Apple Sued, Greenlight Capital Opposes Proposed Stock Changes

Apple is being sued by Greenlight Capital. The investment firm is opposing Apple over a proxy proposal for its stock.

Under Apple’s proposal, preferred stock would be eliminated from Apple’s charter. Greenlight Capital claims that such a move wouldn’t maximize their profits. The company is suing Apple in order to gain the right to vote with other shareholders regarding the proxy change.

Greenlight’s David Einhorn tells AllThingsD:

“Apple is a phenomenal company filled with talented people creating iconic products that consumers around the world love. But Apple has a problem, we think. It has a cash problem.”

While Apple stocks have fallen by 35 percent from their peak of $705, the company still has $137 billion in cash and investments. Einhorn argues that under his company’s proposal shareholders would receive a fair premium upwards of $32 per share.

In the past, Apple has most often refused the requests of shareholders, choosing instead to push forward with plans created by its Board of Directors. Apple has pushed back against everything from investment strategies to human rights issues.

Apple is known to have been stingy with its stock practices in the past. In fact it wasn’t until Tim Cook took over as CEO that the company issued a stock dividend.

Even with nearly $150 billion in the bank, it appears on the surface that Apple is attempting to maximize its own returns while minimizing payments to its investors.

Do you think Apple should be forced by a court to allow for shareholder voting in regards to its major financing decisions?