“It’s not about whether they return cash to shareholders and not about how much”
Apple’s chief executive has issued a vocal response to Greenlight Capital regarding their lawsuit over preferred stock in the company’s proxy, stating the situation they’re in was “a silly side show.”During a CNBC interview, Greenlight Capital founder David Einhorn called Apple a “phenomenal company filled with talented people creating iconic products that consumers around the world love.”
Einhorn said he sued the Mac maker (on behalf of his own company) because Apple had what he believed to be a “cash problem.”
He specifically likened the company’s mentality to his grandma’s, saying Apple behaved like “someone who’s gone through traumas…they sometimes feel they can never have enough cash.”
At the Goldman Sachs investor conference yesterday, Tim Cook said the following, in response to Einhorn’s allegations.
“So, it doesn’t mean Apple won’t release preferred share. It means we need to go to common shareholders to get their approval,” he explained. “Frankly, I found it bizarre that we are being sued on that is something good for shareholders, but this is the position we’re in. It’s a silly side show.”
Cook further noted that Apple doesn’t have a depression-era mindset, suggesting that Greenlight’s suit was nothing but a way to distort reality.
Apple also issued a formal (public) response to Greenlight on February 7, saying, “contrary to Greenlight’s statements, adoption of Proposal #2 would not prevent the issuance of preferred stock.”
Cook insisted that, although his company accepts Greenlight’s proposals, Apple will continue to stick to Proposal #2 in its proxy.
“It’s about the right of shareholders,” he said. “It’s not about whether they return cash to shareholders and not about how much, or the mechanism to return it, it’s about the right.”
“We feel so strongly that, for Apple, shareholders should approve any issue of preferred stock.”