Stefan Mileschin

Jobs' Mob is reporting trouble in the ranks as a key shareholder hedge fund manager David Einhorn's Greenlight Capital has revolted over the piles of cash the outfit is sitting on.

Apple has been following a policy of hardly giving shareholders any dividend but they are being kept happy because the share price has gone up. This has meant that Jobs' Mob is sitting on piles of cash.

That worked while the share price went up, but now that the value of the company has fallen as the reality distortion field about the company has cracked, shareholders are getting antsy.

Einhorn wants the company to dole out a bigger piece of its $137 billion cash pile to investors. We guess he wants some cash back before Apple goes the way of Nokia and has to eat up its cash pile before it dies amid some very tough competition.

What makes the move doubly ironic is that Einhorn is the ultimate Apple gadget fan.

But he told CNBC that the company harboured a "Depression-era" mentality that led it to hoard cash and invest only in the safest, lowest-yielding securities.

Part of the problem is that Apple fears the time that it nearly went broke in the 1990s which has led the company to be exceptionally conservative with its cash, Einhorn said.

Soon after Steve Jobs' death, Apple started a quarterly cash dividend and a share buyback that would pay out $45 billion over three years. At the time, Apple was sitting on $98 billion in cash.

But Einhorn's court case targets a proposal by Apple to eliminate from its charter "blank cheque" preferred stock. The board now has discretion to issue preferred stock but is asking shareholders at its annual meeting on February 27 to vote on a proposal that would first require shareholder approval.

Einhorn had been lobbying Apple shareholders to vote against the plan, and put forward his own proposal for an issuance of preferred stock - which he deems superior to dividends or share buybacks - with a perpetual four percent dividend.

It is expected that this sort of stockholder pressure will get worse as Apple's share price declines and its prospects look grimmer.

Einhorn's company, Greenlight, suffered badly this year because of all the stake he had in Apple. When Apple's late-2012 stock swoon happened he said that Apple needs to fix its "cash problem."

Of course Apple is responding in its traditional way. According to Einhorn, he had gone to Apple's chief financial officer who ignored him. He then went over CFO's Oppenheimer's head to Tim Cook, the chief executive officer, who does not seem to have done much either.

But Apple fired back yesterday saying Einhorn's lawsuit over the shareholder proposal was misguided and that striking the "blank cheque" provision from its charter would not preclude preferred share issuances in future.

But Einhorn seems to have a lot of support for his case that Apple shares are "utterly misvalued" at current levels.

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