Greenlight makes case to stop Apple preferred-stock vote

“Greenlight Capital Inc. will try to persuade a federal judge to stop Apple Inc. from adopting measures it says limit the iPhone-maker’s ability to offer preferred stock,” Christie Smythe reports for Bloomberg.

“Greenlight, the hedge fund whose founder, David Einhorn, has been urging Apple to share its cash with investors by issuing high-yielding preferred shares, alleged in a lawsuit that the company unfairly lumped a stock restriction with two other corporate governance matters set for a vote by investors on Feb. 27,” Smythe reports. “At a hearing scheduled for today in Manhattan, lawyers for the hedge fund are expected to ask U.S. District Judge Richard Sullivan to block the vote unless Apple allows the provisions to be considered separately.”

Smythe reports, “Einhorn, whose Greenlight claims to hold more than 1.3 million Apple shares, has been asking the Cupertino, California- based iPad maker to issue preferred stock to help shift the value of a $137 billion stockpile of cash to investors. Apple Chief Executive Officer Tim Cook has said the company is considering ways to give more money to shareholders and described Greenlight’s suit as a “silly sideshow” during a Feb. 12 investor conference in San Francisco.”

Read more in the full article here.

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Judge approves Apple request to expedite Einhorn’s Greenlight Capital case – February 11, 2013
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The colossal gall of bad Apple investors – February 8, 2013
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Apple with $137 billion in cash considers preferred stock – February 8, 2013
Einhorn’s Apple lawsuit marks biggest investor challenge in years – February 8, 2013
Gamco’s Haverty: Apple’s cash is ‘shareholders’ cash’ (with video) – February 8, 2013
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Greenlight’s Einhorn sues Apple over plan to eliminate preferred stock, wants more cash distributed – February 7, 2013
Greenlight Capital urges Apple shareholders to vote ‘No’ on proposal 2 that would impede Apple’s ability to unlock shareholder value – February 7, 2013
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Greenlight’s Einhorn: Apple ‘the best big growth company’; Fed stimulus ‘counterproductive’ – July 10, 2012
David Einhorn says Apple isn’t a below-average company, it’s just priced like one – May 30, 2012


  1. Side show Bobhorn!
    I wonder if the judge will see the greedy bastard for what he really is? How will a decision for Sideshow Bobhorn affect all the other American AMEX,NYS, & NASDAQ,OTC,TSE & VSE markets? One can only hope that the judge has enough marbles to comprehend what a decision for the clown will envisage for American industry.

  2. As an Apple shareholder , I am very very very unhappy about AAPL performance compared to Google which hit a new high above $800 while Apple dropping . Tim cook must do sth !! At least share with money with shareholders .

    1. This type of volatility with aapl is common. Just look at the stock history since 2000.
      2008 is a great example. At the beginning of the year it reached an all time high of 200. Then it tanked, bounced up again and then down to 84 at the end of the year. That’s a 60% drop in value.
      I bought in at an average of 70 just before the rise to 200. I could have bailed at 200 and anytime on the way down. But I stayed in and still have a 500% gain over 6 years.
      The brokers and managers want to get their hands on Apple’s cash because they would love to see that equity go into the market. It is all about greed – these guys are very good at concocting situations so that they make money. The lawsuit is just a ploy to try to maneuver Apple to do what they want.

  3. This is a sideshow. Apple needs to focus on improving its business execution and performance. It needs to grow its business at least in line with its stated goals. It needs to produce products on a schedule that meets the market demand. It needs to stabilize profitability. It needs to continue to innovate. If it does these things the stock will take care of itself as it did prior to any dividends being paid.

  4. So what is really going on here? Apple have made it clear that the proposed change will still allow preferred stock to be issued, but will require shareholder approval. Currently no shareholder approval is required. On the face of it this will be to the benefit of shareholders. Perhaps Apple consider that, currently, a bunch of large shareholders could conspire to force Apple to issue preferred stock to them, without a shareholder vote and are moving to prevent this.

    As for those who are agitating for a return of cash to shareholders, such a move would provide a short term benefit to those shareholders with a short term interest in the stock (ie: speculators) at the expense of Apple’s long-term interests and those loyal shareholders with a long term view.

    And then there is the array of “arm-chair experts” who have never run a business and never seen the likes of Apple’s phenomenal success, but demand that Apple make this product, or that product, or address this market or chase market share…

    Apple plays with a long bow. Which means they are focused on the long term and pursue a strategy which has delivered astonishing success. They are NOT focused on the share price and should not be – the hedge funds play havoc with the share price and it fluctuates wildly – but only in the short term.

    If you own Apple shares, sit back and leave it to Apple management to deliver long term growth, and enjoy your dividends in the meantime. There has never been anything like Apple, and there probably never will be again.

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