What Will the Apple Stock Debate Do?
Apple (NASDAQ:AAPL) has said it may announce an increase in its dividend price after an influential investor picked up a public fight with the company. The hedge fund Greenlight Capital filed a lawsuit against the iPhone maker on Thursday and announced its intention to get shareholders to vote out a proposal that, it says, will end the practice of preferred stock at the company.
Apple reacted by announcing it was in “active discussions” about returning more cash to shareholders and that it would consider Greenlight’s proposal. The company had first announced a dividend and stock buybacks program last year, setting aside $45 billion for it.
However, since then it has continued growing its already healthy cash reserves, and with $137 billion in the bank at the end of December, it’s no wonder that shareholders want a bigger share of the pie.
But despite Apple’s statement, Greenlight is not expected to back off before the company’s annual shareholder meeting scheduled for February 27. It is at the meeting that the preferred stock debate will come up. Apple has enlisted the help of the California Public Employees’ Retirement System, another of its big investor groups, to get what it calls Proposal #2 passed.
CalPERS has been a longtime critic of Apple’s corporate governance practices, but does support this proposal.