Apple to Einhorn: We Were Just Getting To That…
Apple (NASDAQ:AAPL) released a statement on Thursday afternoon, saying the company’s management and board were currently in active talks about returning cash to its shareholders. The iPhone maker specifically mentioned Greenlight Capital, the David Einhorn fund that filed a lawsuit against the company over its stock behavior earlier in the day.
Einhorn said Apple had a “cash problem” it needed to fix by giving stockholders a bigger share of its funds. Through the lawsuit, the Apple investor is trying to stop the company from implementing a proposal that would take the option of issuing preferred stock off its charter. Instead, he wants Apple to give away perpetual preferred stock with a 4 percent yield.
Apple said in the statement that it would thoroughly evaluate Greenlight’s recommendation to issue some form of preferred stock. It also explained that the proposal in its AGM proxy was designed not to get rid of preferred stock completely, but give shareholders the option to vote on such a move.
“Contrary to Greenlight’s statements, adoption of Proposal #2 would not prevent the issuance of preferred stock,” the statement read. “Currently, Apple’s articles of incorporation provide for the issuance of ‘blank check’ preferred stock by the Board of Directors without shareholder approval. If Proposal #2 is adopted, our shareholders would have the right to approve the issuance of preferred stock. As such, Proposal #2 has the support of many of our shareholders.”
The company stressed that it announced a dividend last year after reaching a cash position that went beyond business and strategic needs, and that it would have executed $10 billion of the total $45 billion plan next week. It also said that it generated an additional $23 billion in cash flow from operations in the last quarter alone.