Greenlight: Here’s Why Apple’s Plans Will Harm Investors
In its official court response in their ongoing lawsuit, Greenlight Capital has said Apple’s (NASDAQ:AAPL) move to limit preferred stock options would cause “actual and imminent injury” to the company’s investors.
The hedge fund led by David Einhorn also repeated its assertion that Apple was violating U.S. Securities and Exchange Commission laws by combining a measure to limit preferred shares with two other proposals in its annual shareholders’ meeting proxy. Greelight asked that the February 27 vote be stopped unless the measures were allowed to be considered separately.
Investors in the company “will have been irrevocably stripped of their right to fair corporate suffrage — the very right the unbundling rules were designed to vindicate,” Greenlight said in the filing made with the U.S. District Court in Manhattan on Friday, according to Bloomberg. “These harms all can be prevented by an injunction before the vote, and none can be remedied after,” the filing added.
On Wednesday, Apple had said it wasn’t violating the SEC rule because the three proposals were related to each other. It also said that the preferred stock proposal was designed not to eliminate the option, but to let shareholders have the right to vote on each such issuance…
Einhorn said earlier that his lawsuit was part of a bigger attempt to get Apple to start paying back more to its investors. He suggested the iPhone maker start issuing perpetual preferred stock with a 4 percent yield. Apple chief executive Tim Cook said during a tech conference earlier this week that while the company would consider Einhorn’s suggestion, the measures up for voting were for investors’ benefit.
Apple also released a statement last week that its management and board were in active discussions regarding dividend and stock buybacks.
Greenlight holds more than 1.3 million Apple shares after increasing its holdings in the last quarter of last year even as the company’s share price continued its fall from mid-September highs.