Warren Buffett has some advice for Apple CEO Tim Cook on how to respond to activist investor David Einhorn's very public calls for some of the company's vast cash holdings to be returned to shareholders.
During a three-hour, live appearance on CNBC's "Squawk Box" on Monday, Buffett said: "The best thing you can do with a business is run it well. And if you run it well, the stock behaves fine over time."
Noting that he has also faced criticism, especially during the four periods over the decades that Berkshire Hathaway's stock had lost half its value, Buffett said if he were running Apple "I would ignore (Einhorn). I would run the business in such a manner as to create the most value over the next five or 10 years. You can't run a business to try and run the stock up every day."
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Accusing the company of having a "depression-era mentality," Einhorn has been calling for Apple to issue dividend-paying preferred shares to return some of its $137 billion in cash back to shareholders. He sued the company over a proxy proposal that would have made it more difficult for Apple to issue those shares. That suit was dropped Friday by Einhorn's Greenlight Management because Apple "resolved the issue" by eliminating the disputed proposal.
Last week, Cook told shareholders he is "seriously considering" some ways to return cash to them.
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