung situation. Whilst they may be having a legal fight with samsung, apple has the cash to buy somewhere in the region of 70% of samsung if it wanted to, it probably wouldn't have an issue finding the remainder. They could easily buy Sony or LG if they wanted to.

If shareholders as a whole want to do something about it they can, up until now they haven't done anything significant beyond a few whines. Apple has a plan in place for spending some of their US based stockpile.

This is just a few people who were betting on Apple continuing to rise being upset because they got caught with their pants down when the bubble burst.

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Trollface

Re: The theory... the practice

The guy spins the wheel, drops in the ball...

If it comes up red we all go out and get pissed - and pat ourselves on our collective back for being so clever.

If it comes up black, our kids don't get to go to college, and we blame the broker.

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@ graeme leggett

"A bit like putting a fiver into the lottery sweepstake at work and finding out only £4 of it went on tickets and the other quid is sitting in a coffee jar "for another day"."

I would say its more like the sweepstake buying a jackpot winning ticket and the organiser refusing to share out the prize to encourage other punters to join.

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@graeme leggett Re: The theory

"Shareholders provide the capital that a company works with to return a profit. Some of this profit is then expected to be returned to shareholders as a return on their investment - either as a dividend, or as higher value for the share if the owner decides to sell it on."

Well not quite. The mere cachet of owning Apple stock is not what drives their shareprice. The reason the shares go up in price is for the dividend it yields. The dividend or more accurately the expected dividend is what drives the stock price in the first place.

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Anonymous Coward

Hmmm. Has no-one thought of nationalising Apple, along with a few other companies. Given that they seem to be adroit at avoiding taxes anyway, it seems like a valid way of the US government getting their hands on a ton of cash.

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As I said on the other thread...

... Apple should use all that cash to buy Sharp outright.

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Thumb Down

Im not an investor but....

Maybe this is why i am not an investor, but my little understanding of shares is you buy them and get a dividend as a return.

When you invest money you look at where you can invest it, usually the return depends on how easy it is to get back. So a bank offers low interest because you can get the money today.

For shares i am not sure how long it takes to get your money out, but it is usually expected that you get some dividend and the value of the shares rise.

For alot of tech companies they do not seem to offer dividends, so i never put any money in them. The increase in value of the share should be in addition to the dividend, not instead of it.

Having good cash reserves is good, but the claim is correct, storing 137 billion for a rainy day is really just manipulating both the investors, the stock price and company value... get in there SEC and sort it out.

On a separate note, while so many people and companies sit on billions in the bank, merely to stop anyone else having it, isn't it a shame that many people in the world can't afford the price of a cup of coffee each day.

Sure makes me feel that hoarding cash to launch a new iDevice is the best thing for all of us !! Thanks Apple.

(Yes, i know it is how capitalism works, Im not saying give it to the poor, but putting that cash at least into a moving economy has a better effect than sitting on it).

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Re: Im not an investor but....

if you know how capitalism works tell somebody cos its not bloody working at the moment!

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Unhappy

Re: Im not an investor but....

Tom7, your mistake there is in assuming capitalism isn't working. For those at the top of the pile it clearly is. The rest of us are simply resources.

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Coat

Re: Im not an investor but....

You really need to get a clue ... what happens to all those billions in a bank ? They are lent to poor bastards like us so we can buy our houses - so they do end up in the real economy.

"There is place at the top they are telling you still, but first you must learn how to smile as you kill" The other way of describing capitalism.

Investing in the stock exchange, or working for a quoted company is murder.

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Facepalm

Re: For those at the top of the pile it clearly is.

Yes, something is working for those at the top, but is it Capitalism?

Or is it post modern Feudalism?

"The weapons with which the bourgeoisie felled feudalism to the ground are now turned against the bourgeoisie itself." --- The Communist Manifesto

'Wankers of the world....'

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Re: Im not an investor but....

Jeremy,

You espouse a simplistic view of investing, which does not exactly correlate with the truth.

There are two basic kinds of investors,

1) those in it for the short term gain, (aka Wall Street speculators) and

2) those in it for the long haul. Within this type there are two sub groups,

a) those expecting long term appreciation, and

b) those expecting regular cash payments (aka 'dividends').

