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Hedge Fund Titan Einhorn Wants To Lead A Revolt Against Apple

Forbes – Greenlight Capital’s David Einhorn is urging Apple shareholders to vote down a change to the company’s charter that would allow it to stop issuing preferred stock.

Investors would be able to repel the proposal at Apple’s shareholder meeting at the end of February. Einhorn, who has invested in Apple since 2010, when shares fetched half today’s price, has criticized Apple’s capital allocation. The company retains a huge cash warchest and only recently began paying a dividend. “Apple has a cash problem. It acts like it’s in a depression,” Einhorn said on CNBC this morning. He likened the $430 billion company’s mentality to the stinginess of his grandmother, a woman born in the Great Depression who acted so frugal that she would avoid leaving Einhorn a voicemail so she wouldn’t pay for the call.

“We believe Apple must examine all of its options to unlock the growing value of its balance sheet for all shareholders,” Einhorn said earlier. “Over the past several months, we have had an ongoing dialogue with Apple regarding one option to do so, namely the creation of a new security, a perpetual preferred stock that would be distributed at no cost to Apple’s existing shareholders, and would provide an attractive, sustainable dividend while preserving Apple’s financial resources to pursue its business strategy.”

Shares of Apple in pre-market trading added 0.6%.

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