Apple under attack over excess cash

08 Feb 13

Apple has released an official statement just before the close of play in the American stock market today, addressing it's huge cash pile following a US$137 billion lawsuit claim.

The company was responding to David Einhorn, the fund manager behind Greenlight Capital, who outlined a proposal for Apple to issue preferred stock as a way of leveraging its cash.

Urging investors to vote NO on an Apple proposal to prevent the issuance of preferred stock, with many believing the company to be accumulating a wealth of cash which isn't properly valued in the market.

"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," Apple said.

"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."

The company claims management and board of directors have been in discussions about returning additional cash to shareholders, as Einhorn argues shareholders deserve a bigger share of the company's growing cash hoard.

"As part of our review, we will thoroughly evaluate Greenlight Capital’s current proposal to issue some form of preferred stock," Apple said.

"We welcome Greenlight’s views and the views of all of our shareholders."

With the company's annual shareholder meeting scheduled for February 27, Einhorn is urging investors to reject Apple's proposal, believing the shares to be "utterly misvalued."

"We understand that many of our fellow shareholders share our frustration with Apple's allocation policies," Einhorn said.

"Apple has $145 per share of cash on its balance sheet. As a shareholder, this is your money."

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