SAN FRANCISCO – Apple CEO Tim Cook on Tuesday dismissed complaints from activist shareholder David Einhorn that the company has a “Depression-era” attitude about hoarding cash, called his lawsuit challenging a proxy that would limit the ability to create a special class of stock “a silly sideshow” and said his engineers have not lost their innovative edge.
Speaking at a Goldman Sachs technology conference, Cook reiterated Apple’s stand that it is seriously looking at whether to return more cash to shareholders as its cash stockpile grew to $137 billion as of the end of the December quarter, roughly two-thirds of which is held overseas.
“Apple doesn’t have a Depression-era mentality,” he said. “Apple makes bold and ambitious bets on products, and we are conservative financially.”
Cook called the lawsuit filed by Einhorn’s hedge fund, Greenlight Capital, a “misunderstanding” and said if Apple were ever to issue preferred stock – which Einhorn is calling for – the company would first seek shareholder approval. Last year, the Cupertino, Calif., company announced its first quarterly dividend since 1995 – $2.65 a share beginning in August – as shareholders called on Apple to reward investors with a slice of its cash.
Greenlight Capital’s suit seeks to halt a company-sponsored proxy proposal that would eliminate “blank check” preferred stock; the proposal is scheduled to be voted on during Apple’s annual shareholder meeting on Feb. 27.
“Now, we do have some cash,” Cook said, “but it’s a privilege to be in this position. Last quarter, cash flow from operations for Apple was over $23 billion. It’s an incredible privilege for us to be in this position that we can seriously consider returning additional cash to shareholders.”
The company spent $10 billion on capital expenditures last year and will likely do the same this year, Cook said. Apple will not buy large companies simply to increase revenue, he added.
Apple’s stock price has plunged some 35 percent in recent months, which some critics attribute to increasing competition from competitors such as Samsung and Google in the smartphone and tablet markets.
Cook noted that the current smartphone market of 700 million units sold every year globally, which Apple kick-started with the introduction of the iPhone in 2007, is expected to double to an annual market of 1.4 billion in four years.
JOIN THE DISCUSSION | Register here
We welcome comments. Please keep them civil, short and to the point. ALL CAPS, spam, obscene, profane, abusive and off topic comments will be deleted. Repeat offenders will be blocked. Thanks for taking part — and abiding by these simple rules. A thorough explanation of rules of conduct can be found in our Terms of Service. If you have any questions, including why your comment may not be showing immediately after you submit it, be sure to visit the commenting FAQ.