Apple might be headed back to court as investors sue
Apple is notorious for hoarding away cash as a way to "keep their options open." However, as stocks begin to slip, investors are asking for larger cash amounts.
With its annual meeting looming and its stock on the decline, Apple is facing a rebellion from an influential investor who wants the company to stop stockpiling cash and give it to shareholders instead.
Greenlight Capital said Thursday that it is suing Apple in a New York federal court over the company's proposal to make it more difficult for it to issue preferred stock. David Einhorn, who heads the investment fund, said the proposal would close down one avenue for Apple to reward shareholders with more cash.
Apple is still the world's most valuable company, but its stock has lost 35 percent of its value since September, as it's become obvious that its once-rapid growth has slowed down. The company is fabulously profitable, and Wall Street wants the company to share more of that money with its shareholders rather than tucking it away in low-yielding bank accounts.
"Apple has $145 per share of cash on its balance sheet. As a shareholder, this is your money," Einhorn said in a letter to the company. He has a history of criticizing companies publicly, often after shorting their stocks.
In a statement Thursday, Apple said its management and board continue "active discussions" about what to do with the money, and it will take Einhorn's proposal into consideration.
Its $137 billion in cash makes up nearly a third of Apple's stock market value. Shares of the Cupertino, Calif., company traded at $456.95 in the late afternoon, up $2.25, or 0.5 percent, from Wednesday's close.