updated 12:45 pm EST, Thu February 7, 2013
Claims Apple idea would shortchange shareholders
Investment firm Greenlight Capital has filed suit against Apple over a proxy proposal for its stock, reports AllThingsD. The proposal would eliminate preferred stock from Apple's charter, but in a statement, Greenlight argues that shareholders should vote against it since it wouldn't maximize their profits. "Apple is a phenomenal company filled with talented people creating iconic products that consumers around the world love," claims Greenlight's David Einhorn. "But Apple has a problem, we think. It has a cash problem."
Einhorn notes that while Apple shares have plummeted about 35 percent from a peak price of $705, the company has $137 billion in cash and investments. That money, he suggests, could potentially give shareholders as much as $32 per share in a preferred stock scheme he has formulated.
Apple has typically been reluctant to bend to shareholder demands, whether on issues of human rights or investment return. Until recently the company refused to issue a dividend, despite having tens of billions in cash reserves. That policy was reversed not long after Tim Cook took over as CEO.