Einhorn Obtains Court Ruling to Block Controversial Apple Shareholder Vote

In an unexpected turn of events, a US judge has granted Greenlight Capital owner David Einhorn a victory in court against Apple on Friday, Reuters reports.

Although Tim Cook called Einhorn’s lawsuit a “silly sideshow”, the judge thought it was something different: It granted a motion by Einhorn’s fund for a preliminary injunction stopping the shareholder vote on a controversial proposal to limit Apple’s ability to issue preferred stock.

The shareholder vote was scheduled for Wednesday, 27 February as part of the company’s annual stockholder’s meeting.

Einhorn owns about 1.3 million Apple shares, and it was counted as the Apple advocate in Wall Street. However, he has been imploring Apple CFO Peter Oppenheimer for months to have the company issue dividend-paying preferred shares to reward investors and juice the stock price.

He was disappointed to see, though, after receiving Apple’s 7 January annual proxy statement, that Apple’s proposal would make it difficult for the company to issue preferred stock. In reply he sued Apple, claiming the company’s proposal would restrict the board’s ability to unlock the value on Apple’s balance sheet.

Apple replied in a statement, saying it will evaluate Einhorn’s proposal, but they eventually ended up in court. And today the judge favored Einhorn.

Technology enthusiast, rocker, biker and writer of iPhoneinCanada.ca. Follow me on Twitter or contact me via email: istvan@iphoneincanada.ca

  • SimOllik

    On one side there is the people who run the TECH company and on the other the people INVESTING in the company. the INVESTERS just want more MONEY because their in it for the MONEY. People who run the company want to see the COMPANY innovate and prosper.

    That’s the issue with publicising a company. there way to many conflicting interest. I know it adds money benefits but I don’t think its worth it.

    People are too money hungry now a days. not to day apple isn’t but come on, their leaders at what they do. I HATE “INVESTORS” who think their 2cents are the reason for the companies success.
    PEOPLE NEED TO DO SOMETHING TO ADVANCE OR SPECIES, and earning paper from paper isn’t it.
    just my 2 cents, I have no intention of offending any viewer.

  • gtasscarlo

    Apple isn’t innocent in this, either is Einhorn. Apple is sitting on 100+billion. The shareholders have a right to demand a higher dividend payout. If apple doesn’t want to be controlled by shareholders they can buyout every single stock. Which would never happen.

  • SimOllik

    I do agree with the dividends. but I think apple can slowly set in motion a plan to buy back stock. maybe price fixing under under under the radar