How David Einhorn turned from Apple advocate to agitator
Hedge fund star manager David Einhorn was arguably Apple Inc's biggest cheerleader on Wall Street with a stake worth about $600 million and an oft-cited prediction that the company's market value would hit $1 trillion some day.
So it was a shock on Thursday when Einhorn announced that he was suing Apple to get it to deploy its $137.1 billion cash pile more effectively and arrest a 35 percent drop in its share price from a record high logged last September.
Unknown to Wall Street, Einhorn had for months been imploring Apple's chief financial officer, Peter Oppenheimer, to have the company issue dividend-paying preferred shares to reward investors and juice the stock price.
Einhorn told Reuters he felt blindsided when he received Apple's Jan. 7 annual proxy statement and saw that it contained a proposal that would make it more difficult for the company to issue preferred stock.
"We saw that the proxy came out and we saw they were planning to get rid of preferred and then we said, 'Wait a minute, we are not going to be able to bring this up again in a good way if we allow them to do this. So we should contest it now,'" Einhorn said in a phone interview.
Einhorn's $8 billion Greenlight Capital Inc on Thursday sued Apple in US District Court in New York, asserting that its Proxy Proposal 2 would "restrict the board's ability to unlock the value on Apple's balance sheet."
The 44-year-old hedge fund manager, who made his name and fortune by
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