Tim Cook is quite the talker. Just two months ago the Apple Inc. (NASDAQ:AAPL) CEO made the rounds in the media with a pair of interviews with NBC and Bloomberg Businessweek, and this morning he spoke at the Goldman Sachs Group, Inc. (NYSE:GS) Technology and Internet Conference.
Not only is Cook himself more willing to engage with the press than his predecessor, the entire company is more talkative under him. Apple Inc. (NASDAQ:AAPL) surprised investors just last week when it promptly responded to Greenlight Capital’s David Einhorn after the hedge fund star publicly called for the company to issue a share class of perpetual preferreds that yield 4%.
What else did Cook have to say at the conference?
Jumping right in
Goldman Sachs analyst Bill Shope jumped right in and immediately brought up the Einhorn situation with Cook. Einhorn had accused Apple Inc. (NASDAQ:AAPL) of harboring a depression-era mentality that has led to the company hoarding more cash than it could possibly need for a rainy day. Cook dispels this notion by saying Apple simply “makes bold and ambitious bets on products and we’re conservative financially.”
However, Cook does acknowledge that Einhorn’s idea is “creative,” but that the lawsuit that he is bringing against Apple to unbundle a proposal within its proxy is a “waste of shareholder money and a distraction.” Cook has said time and time again that he hates litigation. A recent Reuters report even said he was against suing Samsung from the get-go, and that’s a case that had significant implications on Apple Inc. (NASDAQ:AAPL)’s intense competition with its South Korean frenemy.
You can only imagine how peeved Cook must be about Einhorn’s suit, especially since it appears that Einhorn’s scorn was misplaced when it comes to the proposal. The whole reason why Einhorn opposes the proposal in question is because it seemingly eliminates Apple’s ability to issue preferred stock. The proposal actually only eliminates the company’s ability to issue preferred stock without shareholder approval; Apple Inc. (NASDAQ:AAPL) will still be able to issue preferred shares if shareholders approved such a move.
Cook adds, “We feel so strongly for Apple that shareholders should approve any issuance of preferred stock.” This is why he called the whole ordeal a “silly sideshow.”
What did you expect?
If investors were specifically looking for some big announcement on a beefier dividend, they were destined to be disappointed. After Cook finished speaking, shares were down by as much as 2.5%, which might indicate some level of investor disappointment.
Regarding the dividend, Cook reiterated what Apple Inc. (NASDAQ:AAPL) said in its statement last week in that the company continues to “actively” discuss returning “additional” cash to shareholders. No surprises there.