How David Einhorn turned from Apple advocate to agitator
the company to unlock several hundred billion dollars of shareholder value by distributing preferred stock, which he favored over a share buyback because it did not deplete cash immediately.
In private conversations with Oppenheimer, Einhorn said Apple could initially distribute $50 billion of perpetual preferred stock with a 4 percent annual cash dividend paid quarterly at preferential tax rates.
But, according to Einhorn, Oppenheimer and his advisers calculated the dividend to be 8 percent, which they deemed too high.
"We said, that's crazy. That's crazy. We think 4 percent. If we're wrong, maybe it's 4.5 percent or 4-1/4 percent - it is not 8 percent. So, we kind of agreed to disagree. We kind of sat on it for a few months," Einhorn said.
When he eventually took the matter to Cook, Einhorn said he felt that the CEO did not know all the details of Einhorn's discussions with Oppenheimer.
"When I discussed this with Tim Cook, and actually, the conversation has been going on for the last couple of weeks, he said that he wasn't familiar with my previous conversations with Peter Oppenheimer and whoever Peter Oppenheimer's advisers were. I was surprised by that.
"I think we got the brush-off the first time," Einhorn said about Oppenheimer and his advisers. "I don't know what the communication was" between Oppenheimer and Cook.
Apple declined to comment on the specifics of the discussions with Einhorn.
A source familiar with the matter characterized the interaction with the hedge fund manager as "cordial," saying that there had been "friendly disagreement" only
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