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. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

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!