Riddle me this: How does a company whose share price is up 105,000 percent since its IPO in late 1980 have angry shareholders?
Well, if you have hedge funds charging their clients 2 and 20 percent fees for the privilege of owning the stock, then you will have agitators like David Einhorn of Greenlight Capital harping about too much money on the balance sheet and suing to get more cash for his fund.
This saga is truly all about Apple’s green — its cash. Greenlight is essentially attempting to use “greenmail” to force Apple into parting with more treasured cash.
And there are quite a few bushels of it — $137 billion-plus and growing! In fact, Apple’s massive orchard of cash is larger than the US Treasury’s balance.
Apple needs to do something with its cash holdings — not for Einhorn’s sake, but because it’s irresponsible to hold that much cash. The stock of a company is not a CD or a savings bond. People own Apple’s stock as an investment, and they expect the company to be productive with their capital.
For $10 billion to $12 billion, it could buy Netflix outright and have great content for Apple TV and iTunes.
And the Disney-Apple relationship is very cozy, too. The Jobs Family Trust owns 7.7 percent of Disney and is the single largest holder from Disney’s buyout of Pixar. That content could be delivered over the iPad and iPhone.
Heck, Apple could outright buy Disney if it wanted to and have $20 billion left over!
The point is, Apple needs to alter an experience the way it did with smartphones, iTunes and tablets.
Profiting from developing a TV set would be tough. However, a totally new Apple set-top box with its content and delivery could be a very differentiated — and highly lucrative — product.
Buying a satellite TV company like Dish or DirectTv could be the smartest move of all — a natural and company-altering move.
Imagine the possibilities of streaming live TV from its own Apple-controlled satellites to iPads and iPhones.
I suspect the company will deploy its cash in one form or another. Right now, many are left wondering what is the next iSomething.