Not a great day for tech stocks

Wednesday wasn’t the best day for tech darlings Apple Inc. and Groupon Inc. Apple was hammered by investors, and Groupon was hammered by investors.

Here’s the story from Reuters:

Apple Inc CEO Tim Cook on Wednesday acknowledged widespread disappointment in the company’s sagging share price but shared few details about its secretive product pipeline and touched only briefly on a raging debate about how best to reward shareholders.

The world’s most valuable technology company headed into its annual shareholders’ meeting at its headquarters on shakier ground than it has been accustomed to in years, since the iPhone and iPad helped vault the company to premier investment status.

A declining share price has lent weight to Wall Street’s demand that it share more of its $137 billion in cash and securities pile – equivalent to Hungary’s Gross Domestic Product, and growing – a debate now spearheaded by outspoken hedge fund manager David Einhorn.

Einhorn was not spotted at the meeting at the company’s headquarters at 1 Infinite Loop in Cupertino. Cook repeated that the company’s board remained in “very very active” discussions about options for cash sharing, and said he shared investors’ dissatisfaction over the stock price.

“I don’t like it either. The board doesn’t like it. The management team doesn’t like it,” Cook told investors.

“What we are focused on is the long term. This has always been a secret of Apple.”

By focusing on the long term, revenue and profit will follow, he said.

Here are a few more examples from the Wall Street Journal:

There was little discussion about the issue that had emerged as a particularly hot topic before the meeting: Apple’s $137 billion cash hoard.

Hedge fund manager David Einhorn had been rallying Apple shareholders to vote against a company proposal related to how it could issue preferred stock. He opposed the proposal because he argued it would make it harder for the company to implement an idea he has been pushing for returning cash to shareholders.

Apple pulled that measure after a judge sided with Mr. Einhorn, who sued to stop it on grounds the proposal was improperly bundled with other items. Apple’s general counsel, Bruce Sewell, said Wednesday the company was “committed” to reviving the issue.

Mr. Cook volunteered that the company was in “very, very active discussions” about what to do about its growing stockpile, similar to remarks made earlier this month.

That wasn’t enough to satisfy some shareholders. New York State Comptroller Thomas DiNapoli, who oversees the New York State Common Retirement Fund, said “we were disappointed” that Apple didn’t offer a plan to deliver cash to shareholders. The fund owns about $1.3 billion worth of Apple stock.

At the annual meeting, Mark Zuercher, a retired transportation executive from Orinda, Calif., said he was “disappointed” and expected Mr. Cook might say more. “It was more of the same,” Mr. Zuercher said. He plans to hold onto his shares for now, declining to comment on the size of his stake.

Bloomberg also led with investors taking Cook to task for his use of company cash piles:

Apple shares slipped after Cook ended the company’s annual shareholder meeting without giving any additional insight on what he’ll do with $137.1 billion in cash and investments. Shareholders re-elected the board, approved Ernst & Young LLP as accountant and passed a non-binding measure on executive pay.

Cook is under growing pressure to use higher dividends, stock buybacks or a new class of preferred shares to compensate investors after Apple’s stock tumbled by more than a third from a September peak. The calls grew louder amid signs of slowing sales and profit growth and increasingly acute competition fromSamsung Electronics Co. (005930) and Google Inc. (GOOG)

Groupon also had a tough day in the stock market after disappointing outlook. Here’s the Reuters story:

Groupon Inc lost almost a quarter of its market value on Wednesday after the company began to take a smaller cut of revenue on daily deals, sacrificing revenue and profits to attract and keep merchants.

“This raises questions about how these guys are going to be able to scale the business,” said Tom White, an analyst at Macquarie. “The forecast is underwhelming.”

Groupon shares fell 22 percent to $4.65 in after hours trading on Wednesday.

The Chicago-based company started sharing more money from its deals with merchants early in the fourth quarter to persuade them to run an offer for the first time or work on another offer.

That dented revenue and profit in the fourth quarter, Chief Financial Officer Jason Child said in an interview.

“We are focused on driving growth,” he said. “We will make the investments we feel we need to optimize for growth and merchant profitability.”

Looks like investors in both of these companies will have to wait a little longer to see returns.