The recent lawsuit filed by David Einhorn's Greenlight Capital hedge fund is a "silly sideshow" and a waste of time and money, Apple CEO Tim Cook said today.
Cook, speaking during a Goldman Sachs conference in San Francisco, disputed Einhorn's claims that Apple has a Depression-era mindset and said the company makes "bold and ambitious" bets on products while being conservative financially. He noted that Apple invested about $10 billion in capital expenditures last year and that it will spend a similar amount this year along with investing in retail stores, distribution, R&D, supply chain, and acquisitions.
"I don't know how a company with a Depression-era mindset would have done all those things," Cook said. "We do have some cash, but it's a privilege to be in this position. ... It's an incredible privilege for us to be in a position where we can seriously consider returning additional cash to our shareholders."
He reiterated that Apple's management team and board are in "very active discussions" about ways to give more cash to investors, and said that it will evaluate all options, including those proposed by Einhorn.
Greenlight last week sued Apple to block a shareholder proposal that would prevent the electronics giant from issuing preferred shares. The hedge fund wants Apple to share more of its cash with investors, and it believes the best way to do so is by distributing preferred stock to current shareholders.
Einhorn described Apple as a phenomenal company but one that's too cautious with its cash. He compared it to his grandmother who wouldn't even leave messages on his answering machine because she didn't want to get charged for the phone call.
"It has sort of a mentality of a depression," Einhorn said during a CNBC interview last week. "In other words, people who have gone through traumas -- and Apple's gone through a couple traumas in its history -- they sometimes feel they can never have enough cash."
Apple fired back, saying that the proposal wouldn't prevent preferred shares and that it would "thoroughly evaluate" Greenlight's plan.
Cook today called Greenlight's proposal "creative" but said the lawsuit Greenlight filed to block Proposal No. 2 in Apple's latest proxy statement is just a silly distraction. Greenlight argues that proposal would prevent Apple from issuing preferred stock, but the company says the provision simply protects shareholder rights by requiring their approval for any share issuance.
The Apple CEO added that the serious issue isn't the lawsuit but what Apple's going to do with its cash.
"Frankly, I find it bizarre that we would find ourselves being sued for doing something that's good for shareholders," Cook said. "I think it's a silly sideshow, honestly. And my preference would be that everyone on both sides of the issue would take the money they're spending on this and donate it to a worthy cause. That would be a lot better use of funds."