Eagle Eye Opener: U.S. Stocks Open Down Due to Economic Reports and Draghi Comments; Greenlight Capital Sues Apple for Hoarding Cash; Amway Notches Record Results »
U.S. Stocks Fall Amid Draghi Comments, Economic Reports (Bloomberg)
U.S. stocks fell this morning, after a two-day advance in the Standard & Poor’s 500 Index, as investors weighed economic reports and comments by European Central Bank President Mario Draghi. Sprint Nextel Corp. fell 1 percent as the third-largest U.S. wireless carrier reported a loss in monthly contract subscribers. Akamai Technologies Inc. plunged 16 percent, after missing its forecast estimates. News Corp. slipped 2.7 percent in the wake of cutting its profit outlook due to declining ratings for shows such as “American Idol” and “X Factor.” Yahoo! Inc., the biggest U.S. Web portal, bucked the trend by rising 2.1 percent as Pivotal Research Group LLC. raised its recommendation on the company’s shares. At 10:42 a.m. EST, the S&P 500 had fallen 0.7 percent to 1,501.87.
Greenlight’s Einhorn sues Apple, claiming “cash problem” (Reuters)
Fund manager David Einhorn’s Greenlight Capital sued Apple Inc, for not unlocking shareholder value in light of the company’s large stockpile of cash. Einhorn, a well-known short seller, is long Apple shares and said in a television interview on Thursday that he admires the company but claims it also has a “cash problem” that needs fixing. Greenlight filed suit in federal court in New York to force Apple to modify a proposal in its proxy, which Greenlight believes does not conform to regulatory rules. Greenlight is opposing that proposal, No. 2, on Apple’s proxy, which the firm said would remove Apple’s ability to issue preferred stock from its charter. In a filing with the U.S. Securities and Exchange Commission, Greenlight said it was “dissatisfied with Apple’s capital allocation strategy.” In a CNBC interview, Einhorn said shareholders would like to receive preferred stock with a 4 percent yield but he added Apple officials rejected the idea of offering perpetual preferred stock last September. “Apple has $145 per share of cash on its balance sheet. As a shareholder, this is your money,” Greenlight said in an open letter to other investors.
Amway posts record sales, expands in Michigan and Asia (Detroit Free Press)
Amway’s parent company Alticor today reported record 2012 sales $11.3 billion, up 3.7% from the previous year. Doug DeVos, Amway’s president, said the maker of vitamins and home products is in the process of adding 250 jobs in its hometown of Ada, Mich., near Grand Rapids, during the next several years. “We’re happy, it’s been a great year for our distributors, and as long as we invest to keep our biz opportunities fresh and products fresh and viable in the marketplace, we’re able to enjoy great results,” DeVos said. Amway currently employs about 4,000 workers in Michigan; its parent Alticor employs another 1,000 in hotels and non-direct-selling operations. Recent job additions in Michigan come from a new $24-million nutrition powder products plant and a plant now being built to make nutrition soft gels and tablets.