updated 01:32 pm EST, Mon March 4, 2013
Supports taking long-term approach
Apple should "ignore" David Einhorn and Greenlight Capital, according to Warren Buffett. Speaking with CNBC today, the famous investor and Berkshire Hathaway CEO dismissed Einhorn's push for a preferred Apple stock option, which recently led to a threatened lawsuit. Greenlight ultimately withdrew the suit, since its only goal was to prevent a vote on proxy proposal at Apple's annual shareholders meeting, for which a judge granted the needed injunction.
"I would ignore him [Einhorn]," said Buffett. "I would run the business in such a manner as to create the most value over the next five to 10 years. You can't run a business to push the stock price up on a daily basis. Berkshire has gone down 50 percent four times in its history. When that happens, if you've got money you buy it. You just keep working on building the value.
"I heard from people each time [Berkshire shares dropped], saying why don't you do this or that," the executive continued. "Pay a dividend. I think Apple's done a good job of building value. They may have too much cash. Now one reason they have so much cash is two thirds of it has not yet been taxed." Much of Apple's cash is located overseas, but the company has refused to bring it back to the US until the government bends to demands for a tax holiday.
In response to pushes for Apple to increase its dividend or to offer a stock split, Buffett offered an anecdote about a talk with late Apple co-founder Steve Jobs. "When Steve called me, I said, 'Is your stock cheap?' He said, yes. I said, 'Do you have more cash than you need?' He said, a little. I said, then buy back your stock. He didn't...Now, when our stock went from $90,000 to $40,000 to $45,000, I wrote about, we wanted to buy the stock. We didn't quite manage to. But if you could buy dollar bills for 80 cents, it's a very good thing to do. If you could buy dollar bills for 80 cents, that's a good thing to do."