Feb 12 - Jeffrey Goldfarb talks to Breakingviews columnists about David Einhorn's creative idea for Apple's cash and whether it's the best option for the company's shareholders.
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Never dull moment at apple yes very bad news surface of the possibly do I watch coming. As we record this Tim Cook is on stage out on the West Coast talking about a number of things. Including a proposal from green like capital off founder David Einhorn about a way to maximize the value of the cash. Almost -- 140 billion dollars worth that's on Apple's. Books Richard you're a look at this proposal that David -- and on Friday what he is talking about face and the issuing -- preferred stock which carries a particular coupons a full percent. The idea being you can -- crystallize value in -- sense -- that saying this bit of -- Tesla is worth this much. And then the rest of apple of regular common stock is probably still woods. This much which is pretty much what it is -- -- -- Missing hidden but I would also mean there are so isolated that's the yields. On that on that would be hired him would be afraid to step up -- and right now yeah right but also it's a more concrete instruments as a specific. We're right I think I think one of the things you see that apple -- it's not like the dividend yield is infinitesimal these bullets they're tied for tech companies but he loved it to it doesn't translate into capital value now and she'll cook. Tim Cook at apple and everybody else there is thinking about whether they need to address putting in the rest can especially adding -- it plus a quarter of maybe twenty of those fortunate thing he said and it seems unlikely that they would. Jump immediately to do some English definitely has been as bad sort of. Welcoming our guests what final out of -- I have apparently came out apple came out that we're at the board is actively examining what to do just. Pretty rare news for apple to make a statement like I -- wasn't exactly at the conference today Apple's exit at the bit defensive saying that we don't have this depression or mentality. You know pointed out we have pretty hyperbolic kind of yeah greater than -- exactly saving streak in the basement tied to think that the. If he does seem to mean it would certainly be an official everything you said yet but it seems like he's saying we sort of setting the stage. For some sort of release of cancer cells whether time running dividend or special dividend of some kind played Microsoft has done in the polls for instance. This is unarmed proposal I mean people are calling it creative including apple. But it is as high praise were created a company like apple but. Is it to create a visit to many bells and whistles they are better more effective way to do that yet -- easy just give back cash I mean if he can with what happens and when Microsoft return cash and in 2004 they had about. I think it's fifty billion of cash account should they return thirty billion. Investors and the stock -- -- didn't like if you look at it before the dividend and six months afterwards is about the same level. But he pink about that are returned thirty billion so therefore even the value to investors are using a thirty billion better off you know after after trying to catch investors. So should investors didn't really. Give any values this cash in the balance sheets that thinks that we're tapping to apple and it seems like an easy way to crystallizes it's just get back to them. -- keep an eye on apple of course and Tim -- were remarks today. We've got more breaking news tomorrow.