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Apple Dividends Battle: Investor David Einhorn Attempts To Force Tim Cook To Give Shareholders Slice Of $137 Billion Cash Pile

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Apple has amassed an absolutely huge pile of cash since the iPhone and iPad transformed the scale of its business - and its share price.

In fact the company now has more than $137 billion in the bank, including short and long term investments - roughly a third of its current market value. And that figure is growing all the time - since March last year alone it's increased $39 billion.

But now the company is being pushed by one activist shareholder who says it's time for the company to open the purse strings a little more.

David Einhorn, a New York-based hedge fund manager and the head of Green Light Capital, is attempting to force Apple to give back cash to shareholders.

He is asking the company to stop them eliminating 'preferred' shares, which Apple wants to do at its annual shareholder meeting on 27 February.

Preferred shares pay larger dividends, though they do not carry voting rights.

Einhron wants Apple to issue more of these shares, and pay more dividends. He has sued to block Apple's proposal.

"Several hundred dollars per share would be unlocked if Apple were to follow through on this suggestion," he told Bloomberg TV.

He accused the company of having a "Depression-era" mentality, and of being unable to see past its former traumas.

He said the move to block preferred shares "unnecessarily limits the board's flexibility to distribute preferred stock as a means of unlocking shareholder value".

He also told CNBC that Apple "feel like they can never have enough cash".

Apple's shares dropped in price in the past six months, from a high of $705.07 on 19 September down to $468.22 as of press time.

"We remain committed to having an ongoing dialogue with our shareholders to get perspectives around return of capital and driving shareholder value," Apple told Bloomberg in a statement.

It added in a longer press statement on its website:

By early last year, Apple’s cash balance had built to a point beyond what we needed to run our business and maintain flexibility to take advantage of strategic opportunities, so we announced a plan to return $45 billion to shareholders over three years. As of next week we will have executed $10 billion of that plan.

We find ourselves in the fortunate position of continuing to generate large amounts of cash, including $23 billion in cash flow from operations in the last quarter alone.

Apple’s management team and Board of Directors have been in active discussions about returning additional cash to shareholders. As part of our review, we will thoroughly evaluate Greenlight Capital’s current proposal to issue some form of preferred stock. We welcome Greenlight’s views and the views of all of our shareholders. ...

We remain committed to having an ongoing dialogue with our shareholders to get perspectives around return of capital and driving shareholder value.