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Apple's Tim Cook Calls Lawsuit a "Silly Sideshow"

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Apple Chief Executive Tim Cook called the proxy fight with a prominent investor over how it distributes its cash a "silly sideshow."

"Frankly I find it bizarre that we would find ourselves being sued for something that’s good for consumers,” Cook said at a Goldman Sachs technology conference Tuesday. "I think it’s a … it’s a silly sideshow, honestly.” 

Hedge fund manager David Einhorn sued Apple in a New York federal court to stop a proposal for a shareholder vote to Apple's charter before it can issue preferred stock. Einhorn's idea is that "perpetually preferred" stock will yield a higher dividend to shareholders, according to the Wall Street Journal.
 
Despite Einhorn's lawsuit, others including the California Public Employees' Retirement System, support Apple's new proposal. The proposal will stop any issuing of "blank check" preferred stock, something Cook said is good for shareholders. But despite Cook's public views, Apple will not be doing a big campaign to defeat Einhorn's lawsuit, because Cook considers it "a waste of shareholder money, and it’s a distraction, and it’s not a seminal issue for Apple."
 
Apple is already giving $45 billion to shareholders through dividends and buybacks and is looking into other ways to return cash to shareholders and isn't hoarding cash, Cook said. 
 
While Cook didn't confirm Apple making cheaper versions of the iPhone, he did say that Apple is looking into creating more affordable products such as its iPod media players. He also noted that the iPhone 4 is still selling well, likely because it's free with a two-year contract.
 
The Apple chief also sloughed off ideas that its newer devices are "cannibalizing" its other devices. "The truth is, we really don't think about it that much," Cook said. "Our basic belief is, if we don't cannibalize, someone else will."
 
Cook's words should calm shareholders who are following Einhorn in a quest for quick dividend cash. The stock market is becoming an increasingly fast way to make cash, with many investors using algorithms to hold onto shares for only seconds before cashing out. Cook's words don't put those people at ease because it means that Apple is playing the long game and not the short one, but perhaps its enough for its more moderate shareholders.

Related Topics Apple, Tim Cook, Einhorn, shares, dividend
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