Guess which group Wall Street backs? If you said those in it for the long haul; then you are in for a serious disappointment. Wall Street brokers make (some of) their money on brokerage commissions. The only way a broker gets a commission is when stock gets sold. Therefore, it is not in the best (financial) interests of Wall Street brokers if people just bought and held. The other way Wall Street types make their money is to buy low, and sell high, i.e. "ride the wave". Some Wall Street types use this as their business model (think "Bain Capital", you know, Mittens former "home"); and they have fucked the little guy over by getting capital gains taxed at a lower rate than ordinary income. "Capital gains" are taxed at a fixed rate (either 15 or 20%, I forget which); and guess what? Capital gains are not subject to Social Security taxes (because they (capital gains) are not considered "wages"). If you are a US citizen, how does it feel to be bent over by Wall Street?

<snark alert>

I mean, who do you expect to pay for all of those outlandish Wall Street ANALysts executive bonuses??

The suckers that buy into Wall Streets exhortations to play "throw the dice" with 401k plans, etc.

PT Barnum said it best. "There is a sucker born every minute."

If you parse the commentary out of Wall Street these days, it is all about current stock market value, which is the exact tact one would expect from someone whose vested interest is in getting investors panicked and cause volatility in a company's stock price. Panicked investors sell stock more quickly that a flock of iSheep can race for the door of the nearest iStore, when Apple comes out with their latest piece of shiny-shiny. Panicked investors allow emotion and FUD (fear, uncertainty and doubt) rule their investment decisions. Also, keep in mind, when Wall Street types gamble, it is with other people's money, they could give a shit if they were on the losing side, it ain't their cash at stake.

</snark alert>

Now, someone who is already retired is more likely a 'type 2b' investor (retirement income producing), as those dividend payments are usually a large proportion of their household income. Someone getting close (10 to 15 years away) to retirement is probably transitioning from a 'type 1' (short term capital appreciation) to a 'type 2a' investor (long term capital appreciation).

Herein lies the problem with publicly held companies, you have stockholders who have differing reasons for owning a company's stock. Pressure by (Loudmouth) Wall Street ANALysts are a distraction to management, they are unable to focus on long term goals, because the loudmouth short term, ride it up into the sky and bailout before it starts nosediving types make the most noise. If sufficient amounts of a company's stock is in the hands of those looking for a fast buck, and they can see to it that you get your ass kicked out of your cushy CEO seat if you cross them, there ain't no winners, except the loudmouths.

Perhaps, you can now more appreciate why Dell is in the process of going private. Once Dell is private, they can tell those loudmouths on Wall Street to go fuck themselves.

Apple is sitting on so much fucking money, they could buy up a few third world countries with their cash hoard. As others have pointed out, much of that cash lies offshore, and if it were to return to America, then the IRS will be waiting. Apple management would rather fuck their stockholders and the taxman by keeping that cash hoard overseas. The only cure is for the stockholders to rise up and demand that Apple's board force Cook to return some cash to the shareholders.

Now, are there ways that could be accomplished without returning cash to US shores? I would like to believe, that with all of those expensive shysters on Apple's payroll, that they could figure out some way to pull that off. So, it seems to me the refusal of Apple management to return cash to the stockholders is it way of giving the stockholders THE FINGER. They would rather sit on that cash hoard, then return some to their stockholders.

Perhaps it is time for Apple's stockholders to give Apple's management its walking papers.

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Vic
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Re: Im not an investor but....

> ride it up into the sky and bailout before it starts nosediving

I'm learning to fly at the moment.

I think many of the large stockholders should do the same...

With an aeroplane, if you pull the stick back, the nose goes up. You start climbing.

Woohoo! We're gainnig height. Keep that nose up. Yeah, we're going up and up.

But no-one is watching the airspeed. And pretty soon, that's dropped below the point at which the wings will still fly. That's a stall. The aircraft starts coming down - rather rapidly in many cases. Pulling on the stick to bring the nose up doesn't do any good - quite the opposite, in fact.

It strikes me that this happens in far too many businesses - the need to generate ever-larger profit figures ends up destroying the long-term viability of the company. If someone would just bring the nose down a bit and les the airspeed build back up, things would fly so much better.

Stalling. It destroyed AF447, it'll destroy Capitalism.

Vic.

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Re: Im not an investor but....

> ride it up into the sky and bailout before it starts nosediving

I'm learning to fly at the moment.

I think many of the large stockholders should do the same...

Just make damn certain your parachute works.

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Meh

The road to large legal fees

is paved with successful injunctions.

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