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Greenlight wins injunction on Apple preferred stock vote [U]

updated 04:40 pm EST, Fri February 22, 2013

Measure must now be excluded from shareholder meeting

[Update: Apple pulls measure, issues statement] US District Judge Richard Sullivan has ruled in favor of Greenlight Capital, and issued an injunction against an Apple shareholder vote on issuing preferred stock, Reuters reports. The proposal was to have been brought up at Apple's annual shareholder meeting on February 27. Greenlight is pursuing a lawsuit against Apple in the belief that if passed, the measure would prevent a preferred stock plan it wants from being considered.

Apple CEO Tim Cook has called the case a "silly sideshow," and argued that the measure would benefit shareholders since it requires their vote on issuing preferred stock. The head of Greenlight, David Einhorn, has claimed that the proposal violates SEC rules about bundling multiple proposals together; Apple insists that the SEC has already reviewed the matter.

At stake is Apple's $137 billion in cash reserves, which people like Einhorn have argued should be used in part to reward investors. The company has already begun limited dividend and stock buyback programs, and suggested that it might consider going further, but in the past has claimed the need to keep money in reserve for corporate acquisitions, economic slumps, and other potential costs. Paying for Einhorn's scheme would require Apple to repatriate some of its overseas cash, taking a hit in US taxes.

[Update] In reaction to the court decision, Apple has opted to pull the contested proposal, known as Proposal #2, from the ballot to be presented to shareholders at the annual meeting. As a result, the option to issue or not issue so-called "preferred stock" continues to rest solely with the discretion of Apple's board per the company's original charter.

Apple issued a statement on the matter, saying it was "disappointed" with the court's ruling. "Proposal #2 is part of our efforts to further enhance corporate governance and serve our shareholders' best interests," the company said. "Unfortunately, due to today's decision, shareholders will not be able to vote on Proposal #2 at our annual meeting next week."


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By Electronista Staff
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  1. apostle

    Junior Member

    Joined: 04-16-08

    So....

    I guess what Einhorn is saying is that it would be easier for him to bribe, err, "lobby", the Board of Directors individually than it would be to "lobby" the Board of Directors AND all of the shareholders. Assuming his ultimate intent is preventing the shareholders from having a say (as regards preferred stock). Didn't one Judge say Apple could simply unbundle the proposal and vote on each item separately? If it does go through I'd imagine Oinkhorn, given his character, suing the shareholders for not being as smart as he is and causing him economic harm.

  1. global.philosopher

    Fresh-Faced Recruit

    Joined: 09-17-10

    Einhorn is a greedy fool

    Apple followers know how easy it is for a US company to topple and fail. Apple was two quarters away from oblivion 15 years ago and of course it is now conservative with its money. The hard times will hit Apple again....as long as the company exists there will be ups and downs. The longer it exists the more it will face. It is no different to cyclical events in nature. By holding onto its money it ensures it will continue to survive during the down periods and allow this US company to continue to innovate and employ people. Of course, Einhorn is not so long sighted. He thinks that a company survives best by living on the edge and scraping through with bare bones reserves each quarter. People like this are dangerous and greedy. It is because of greedy people like this nob that the US economy is in such dire straights at the moment....living on the edge and just hoping the next pay check comes in. What a terd!!!!

  1. apostle

    Junior Member

    Joined: 04-16-08

    Agreed!

    Einhorn is a major turd. A worthless human being. Time he went home and put us all out of his misery.

  1. KTheory

    Fresh-Faced Recruit

    Joined: 01-08-07

    Wow

    So he sued Apple just so Apple could end up ignoring him anyway?

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