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Facing lawsuit, Apple responds to preferred stock proposal
Apple has taken the unusual step of issuing a press release in response to a lawsuit filed today by Greenlight Capital’s David Einhorn, who has pressured the company to create preferred stock that will distribute additional cash to shareholders. Indirectly addressing the lawsuit and a related open letter Einhorn published to fellow Apple investors, Apple began by citing the company’s existing plan to return $45 billion to shareholders over the next three years, while noting that “as of next week we will have executed $10 billion of that plan.”
Einhorn has claimed that adoption of an Apple proxy proposal would prevent the company from issuing preferred stock, but Apple disputes that, suggesting that the proposal would actually enable shareholders to approve issuance of preferred stock. “We remain committed to having an ongoing dialogue with our shareholders to get perspectives around return of capital and driving shareholder value,” Apple said, noting that the company has found itself “in the fortunate position of continuing to generate large amounts of cash, including $23 billion in cash flow from operations in the last quarter alone.”
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