The Canadian Press - ONLINE EDITION

Apple CEO Cook says shareholder suit is 'silly sideshow,' still looking at handing out cash

  • Print

Apple CEO Tim Cook is calling a shareholder lawsuit against the company a "silly sideshow," even as he said he is open to looking at the shareholder's proposals for sharing more cash with investors.

Investor David Einhorn sued Apple Inc. last week, saying a proposal slated for a vote at the company's annual meeting in two weeks would make it more difficult to enact his plan to reward shareholders by distributing a new class of shares.

Cook said Apple's proposal puts more power in the hands of shareholders, making it difficult to understand why a shareholder would fight it. Calling the fight a waste of time, Cook said Apple won't squander money by mailing letters to shareholders to persuade them to vote for the proposal.

"My preference is that everyone on both sides of this issue would take the money they're spending on this and donating it to a worthy cause," Cook said.

Apple's proposal asks shareholders to vote on a few governance issues in one go. Einhorn's company, Greenlight Capital, said in a statement that if Apple thinks the suit is waste of resources, "it could simply end the matter by complying with existing law" and let shareholders vote on the contested proposal separately from the other issues.

Cook spoke Tuesday morning at a Goldman Sachs investor conference in San Francisco. Repeating previous statements, he said Apple is "seriously" looking at ways to hand out more cash to shareholders.

Investors appeared to be listening for something more substantive out the CEO on the cash issue. Apple's stock fell $12.03, or 2.5 per cent, to close at $467.90.

The stock market has hammered Apple's stock since the September launch of the iPhone 5. The company's growth, which has been rapid for nearly a decade, is slowing drastically in the absence of a new groundbreaking product. Wall Street is clamouring for Apple to share more of its cash, which amounted to $137 billion at the end of last year and is still growing fast because of the company's massive profits.

Companies normally don't sit on that much cash, as it's not very productive. They prefer to invest it in their business or give it to shareholders. Einhorn said Apple's cash hoard is a symptom of a defensive, "Depression-era mentality."

Cook rebutted that assertion Tuesday, saying the company invested $10 billion in its business last year, through spending on research and design, equipment and an expansion of its chain of stores. It has also committed to handing out $45 billion to shareholders over three years, through dividends and share buybacks.

Analysts, however, point out that Apple seems to have run out of things to invest in, and the $45 billion commitment is small compared with the company's profits.

Goldman analyst Bill Shope asked Cook about two other hot-button issues: whether Apple would make a cheaper phone and one with a larger screen, both of which rivals have been doing using Google's Android operating system. Cook was as usual evasive about Apple's product plans, preferring to point out that it sells older iPhone models at a reduced price and that there's more to the experience of a screen than its size.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Your top TV picks for this weekend - August 22-24

View more like this

Photo Store Gallery

  • Marc Gallant / Winnipeg Free Press.  Local/Weather Standup- Catching rays. Prairie Dog stretches out at Fort Whyte Centre. Fort Whyte has a Prairie Dog enclosure with aprox. 20 dogs young and old. 060607.
  • June 25, 2013 - 130625  -  A storm lit up Winnipeg Tuesday, June 25, 2013. John Woods / Winnipeg Free Press - lightning

View More Gallery Photos

Poll

Did you suffer any damages from Thursday's storm?

View Results

View Related Story

Ads by Google