Ahead of Apple Inc. (AAPL)’s Annual Shareholder Meeting, Einhorn Claims a Victory

Page 1 of 2

David Einhorn GREENLIGHT CAPITALEarlier this month, Greenlight Capital’s David Einhorn ruffled some feathers when he made headlines by suggesting Apple Inc. (NASDAQ:AAPL) issue a new class of perpetual preferred shares that boast a 4% yield. As part of his overture, the hedge fund star sued the Mac maker over a proposal listed in its shareholder proxy that’s coming up for a vote at Apple’s annual shareholder meeting, which is scheduled for Feb. 27 — next Wednesday.

Appealing to those you want to overrule
At issue is that Apple Inc. (NASDAQ:AAPL) is bundling three separate issues into its Proposal 2, all of which the company maintains are beneficial to shareholders and corporate-governance advocates. One of these amendments would eliminate Apple’s ability to issue preferred stock solely at the board’s discretion. Even if Proposal 2 were passed, Apple Inc. (NASDAQ:AAPL) would still be able to issue the type of preferred stock that Einhorn is asking for, except it would need shareholder approval to do so.

That would make it seem that Einhorn is looking to bypass other fellow shareholders and have the board grant his request directly. This is why it was such an interesting move that Einhorn hosted a conference-call webcast on Thursday to appeal to said fellow shareholders (the same ones he wants to effectively overrule), which he’s now referring to as “iPrefs.”

Tim Cook specifically called the whole ordeal a “silly sideshow” that was a needless distraction and a waste of time and shareholder money.

Einhorn shoots, Einhorn scores
After Einhorn filed suit, the case had been fast-tracked since the annual meeting was just weeks away. On Friday, Reuters reported that U.S. District Judge Richard Sullivan has indeed decided to grant Einhorn a preliminary injunction that prevents Apple Inc. (NASDAQ:AAPL) from proceeding with its shareholder vote on Proposal 2. The news isn’t too surprising, since earlier in the week Sullivan had said, “Candidly, I do think the likelihood of success is in favor for Greenlight on the merits.”

Of course, all of this fuss simply relates to Apple’s bundling of these proposals into one vote, and the ultimate outcome of this suit has no direct bearing on what Apple investors actually care about — returning more cash to shareholders. Even if Einhorn totally gets his way and these matters are unbundled and voted on separately, the ultimate decision of whether Apple Inc. (NASDAQ:AAPL) gives more back still lies entirely with Apple’s board and management.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!