Tuesday, 1 October 2013

Icahn Cooks a Deal with Apple



Large tech companies often hold billions of dollars in liquid cash reserves, which sometimes attract unwarranted attention from activist investors who have their own ideas on how these funds can best be utilized.


Apple Inc. (AAPL) found itself in a similar situation earlier this year when Greenlight Capital Founder and President David Einhorn filed a lawsuit against Apple for refusing to issue 4% perpetual dividend paying preferred shares.

Einhorn eventually dropped the lawsuit, but investors have since started pushing Apple utilize its reserves for the benefit of shareholders. Apple CEO Tim Cook, who is on record for dismissing Einhorn’s lawsuit as “silly”, may be buckling under the pressure. In a recent shareholders’ meeting, he said that the company is ‘seriously considering’ returning cash to shareholders. Read more.