Fund Manager David Einhorn Sues Apple Over What He Calls The Company’s ‘Cash Problem’
Feb 7 (Reuters) – Fund manager David Einhorn’s Greenlight Capital sued Apple Inc, saying the company needs to do more to unlock value for shareholders.
Einhorn, a well-known short seller, is long Apple shares and said in a television interview on Thursday that while he admires the company, it has a “cash problem” that it needs to fix.
Greenlight filed suit in federal court in New York to force Apple to modify a proposal in its proxy, which Greenlight believes does not conform to regulatory rules.
Greenlight said it is opposed to the proposal, No. 2 on Apple’s proxy, which the firm said would remove Apple’s ability to issue preferred stock from its charter.
In a filing with the U.S. Securities and Exchange Commission, Greenlight said it was “dissatisfied with Apple’s capital allocation strategy.”
Apple could not be immediately reached for comment.
In a CNBC interview, Einhorn said shareholders would be happy to received preferred stock with a 4 percent yield.
“We understand that many of our fellow shareholders share our frustration with Apple’s capital allocation policies. Apple has $145 per share of cash on its balance sheet. As a shareholder, this is your money,” Greenlight said in an open letter to other investors.