Apple CEO says lawsuit is 'silly sideshow'
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 waste money by mailing 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.
Repeating previous statements, Cook also said that the company is “seriously” looking at ways to hand out more cash to shareholders.
Investors appeared to be listening for something more substantive out of Cook on Tuesday in his morning speech at a Goldman Sachs investor conference in San Francisco. Apple's stock fell $12.09 to close at $467.84 at the end of the day.
The stock market has hammered Apple's stock since the September debut 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 clamoring for Apple to share more of its cash, which amounts 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 rebuted that assertion on 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.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Stocks finish weak before Thanksgiving holiday; energy firms give back some gains
- Union leaders warn Post-Gazette newsroom of possible layoffs
- Covestro leader MacCleary finds stability amid change
- Black Friday loosens its hold on the holiday season
- German financial giant Allianz SE slashes coal investments
- Pa. PUC looks to update safety rules for electric utilities
- Powder metals fabricator Atlas Pressed Metals diversifies appeal to customers
- Mall stores required to open for Thanksgiving
- Stocks shake off Middle East tensions, drop in consumer confidence
- Feds upgrade GDP’s growth
- Pa. unemployment rate dips to 5.1% for October