Einhorn Demands Apple Preferred Shares, Says Greenlight Now Holds More Apple Than Ever Before
Shares of Apple (NASDAQ: AAPL) were up more than two percent in pre-market action Thursday morning following some action from activist investor David Einhorn of Greenlight Capital.
In a press release from Greenlight, Einhorn urged Apple holders to oppose management's Proposal 2, which would eliminate the company's ability to issue preferred stock.
Einhorn said, "We believe Apple must examine all of its options to unlock the growing value of its balance sheet for all shareholders. 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."
Shortly after the release, Einhorn spoke on CNBC. The hedge-fund manager admitted Apple "has a cash problem" and said he feels the Board likes to rest on the massive cash position for "strategic flexibility" and "in case bad things happen." Einhorn believes the issuance of preferred shares would be more opportunistic than a buyback.
Einhorn said Greenlight Capital now holds "more Apple than ever before."
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