Einhorn has a point: what the hell is Apple doing sitting on that money?

Apple hoards cash, apparently, "like a person who has gone through a trauma".

Apple has had to fend off an attack from one of its share holders who is demanding it fork out more of its $137bn cash pile to investors.

David Einhorn has sued iPhone maker Apple accusing the most valuable company in the world of having a “depression era” mentality.

But for a company with a reputation like Apple, which no amount of third world worker scandals seems able to damage, this should be seen as nothing more than an advertisement, splashing the fact that Apple is sitting on more ready cash than a fair amount of small countries on to headlines around the world.

The billionaire activist, who heads up hedge fund Greenlight Capital, told US TV news channel CNBC that Apple hoards cash like a person who has gone through a trauma, referring to Apples near bankruptcy in the early ‘90s before Steve Jobs turned the firms fortunes around with the introduction of the iPod.

Apple shares have tumbled 35 per cent from their peak in September 2012 as its growth has slowed, despite the successful, if not phenomenal, launch of the iPad mini and iPhone 5.

Einhorn’s opinion may be justified; Apple is planning to eliminate its “preferred” stock, which pays out a fixed dividend over time, at its shareholder meeting later this month. These shares are better than ordinary shares when it comes to paying out a company's assets.

Einhorn, it should be noted, has a history of corporate meddling. In May 2011, Einhorn called for Steve Ballmer, (who is still) CEO of Microsoft, to step down after Microsoft was passed by both IBM and Apple in market value.

While Einhorn may not be the most trustworthy of activists, his point may well stand: What the hell is Apple doing with all that money? 

Apple has never explained its reasons for holding onto the cash other than to say its preserving its options but it certainly isn’t using it to develop new products. Apple's tally for research and development in 2012 was 2 per cent of its annual spend, dwarfed by its tech rivals. IBM’s for example is 6 per cent.

While Einhorn’s motives for demanding Apple make use of their cash maybe entirely about increasing his own fortune, Apple is in danger of stagnation if it doesn’t use its vast hoard wisely. 

Maybe the reason it has yet to spend its money is that, without the guiding light of Jobs at the helm, it doesn’t know what to spend it on.

Photograph: Getty Images

Billy Bambrough writes for Retail Banker International at VRL financial news.
 

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Nigel Farage spectacularly mocked for delivering a letter of complaint to BBC

Ukip, we Photoshop.

Like a solitary pensioner finally taking action over Robertsons jam changing its logo, Nigel Farage decided to march in person to the BBC’s New Broadcasting House to deliver a letter of complaint.

He (or some poor assistant behind him) took a ludicrous video of him walking there, then holding up a piece of blank-looking paper:


A moving and defiant act of protest, I’m sure you’ll agree.

Unfortunately for the former Ukip leader – but happily for the entire internet – this was extremely easy to Photoshop:


…and also easy to parody:


Your mole should inform you that Farage’s complaint is about a voxpop of a member of the public taken by a BBC journalist. When interviewed, the resident of Harlow, Essex, claimed the Brexiteer had “blood on his hands” for the death of a local Polish man last year.

Rather ironic for Nigel “voice of the people” Farage to be complaining about a voxpop by a member of the public – especially considering how often he pops up as a talking head on the BBC himself. Speaking of which, perhaps he can do some filming while he waits for a response to his complaint, as he’s in the area…

I'm a mole, innit.