At Yahoo’s shareholder meeting today, a scuzzy shareholder [named George Polis] said to Marissa Mayer, “I’m Greek and I’m a dirty old man, and you look attractive.” He then asked about a dividend. [BI, HP]
David Einhorn is suing Apple to make them give shareholders a separate vote over whether shareholders should have a vote over whether Apple can issue preferred stock. I guess that requires some unpacking. Let’s start at the end, with the preferred stock. Here is Einhorn’s plan:
For example, Apple could initially distribute to existing shareholders $50 billion of perpetual preferred stock, with a 4% annual cash dividend paid quarterly at preferential tax rates. … Assuming Apple retains its price to earnings multiple of 10x and the preferred stock yields 4%, our calculations show that every $50 billion of perpetual preferred stock that Apple distributes would unlock about $30 billion, or $32 per share in value. Greenlight believes that Apple has the capacity to ultimately distribute several hundred billion dollars of preferred, which would unlock hundreds of dollars of value per share. Further, Greenlight believes additional value may be realized when Apple’s price to earnings multiple expands, as the market appreciates a more shareholder friendly capital allocation policy.
What do you think? I vote yes. (I mean, I think it’s a good idea. The voting is more complicated.) My math is here and ties closely to Einhorn’s:
The math is super straightforward though it can and should boggle you conceptually if you think about it. Read more »
Banking Industry Should Feel Free To Slash, Hip Check General Population Into Boards Again, Says BarCap AnalystBy Bess Levin
The Fed plans to notify financial institutions that passed a second round of stress tests that they can begin returning money to their shareholders, an important sign of the banking system’s speedy recovery. Banks are expected to review the Fed’s findings with their boards and could put out a flurry of announcements as early as Friday afternoon detailing their plans. In the first wave, JPMorgan Chase increased its dividend payout to 25 cents a share and announced plans to buy back $15 billion of stock. Wells Fargo said it will pay a special dividend of 7 cents per share and plans to purchase 200 million shares. “It signals the banking industry is back on its feet,” said Jason Goldberg, a banking analyst Barclays Capital. “Once out of the penalty box, we look for the dividend payout ratios and earnings to grow over time.” [Dealbook]