Apple This

Apple has the potential to end up with a mountain of cash here soon unless it starts spreading that wealth out to investors. The company raked in nearly $137 billion in cash at the end of 2012, making Apple the biggest cash-rich company outside of the banking industry. However, that number could very well increase to $170 billion.

David Einhorn of Greenlight Capital, which is a major investor in Apple, recently filed a lawsuit against the Cupertino company over guidelines dealing with the issuance of preferred stock. Although Einhorn has since dropped the suit, Apple is still being asked to share more of its cash stockpile beyond the current dividends it does now.

According to researchers at Moody, which discovered how much cash Apple had, “Unless Apple changes its philosophy towards liquidity/shareholder returns by increasing its $10 billion annual common dividend, or if Apple increases its stock buyback program, we estimate Apple’s cash balances could increase by another $35 billion in 2013 and exceed $170 billion.”

Apple was quick to respond to this assessment by stating that it has been in the process of discussing ways in which to return more money to stockholder. However, the company has had nothing concrete to offer so far. Bloomberg polled a group of analysts who believe Apple may increase its dividend by 56%. That would give investors a quarterly dividend of $4.14 per share, which is a higher amount offered by a majority of the corporations on the S&P 500 that offer dividends.

Needless to say, $170 billion is quite a bit of money and, in my opinion, more than Apple needs. If there is one thing a big company like Apple doesn’t need, it’s angry investors, especially ones that are willing to sue, like Greenlight Capital. Apple has bigger things to worry about at the moment, like Samsung’s upcoming Galaxy S4 smartphone and the fact that lots of Apple customers are asking for a cheaper version of the iPhone.

Source: CNET – Apple’s cash hoard could reach $170 billion by ear’s end