Apple (AAPL) is set to conduct a shareholder meeting at its Cupertino, California headquarters on Feb.23. The meeting is taking place as Apple shares are trading at a record high and it became the most valuable company, topping Exxon Mobil (NYSE:XOM), with a market capitalization of more than $479 billion.
Apart from the stated resolutions, the meeting is expected to focus on the potential use of Apple's $98 billion cash pile. Shareholders may ask Chief Executive Tim Cook to give the company's stance on rewarding shareholders with a one-time dividend or share repurchase.
At a recent sell-side conference, Cook noted that capital allocation plans are actively being discussed and asked for time. Cook, who succeeded Steve Jobs as CEO, said he would like to tackle Apple's capital allocation decisions "judiciously" as investors are expecting a dividend announcement from Apple.
"We believe it (Cook's comments) confirms our suspicion that a dividend is coming in H2:CY12," Jefferies analyst Peter Misek wrote in a recent note to clients.
Several Wall Street analysts think that it is high time that Apple resuming its shareholder enhancement measures as its cash balance is one of the highest among the U.S. technology giants. Apple last repurchased its shares in 2001 and scrapped its dividend in the mid 1990s.
If Apple declares a dividend or buyback shares, it would further boost investor sentiment and would get more institutional investors, who would primarily build positions on dividend stocks.
As a result, the speculation have gained intensity regarding Apple may provide some indication during the meeting over returning cash, which is approaching $100 billion, to shareholders.
The meeting is also expected to discuss the company's supply chain issues in China and the ongoing investigation by Fair Labor Association at factories of Apple's assembly suppliers, including Foxconn, in China. Foxconn plants have been in the spotlight for poor working conditions resulting in worker suicides as well as plant explosion. Apple is also expected to conduct similar inspections at Quanta and Pegatron facilities later this Spring.
According to the supplier responsibility report issued by Apple, 93 facilities had records that indicated more than 50 percent of their workers exceeded weekly working hour limits of 60 in at least 1 week out of the 12 sample period. At 90 facilities, more than half of the records indicated that workers had worked more than 6 consecutive days at least once per month, and 37 facilities lacked an adequate working day control system to ensure that workers took at least 1 day off in every 7 days.
Another development that came in to limelight is the patent row over the use of iPad brand in China. A Chinese technology company Proview is seeking to ban Apple from selling tablets under the name iPad as it claims to own the iPad trademark in China.
Investors would require Apple to settle the case and move ahead as China is touted to be the Apple's next significant market after the U.S.
Apple shares, which recently surpassed the $500 landmark, were down $2.47 to $512.38 on Nasdaq.