Einhorn’s Greenlight Capital: Every Apple shareholder should get preferred shares ‘for free’

“Greenlight Capital is chatting to Apple investors today in a conference call aimed at gathering support for its campaign — and lawsuit — to stop Apple’s attempt to kill preferred stock,” John Koetsier reports for VentureBeat. “And to tell investors why each Apple shareholder should get perpetual preferred stock, for free.”

“One thing that’s unclear to me: the Greenlight lawsuit and shareholder campaign is, ostensibly, about ‘unlocking significant value for all shareholders.’ Einhorn obviously wants an acceleration of Apple’s dividend program, which is already committed to returning $45 billion to shareholders’ pockets over the next few years,” Koetsier reports. “That sounds good, but it’s hard to know how you can give everyone preferred shares. After all, if everyone’s special, no-one’s special. Right?”

Read more in the full article here.

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17 Comments

  1. Why does everyone get on the band wagon and keep saying that Apple is attempting to kill preferred stock? Apple is trying to make it so that preferred stock can not be issued without common stockholder approval.

    1. It effectively makes the matter so procedurally complicated, it effectively impedes it for a year or so. While we’re at it, why don’t we take a shareholder vote on every Apple issue, including who should get issued stock options, who gets to use the corporate jet, and what the compensation of each executive would be. That would really be “shareholder friendly”. Frankly I trust Al Gore and Arthur Levinson to act in a timely fashion more than the heads of Calpers, Black Rock, and Fidelity et al. Are you envisioning shareholders to be a bunch of agreeable retirees?

    1. That’s ridiculous. If I think/know that a stock is going up in value, why can I make money on that, but NOT make money if I think/know that it is going to go down in value?

      It’s basically THE SAME THING.

  2. Maybe I am too simple minded, but I have said it before and will again, if Einhorn does not like what Apple is doing, he should just sell the stock he owns and move on. If he in fact screws up the good thing Apple has going by his actions, will he be around and have enough balls to say he was wrong? Nope! He is nothing but a grandstander.

  3. yeah, those holding AAPL stocks for more than 2 years, this way
    hedge fund, mutual funds, traders are 90% disqualified. Lol, nice
    to see this happen. Screw you, Wall Street .

    1. If I were to delineate the ground rules, I’d put the cutoff at five years or more, maybe even 10 years or more.

      I don’t agree with the concept of issuing new, preferred stock for a company in Apple’s position. It makes no sense.

      And as said by others, if *everyone* gets *every share* of common stock replace by this preferred stock, then how is it “preferred” stock?

  4. It is important to differentiate between long-term “owners” of Apple shares and, essentially, short-term “renters” of Apple shares. How about distributing preferred shares to those who have held the shares for, say, 5 years? Or 3 years. Or even 1 year. That should shut the hedge funds up. Understand their holding period is, on average, 3 months or so. Then it is off to the next big bang.

  5. Einhorn had one good point in his presentation: whether its his plan or some other, Apple needs to be as creative in managing its “cash inventory” as it is in handling other areas of inventory in the business. Failing to get even enough return on their massive pile of cash to match inflation is not worthy of a world-class company. I do worry about the potential hit to my AAPL leaps under his plan. . .

    1. Stars that burns their own fuel very quickly turn supernova very quickly.
      Star that burn their fuel slowly and consistently last billions of years.
      You just have to look at our own sun to know that, on the other hand, you just need to look at what the banks and investment companies did to bring about the credit crunch that we still haven’t recovered from!
      What Spinelesshorn is asking Apple to do is to gimp themselves so that they are unable to invest in future products or even buy into startups that have reduced the development time of whatever it is Apple inc. is striving to create.

      1. Not too long ago, an MDN reader noted that if Apple’s cash got to 200 to 400 billion, they could generate 10 to 20 billion of income annually, virtually guaranteeing their existence in perpetuity, giving them the flexibility to reinvent themselves into the unpredictable future, to avoid the fate of a Dell, a RIM, or most sadly, a Kodak. Food for thought.

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