Repeating previous statements, Cook also said that the company is “seriously” looking at ways to hand out more cash to shareholders.
Investors appeared to be listening for something more substantive out of Cook on the cash issue. Apple Inc. (NASDAQ:AAPL)’s stock fell $9.80, or 2 percent, to $470.13 in midday trading after his speech at a Goldman Sachs Group, Inc. (NYSE:GS) investor conference in San Francisco.
The stock market has hammered Apple’s stock since the September launch of the iPhone 5. The company’s growth, which has been rapid for nearly a decade, is slowing drastically in the absence of a new groundbreaking product. Wall Street is clamoring for Apple Inc. (NASDAQ:AAPL) to share more of its cash, which amounted to $137 billion at the end of last year and is still growing fast because of the company’s massive profits.
Companies normally don’t sit on that much cash, as it’s not very productive. They prefer to invest it in their business or give it to shareholders. Einhorn said Apple’s cash hoard is a symptom of a defensive, “Depression-era mentality.”
Cook rebutted that assertion Tuesday, saying the company invested $10 billion in its business last year, through spending on research and design, equipment and an expansion of its chain of stores. It has also committed to handing out $45 billion to shareholders over three years, through dividends and share buybacks.
Analysts, however, point out that Apple seems to have run out of things to invest in, and the $45 billion commitment is small compared with the company’s profits.
Goldman analyst Bill Shope asked Cook about two other hot-button issues: whether Apple would make a cheaper phone and one with a larger screen, both of which rivals have been doing using Google Inc (NASDAQ:GOOG)‘s Android operating system. Cook was as usual evasive about Apple’s product plans, preferring to point out that it sells older iPhone models at a reduced price and that there’s more to the experience of a screen than its size.
The article Apple CEO: Shareholder Lawsuit Is “Silly Sideshow” originally appeared on Fool.com and is written by Associated Press.
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