Einhorn applauds Apple's capital return moves
Apple didn't embrace the iPrefs proposal put forward by hedge fund honcho David Einhorn, who waged a very public campaign to prod the iconic technology company to return more value to shareholders. But the company did embrace an alternative plan, one that has won favor from Einhorn.
The Cupertino giant has announced it will hike its quarterly dividend to $3.05 a share, a 15 percent increase. It will also buy back shares more aggressively, to the tune of $50 billion more than previously planned. The goal overall is to return $100 billion in cash to stock owners by the end of 2015. To finance some of this activity, the company will take advantage of low rates and tap the debt markets.
"Apple is among the largest dividend payers in the world, with annual payments of about $11 billion," the company said of its increased dividend payout.
"We applaud Apple's decision to borrow money and return excess capital to shareholders, an idea that was off the table only months ago," a Greenlight Capital spokesperson told TheStreet.com. "This positive development represents a more shareholder friendly capital allocation policy and demonstrates the conviction of Apple's management and board in the Company's future."
In the end, the point of Einhorn's battle with Apple seems to have been to raise awareness. No one thought the company would embrace iPrefs outright. But the battle highlighted the agita that has recently fallen on all shareholders. The company really had no choice but to make a definitive statement with an aggressive capital return plan. Einhorn deserves credit for doing his part.
- here's the article