Info Tech
How Einhorn turned from Apple advocate to agitator
NEW YORK- Hedge fund star manager David Einhorn was arguably Apple Inc’s biggest cheerleader on Wall Street with a stake worth about $600 million and an oft-cited prediction that the company’s market value would hit $1 trillion some day.
So it was a shock on Thursday when Einhorn announced that he was suing Apple to get it to deploy its $137.1 billion cash pile more effectively and arrest a 35 percent drop in its share price from a record high logged last September.
Unknown to Wall Street, Einhorn had for months been imploring Apple’s chief financial officer, Peter Oppenheimer, to have the company issue dividend-paying preferred shares to reward investors and juice the stock price.
Einhorn told Biztellers he felt blindsided when he received Apple’s January 7 annual proxy statement and saw that it contained a proposal that would make it more difficult for the company to issue preferred stock.
“We saw that the proxy came out and we saw they were planning to get rid of preferred and then we said, ‘Wait a minute, we are not going to be able to bring this up again in a good way if we allow them to do this. So we should contest it now,'” Einhorn said in a phone interview.
Einhorn’s $8 billion Greenlight Capital Inc on Thursday sued Apple in U.S. District Court in New York, asserting that its Proxy Proposal 2 would “restrict the board’s ability to unlock the value on Apple’s balance sheet.
The 44-year-old hedge fund manager, who made his name and fortune by predicting the collapse of Lehman Brothers, is also urging Apple shareholders to vote against the proxy proposal at the company’s annual meeting on February 27.
Apple said in a statement that it will evaluate Greenlight’s recommendation and denied that its proxy proposal was aimed at preventing the issuance of preferred stock. If Proxy Proposal 2 is adopted, Apple said it could still issue preferred stock as long as it obtained approval from shareholders.
But the extra hurdle, from Einhorn’s point of view, was unacceptable and so he took the matter to Apple CEO Tim Cook.
The way Einhorn tells it, Cook was more receptive than his CFO and the two sides are still talking. But Einhorn decided to file suit anyway because of the approaching annual meeting.
“The lawsuit is just to get the proxy sorted out,” he said.
LONG ON APPLE
Einhorn began investing in Apple in 2010 and holds 1.3 million shares worth about $600 million at current values.
He emerged as a prominent advocate for the stock after it began to fall last year following some disappointing quarterly results, stiffer competition in the smartphone market, and product snafus that fueled fears Apple had lost its innovative edge following the death of co-founder Steve Jobs.
Einhorn said in a letter to investors last month that Greenlight had taken advantage of the drop in Apple’s shares to buy more stock in the fourth quarter. That was one reason the fund posted a negative return of 4.9 percent in the quarter.
Since May last year, Einhorn has been urging the company to unlock several hundred billion dollars of shareholder value by distributing preferred stock, which he favored over a share buyback because it did not deplete cash immediately.
In private conversations with Oppenheimer, Einhorn said Apple could initially distribute $50 billion of perpetual preferred stock with a 4 percent annual cash dividend paid quarterly at preferential tax rates.
But, according to Einhorn, Oppenheimer and his advisers calculated the dividend to be 8 percent, which they deemed too high.
“We said, that’s crazy. That’s crazy. We think 4 percent. If we’re wrong, maybe it’s 4.5 percent or 4-1/4 percent – it is not 8 percent. So, we kind of agreed to disagree. We kind of sat on it for a few months,” Einhorn said.
When he eventually took the matter to Cook, Einhorn said he felt that the CEO did not know all the details of Einhorn’s discussions with Oppenheimer.
“When I discussed this with Tim Cook, and actually, the conversation has been going on for the last couple of weeks, he said that he wasn’t familiar with my previous conversations with Peter Oppenheimer and whoever Peter Oppenheimer’s advisers were. I was surprised by that.
“I think we got the brush-off the first time,” Einhorn said about Oppenheimer and his advisers. “I don’t know what the communication was” between Oppenheimer and Cook.
Apple declined to comment on the specifics of the discussions with Einhorn.
