In February, hedge fund celebrity David Einhorn went on a media blitz against one of his favorite companies: Apple (NASDAQ:AAPL). At the heart of the debate was Apple's capital allocation policy, which was in need of some shareholder-friendly realignment. Einhorn sued Apple to unbundle some proxy votes and won days before the annual meeting.
While Apple may not have implemented his "iPref" idea, which was needlessly complex in a number of ways, the Mac maker did just change everything with a $17 billion bond offering to fund a $100 billion capital return program. That capital return program will consist of good old-fashioned dividends and share repurchases.
For what it's worth, Einhorn is now a happy camper.
The fund manager has now added to Greenlight Capital's Apple position, in part because Apple finally addressed the criticisms over its cash position. His overall thesis for Apple remains unchanged: Apple has a "terrific operating platform" and its loyal and growing customer base will continued making "repeated purchases" of a "growing portfolio of Apple products."
Einhorn called the new capital return program "vastly more shareholder friendly" relative to just a few short months ago. With the capital allocation issue now resolved, Greenlight Capital is just waiting for the next major product launch.
Einhorn opted not to disclose precisely how much the fund added to its Apple stake. Fortunately, investors won't have to wait long to find out. Hedge funds file quarterly Form 13F disclosures on their holdings. The last one was filed in February for the fourth quarter, and the next filing for the first quarter is due out in a matter of days.
At the end of 2012, Einhorn was sitting on 1.3 million shares, which was already a 20% increase in his stake from the third quarter. Later this month, we'll find out exactly how much more he boosted his position.
On top of that, Einhorn loaded up on call options in the fourth quarter in addition to his share position, so it's clear Einhorn's more than a little bullish.