If you listen to a rising chorus of Apple investors, it seems increasingly clear that Cupertino will soon dance a Wall Street jig and offer either a share-buyback plan or a higher dividend. Either of which would help support the share price, even if neither move seems likely to restore much of the 40% haircut the stock has taken since September.
Yesterday, Bloomberg quoted fund managers at Gamco and Capital Advisors, both of which own Apple shares, saying they expect the company to announce new plans for deploying more of its $137 billion cash hoard in support of investors. Today, Quartz reported that Apple might buy back stock, hike the regular dividend or issue a special dividend as early as this spring, and has retained Goldman Sachs to review its options.
The loudest such investor in recent months, of course, has been David Einhorn of Greenlight Capital. In February, Einhorn proposed that Apple begin issuing what he called “iPrefs” — preferred shares that would pay a guaranteed dividend of 4%. Earlier that month, Einhorn had filed suit against Apple to block a proxy measure that would have complicated the issuance of preferred stock — an apparent slap at his plan.
Einhorn’s lawsuit got people a bit riled up, leading Apple CEO Tim Cook to call it “a waste of money for all involved” and “a silly sideshow” — which slapped the word “silly” all over Einhorn’s advocacy plan for news cycles to come. Quartz’s unnamed sources, however, claim Apple actually found the idea “interesting,” and Einhorn apparently got what he wanted when Apple dropped its proxy measure on the order of a federal judge. In turn, Einhorn dropped his lawsuit against Apple shortly thereafter.
Any formal announcement on cash-to-investors front could come in tandem with a product announcement, though it’s unclear whether a spring announcement might involve
an iPhone 5S, an iPad mini revamp, or both.
Hedge fund drama aside, Apple has been increasingly public about its plans to spread its mounting wealth, including an initiative to return $45 billion to shareholders over three years. “As of next week we will have executed $10 billion of that plan,” the company announced last month. Einhorn’s suit didn’t plant this seed, but it certainly seems to have accelerated its growth.
Lead image courtesy of user 1000 Words at Shutterstock