A source familiar with the matter characterized the interaction with the hedge fund manager as “cordial,” saying that there had been “friendly disagreement” only on whether common shareholders should be allowed to vote on something as significant as an issuance of preferred stock.
NEAR-DEATH EXPERIENCE
Einhorn said in a television interview that despite their differences, he felt Cook was doing an excellent job as CEO, but he described Apple’s management as having a “Depression-era” mentality that led it to hoard cash and invest only in the safest, lowest-yielding securities.
“In other words, people who have gone through traumas…and Apple has gone through a couple of traumas in its history, they sometimes feel like they can never have enough cash,” Einhorn said on CNBC.
Cook and Oppenheimer both joined Apple during the turbulent late 1990s when the tech company was struggling to stay afloat and before Steve Jobs engineered a sensational turnaround with products like the iPhone and iPad that became must-haves for consumers around the world.
Oppenheimer later earned a reputation on Wall Street for extreme conservatism in cash management. The company likes to remain liquid by investing in safe but low-yielding U.S. Treasury and agency debt, shies away from big acquisitions, and repeatedly preaches a “capital preservation” mantra to investors.
Under Cook in 2011, Apple gradually loosened the reins, announcing its first multi-year dividend and share repurchase programs.
Einhorn and Apple will have another bout when they air their arguments on February 22 in court. Before then, the outspoken fund manager will be lobbying other shareholders.
Analysts say one benefit of preferred stock is that up to 80 percent of the dividends can be tax-free for corporate investors, although preferred shares tend to be less liquid than ordinary shares or bonds.
“The idea is powerful and when I have a chance to explain it to the shareholders, most will see it as an enormous win-win,” Einhorn said.
In efforts at spicing up the 2023 ITREALMS E-Waste Dialogue, the management of ITREALMS Media has partnered with E-waste Producer Responsibility Organization of Nigeria (EPRON) membership organisations for a day-long collection scheme of small electronic waste on Friday, December 15, 2023.
The EPRON members aligning their partnership with 2023 ITREALMS E-Waste Dialogue are EL-AS Tech Enterprises Limited and WEEE Eco-Friendly.
ITREALMS’ day-long collection scheme is part of the commemoration of 2023 international E-Waste Day (IEWD) within the ITREALMS E-Waste Dialogue with the theme “You Can Recycle Anything with a plug, battery or cable” at Welcome Centre Hotels, International Airport Road, Lagos.
Revealing this collaboration, the Group Executive Editor, ITREALMS Media, the organisers of the 2023 ITREALMS E-Waste Dialogue, Sir. Remmy Nweke, urged mobile device enthusiasts to come along with their devices that have reached their end-of-life to the venue for proper disposition by professionals who would also be on grounds to address some topical issues.
The collection of small electronic wastes especially mobile phones and like-devices, would be carried out by EPRON member organisation, EL-AS Tech Enterprises Limited as facilitated by ITREALMS Media group as part of this year’s ITREALMS E-Waste Dialogue on Friday, December 15, he added.
He disclosed that the exercise would commence at Welcome Centre Hotel by 9am till close of work hours the same day.
Nweke pointed out that the collection of small e-waste items would include mobile phones, pointers mouse, earpieces, rechargeable torches, phone chargers, to name a few.
Further, he said, that this initiative has become time-serving because some people may have missed any other opportunity before now for the year-long campaign, hence this awareness on e-Waste has to be continuous, “ITREALMS came up with this scheme.”
Nweke beckoned on Nigerians, especially mobile phone users, to leverage the opportunity in disposing of their mobile devices they no longer use, of course in exchange for a voucher or gift item.
In her reaction to this year’s day-long small waste collection, EPRON Executive Secretary, Mrs. Ibukun Faluyi, described the initiative as commendable, expressing confidence it would intensify the collection of end-of-life devices for proper disposition.
Mrs. Faluyi, also urged Nigerians to take advantage of this day-long collection of small wastes courtesy of ITREALMS Media.
Recalling for instance that in October 2022, EPRON had partnered SLOT alongside some UN agencies for collection of small e-waste items in Lagos, including the United Nations Information Centres (UNIC), United Nations Industrial Development Organization (UNIDO), International Labour Organisation (ILO), Lagos Waste Management Authority (LAWMA) and Lagos State Environmental Protection Agency (LASEPA).
