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Apple's "More Shareholder-Friendly," Says Einhorn

Picture of David Einhorn

 

David Einhorn, president of Greenlight Capital, disclosed that he has added to his position in Apple. In a REUTERS story posted earlier this morning, Einhorn, who I've had the pleasure to converse with on a couple of occasions, on Tuesday said:

 

"We've added to our Apple position. Now we just wait for the release of Apple's next blockbuster product."

 

Unfortunately, the activist investors, who sued Apple due to the companies (then) perceived lack of fiscal awareness, didn't say when the purchases occurred nor at what price. It's worth noting here, though, according to SEC documents, Einhorn's fund, which has a value of just under $9 billion, held 1.3 million shares of Apple, which is valued at roughly $600 million as of Monday's close.

 

Given that Apple had just (presumably) bottomed at $385, and has soared as high as 20%, there's certainly a chance that Einhorn's new position might be in the green. For "regular investors," however, it is certainly encouraging that one of the most influential investors in the market today remains bullish on the stock.  

 

The only question that remains is regarding market sentiment following Apple's fiscal second-quarter results, during which the company offered the following Q3 guidance.

 

·         Revenue between $33.5 billion and $35.5 billion

·         Gross margin between 36 percent and 37 percent

·         Operating expenses between $3.85 billion and $3.95 billion

·         Other income/(expense) of $300 million

·         Tax rate of 26%

 

These are not exciting numbers, nor are they what Apple is accustomed to. But it's also worth noting here that the Street is still expecting higher results than what Apple is projecting. This suggests that some may still believe that the company, which now seems more mature, is low-balling expectations.

 

Regardless, giving that Apple, as Einhorn suggests, is more shareholder-friendly, investors are beginning to show a little bit more patience with the company's execution. But then again, patience is easy when the company plans to return $100 billion back to investors in the form of dividends and buy-backs.

 

As of this morning Apple was trading down $3.04, or 0.66% on 9 million shares

 

Disclosure: At the time of publication, Richard held shares of Apple and had no positions in the other stocks mentioned.

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