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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The Taliban's succession crisis will not diminish its resilience

Haibatullah Akhunzada's appointment as leader of the Taliban may put stress on the movement, but is unlikely to dampen its insurgency. 

After 19 years under the guidance of the Taliban’s supreme leader Mullah Omar, the group has now faced two succession crises in under a year. But although Haibatullah Akhunzada’s appointment as leader of the Taliban will likely put stress on the movement, it shows few signals of diminishing its renewed insurgency.

The news pretty much ends speculation about former leader Mullah Akhtar Mansour’s death in a US airstrike in Pakistan’s south-western Baluchistan province, which was criticised by Islamabad as a violation of its sovereignty.

The Taliban would have prepared extensively for this eventuality. The fast appointment, following days of intense council, appears to be a conspicuous act of decisiveness. It stands in contrast to the two-year delay the movement faced in announcing the death of the Mullah Omar. It will be not be lost on the Taliban that it was subterfuge around the death of Mullah Omar that caused the fracture within the movement which in turn led to the establishment of an ISIS presence in the country.

The appointment is a victory for the Taliban old guard. As former head of the Taliban's judiciary and Mullah Mansour’s deputy, in many ways, Haibatullah is a natural successor. Haibatullah, described by Afghanistan expert Sami Yousafzai as a “stone age Mullah,” demonstrates the Taliban’s inherent tendency to resort to tradition rather than innovation during times of internal crisis.

The decision taken by the Taliban to have an elder statesman of the group at the helm highlights the increasing marginalisation of the Haqqani network, a powerful subset within the Taliban that has been waging an offensive against the government and coalition forces in northwest Pakistan.

Sirajuddin Haqqani, the leader of the Haqqani network who already has a bounty of 5 million dollars on his head, was touted in some Taliban circles as a potential successor, however the decision to overlook him is a conservative move from the Taliban. 

The Taliban’s leadership of the jihad against the Afghan government is hinged on their claims to religious legitimacy, something the group will hope to affirm through the Haibatullah’s jurisprudential credentials. This assertion of authority has particular significance given the rise of ISIS elements in the country. The last two Taliban chiefs have both declared themselves to be amir ul-momineen or ‘leader of the faithful,’ providing a challenge to the parallel claims of ISIS’ Abu Bakr al-Baghdadi.

Any suggestions that Mansour’s death will lead to the unravelling of the Taliban are premature. The military targeting of prominent jihadi leaders within group structures has been seen in operations against the leadership of ISIS, al-Qaeda in the Arabian Peninsula, al-Qaeda in the Islamic Maghreb, and other groups.

In recent research for the Centre on Religion & Geopolitics, we found that it is often less prominent jihadis that play an integral role in keeping the movement alive. Targeted killings do create a void, but this often comes at the expense of addressing the wider support base and ideological draw of militant outfits. This is particularly relevant with a relatively decentralised movement like the Taliban.

Such operations can spur activity. If the example of the Taliban’s previous leadership succession is to be heeded, we might expect renewed attacks across Afghanistan, beyond the group’s strongholds near the eastern border with Pakistan. The brief capture of Kunduz, Afghanistan's fifth-largest city, at the end of September 2015, was a show of strength to answer the numerous internal critics of Mullah Mansour’s new leadership of the movement.

In a news cycle dominated by reports of ISIS, and to a diminishing extent al-Qaeda, atrocities, it is important to comprehend the renewed brutality of the Afghan insurgency.  Data from the Centre on Religion and Geopolitics Global Extremism Monitor found a seventeen per cent rise in fatalities from March to April, marking the start of the Taliban’s spring fighting season. A suicide attack in central Kabul on the headquarters of an elite military unit that killed 64 people was the single most deadly act of terror around the world in the month of April, and the group’s bloodiest attack in the Afghan capital for years. Reports this morning of a suicide attack on a bus killing 10 staff from an appeal court west of Kabul, suggests that the violence shows no sign of diminishing under the new leadership.

All these developments come during a period of renewed impetus behind international peace talks. Last week representatives from Pakistan were joined by delegates from Afghanistan, the United States, and China in an attempt to restart the stalled negotiation process with the Taliban.

Haibatullah Akhunzada’s early leadership moves will be watched closely by these countries, as well as dissonant voices within the movement, to ascertain what the Taliban does next, in a period of unprecedented challenge for the infamously resilient movement. 

Milo Comerford is a South and Central Asia Analyst for the Centre on Religion and Geopolitics