As many of you already know, Apple is taking some heat for its ridiculously enormous cash hoard - 137 billion in cash. Recently, billionaire hedge fund manager David Einhorn publicly attacked Apple claiming they need to make that money work for their shareholders. During Apple's annual shareholder meeting, just a few days later, Tim Cook dismissed Einhorn's statements by referring to it as a silly sideshow. On Thursday Einhorn proposed an interesting plan he calls "iPrefs," a class of preferred stock with a value of $50 that yields an annual dividend of 4%, or $2. Einhorn will be meeting soon with Apple's board to discuss this plan. It will be very interesting to see what happens with this.
Would you be interested in purchasing iPrefs?
I agree with Einhorn's claim that Apple could and should be using the extra cash to further invest in the company. However, I do not feel that Einhorn has the power to tell Apple what to do with their money. From a shareholder's perspective, I would definitely be interested in purchasing iPrefs. An annual return of 4% on investment is definitely an attractive offer, especially considering the low interest rates our economy is experiencing right now.
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