Tim Cook: Greenlight Case Is A Silly Sideshow

Apple (NASDAQ:AAPL) chief executive Tim Cook called the ongoing lawsuit proceedings versus Greenlight Capital a silly sideshow to larger capital allocation discussions, adding that the proposal being opposed by the hedge fund had been designed for the benefit of shareholders.

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“I find it bizarre we find ourselves being sued for doing something that’s good for shareholders,” Cook said while answering a question during the Goldman Sachs technology conference on Tuesday. “It’s a silly sideshow, honestly … This is a waste of shareholder money, it’s a distraction, and it’s not a seminal issue for Apple.”

Cook added that while he was personally planning to vote in favor of the proposal during the company’s annual shareholders meeting on February 27, the larger issue was about the rights of shareholders. “It’s not about whether Apple returns additional cash to shareholders, it’s not about how much cash to return to shareholders, it’s not about any of those things,” he said. “We feel so strongly for Apple that shareholders should approve any issuance of preferred stock.”

The Apple chief executive repeated the sentiment expressed in the company’s statement from last week that it was serious about returning money to investors. “The serious issue on hand is the return of cash: how to do it, how much to do, and we’re very serious about that,” he said. “The management team and the board are in very active discussions. That’s what our shareholders want.”

According to Cook, the company considered its large cash holdings and free cash flow “an incredible privilege.”

Cook also defended the allegation from Greenlight’s David Einhorn, who said Apple possessed a “depression-era mentality” and was not moving with the times.

“Apple makes bold and ambitious bets on product and we’re conservative financially,” Cook said. “If you look at what we’ve done in terms of investment, last year we invested $10 billion in capital expenditure … We’re investing in retail around the world, in product innovation, in new product, in supply chain. We’re acquiring some companies… We’re returning $45 billion to shareholders through a combination of dividends and buybacks. I don’t know how a mentality with a depression-era mindset would have done all those things.”

However, Cook added that Greenlight’s proposal of issuing perpetual preferred stock with a 4 percent yield was being considered by the company. “I think it’s creative,” he said of the idea. “We are going to thoroughly evaluate their proposal.”

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