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

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!