Feb 7 - Hedge fund manager David Einhorn is suing Apple - saying the company should give shareholders a bigger piece of its cash pile. Bobbi Rebell reports.
Who says a pile of cash is trouble? Just ask Apple. Right now the giant tech company is wrestling with big time hedge fund manager David Einhorn of Greenlight Capital, who accuses Apple of having a depression-era mentality. He says Apple needs to come up with a better way to reward shareholders, and it's time to stop hoarding its $137 billion pile of cash. Einhorn, who owns less than one percent of Apple, wants the company to issue preferred stock, with a 4 percent yield- as a way to return some of that cash to shareholders. He is urging Apple shareholders to vote against Apple's plan to eliminate preferred stock from its charter - and filed a lawsuit trying to stop the proposal altogether. University of Delaware professor Charles Elson says the lawsuit puts Apple on the spot: SOUNDBITE: CHARLES ELSON, PROFESSOR, UNIVERSITY OF DELAWARE (ENGLISH) SAYING: "I think it's fair to say that by bringing this action there has been and will be attention focused on Apple's cash hoard and what to do about it. There has been discussion about it before but this sort of re-ignites the controversy." It did get Apple's attention- they issued a statement agreeing to consider Einhorn's proposal. Apple even said it's been looking at ways to give some cash back to shareholders. And point out that it has been giving back- saying that as of next week it will have distributed $10 billion of a $45 billion plan to shareholders over a three year period that was previously announced. But that hasn't been enough for shareholders- it rose on Thursday- but Apple stock is down about 35 percent from its mid-September high. David Chalupnik head of equities at Nuveen Asset Management: SOUNDBITE: DAVID CHALUPNIK, HEAD OF EQUITIES AND MANAGING DIRECTOR, NUVEEN ASSET MANAGEMENT (ENGLISH) SAYING: "We probably have a couple more quarters without any real catalyst behind Apple and given that it's so over owned, our opinion is that there could be continued pressure on Apple over the near term." Apple's board meets on February 27th.