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On Friday, Greenlight Capital owner David Einhorn responded to Apple’s filing made on Wednesday, and reiterated his stand that the court should block Apple Inc.’s “Proposal 2” that plans to remove the company’s powers of issuing preferred shares, following Einhorn’s demands that the said powers be used for issuing preferred shares to all current shareholders of Apple.
In his court filings, Einhorn said, “Apple should not be allowed to substitute its judgment for its shareholders’ judgment, and should be enjoined” from allowing the shareholder vote to be staged.
Last week, Greenlight had sued Apple in its effort to compel the company to share more of its $137 billion cash hoard with current shareholders. Greenlight wants Apple to issue perpetual preferred stock with a 4 percent dividend to current shareholders.
Apple wants to get rid the company of the power before such a calamity befalls the company. Until now, Apple was not concerned with the company having the power of issuing preferred stocks at its sole discretion and without shareholder approval.
However, now the company seeks to have the power removed citing reports by ISS and Glass Lewis, that getting rid of the power from company constitution can help defend the company from any ostensible takeover bid.
But, Einhorn argued that “In my view, Apple is not a realistic take-over candidate because of, among other things, its enormous market capitalization.”
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Another Apple investor, Brian Gralnick has also sued to block both Proposal No.2 and another advisory “say-on-pay” vote on the compensation of executives. Brian maintains that Apple has failed to disclose sufficient details about the manner and reasons by which it awarded restricted stock units to specific executives.