This is even as the Executive Vice Chairman of the Nigerian Communications Commission (NCC) Dr. Aminu Maida and Director-General, National Environmental Standards and Regulations Enforcement Agency (NESREA), Prof. Aliyu Jauro, would both lead speakers at the 2023 ITREALMS E-Waste Dialogue slated for this Friday, December 15, in Lagos.
Today, September 12, the tech corporation Apple will introduce the iPhone 15, their newest iPhone model.
According to a Forbes story, this model, which will be introduced at the company’s “Wanderlust” event in Cupertino, California, will be available in four variations: the iPhone 15, iPhone 15 Plus, iPhone 15 Pro, and iPhone 15 Pro Max.
Here are five things you should know about the new iPhone 15 model.
1. The new model is made of titaniu, not stainless steel as some other Apple smartphone models, Senior research analyst at DIGITIMES, Luke Lin reports.
2. The Pro Max model will feature double the optical zoom on the iPhone 14 as it comes with a newly-introduced ‘periscope lens upgrade, performing 5-6x optical zoom.’
3. The Pro models will carry an A17 bionic chip expected to make it perform faster.
4. The iPhone 15 model will feature a USB-C charging port, the same port featured on some Android phone models.
5. Due to its titanium shell, the new model is anticipated to be more expensive to purchase. The following is the speculated price list, as reported by Forbes:
The iPhone 15 starts at $799, the iPhone 15 Plus at $899, the iPhone 15 Pro at $1,099 ($100 increase), and the iPhone 15 Pro Max at $1,299 ($200 increase).
In an effort to reduce the exorbitant cost of Premium Motor Spirit, better known as petrol, the Infrastructure Bank Plc announced its collaboration with FEMADEC Group on Monday to offer 500 buses powered by autogas (Compressed Natural Gas).
Partners in the agreement claimed that the project was created to provide citizens with dependable, affordable, and environmentally friendly travel options, taking into account the negative effects of the nationwide increase in PMS costs.
Under Decree No. 51 of the Federal Republic of Nigeria’s 1992 Constitution, the Infrastructure Bank, originally known as the Urban Development Bank of Nigeria Plc, was founded in 1992 to promote the quick development of infrastructure throughout the nation.
In a statement issued in Abuja on its partnership with FEMADEC, the bank said, “The preliminary offer extended by TIB lays a solid foundation for the expansion of FEMADEC Group’s CNG bus fleet.
“With plans to introduce 500 CNG buses within the next five years, commencing with an initial batch of 50 buses in the forthcoming year, this proposal stands poised to instigate significant change.
“The acceptance of this proposition by FEMADEC Group, notably championed by Fola Akinnola, the Group Chief Executive Officer, is a testament to their zeal and dedication to this alliance.”
The bank described the partnership as a “pivotal endeavour that is primed to redefine Nigeria’s public transportation landscape, offering dependable, cost-effective, and ecologically conscious travel alternatives for citizens, while harmonising with the nation’s broader sustainability ambitions.”
“This partnership represents a remarkable stride towards a more ecologically aware future for Nigeria’s transportation sector, highlighting the shared commitment of both TIB and FEMADEC Group to sustainable advancement and progress.”
It said FEMADEC Group’s strides in operating Compressed Natural Gas buses, including the existing fleet of 20 CNG buses under LAMATA, underscored their unwavering dedication to ecologically sound solutions, a commitment predating the fuel subsidy removal.
“Their leadership within the CNG value chain is undeniable, and the new alliance with TIB underscores their foresight.
“This partnership seamlessly aligns with TIB’s sustainability objectives, echoing their resolute endorsement of the government’s net-zero and climate change agenda.
“The bank’s aspiration to champion Nigeria’s infrastructure progress is evident in its endorsement of pivotal initiatives like this, yielding expansive positive impacts on both the environment and society,” the bank stated.
The bank added that it would continue to make a significant contribution to the country’s growth as a leading financial institution committed to advancing effective and long-lasting infrastructure projects.
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