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A less savory reason for cash hoarding is tax avoidance. Apple keeps funds abroad in part to skirt U.S. taxes on foreign earnings. This technique is particularly common among cash-rich technology companies and investment firms because of laws that make it relatively easy to move intangible assets like intellectual property abroad. Ideas that may have been dreamed up by engineers in Silicon Valley are easily converted to patents that live (and can only be taxed) in Asia or Europe.
Nobody involved in these shareholder battles has completely selfless motives. Einhorn may be less worried about shareholder value than his personal balance sheet, since he's been long on Apple while its share price has declined 40% since its peak last September. But the point isn't who has more to gain, corporations or financiers; it's that we all have something to lose. The barbarians at the gate have unwittingly shed light on some major problems with our system of shareholder capitalism. It's afflicted by short-termism of all kinds, and we're headed into a growing debate about how to reform it. Many smart folks are calling for not only corporate-pay and tax reform but also a more Germanic-style stakeholder capitalism that can spread the benefits of a company's growth more evenly among labor, management and shareholders. (All those groups are represented on the boards of German companies.) If that's the result, there may be an upside, beyond share price, to all this "activism."