David Einhorn cash case against Apple Inc rests on unusual legal tactic
shareholders, that view may not be universally held: other investors may prefer to see the cash (or at least a large portion of it) deployed for investments and acquisitions," it said in its Friday statement.
HOW WILL APPLE RESPOND?
It is unclear how Apple will respond in its formal reply to the lawsuits. On Thursday, Apple said Einhorn's lawsuit was misguided and that adoption of Proposal No. 2 would not preclude preferred share issuances in future.
"Currently, Apple's articles of incorporation provide for the issuance of 'blank check' preferred stock by the Board of Directors without shareholder approval," Apple said. "If Proposal #2 is adopted, our shareholders would have the right to approve the issuance of preferred stock."
Einhorn, a well-known short-seller and Apple gadget fan, said in an interview with CNBC the company harbored a "Depression-era" mentality that led it to hoard cash and invest only in the safest, lowest-yielding securities.
Apple nearly went broke in the 1990s before Steve Jobs returned and engineered a sensational turnaround, with products such as the iPhone and iPad that became must-haves for consumers around the world. The company's near-death experience has led Apple to be exceptionally conservative with its cash.
Greenlight in its complaint said it supports two of the proposals, but not getting rid of preferred stock. Einhorn deems preferred stock superior to dividends or share buybacks and has separately put forward a proposal for an issuance of Apple preferred stock with a perpetual 4 percent dividend.
But as Apple's proxy proposal is structured, Greenlight said, shareholders have
